Financial Markets Today

Financial Markets Today

All of us at AIICO Capital wish you all the Happiness in the New Year.

Equities indices appreciated today, after a very quiet uncertain opening, as the U.S. Federal Reserve bank agreed to hold its benchmark interest rate at 2.25% – 2.50% and indicating a more accommodative monetary stance. The U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ and FTSE all rose ca +1.70%, +1.54%, +1.99% and +1.58% respectively. This comes as the U.S. and China commenced its trade negotiations meeting today, with declining optimism of reaching a positive conclusion. We expect this to spur more positive momentum in the global equities markets this week. However, we expect continued volatility in global financial markets in Q1 2019, with investors interest expected to remain focused in safe-haven investments of developed economies.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system was expected to open positive today. There was no Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
Another quiet trading day in the treasury bills secondary market. Average rate lost ca -2ps day-on-day, with the 07 February 2019 maturity trading the most to close at 12.97%. Pease find below a summary of the results of today’s Primary Market (PMA) auction:

Tenor 91-Days 182-Days 364-Days
Maturity Date: 02-May-19 01-Aug-19 30-Jan-20
Amount Offered: ₦ 7.851billion ₦ 69.565billion ₦ 177.219billion
Subscription: ₦ 41.045billion ₦ 58.684billion ₦214.384billion
Amount Allotted: ₦ 21.018billion ₦ 12.25billion ₦ 167.932billion
Range of bids: 10.8500% – 12.0000% 12.8500% – 14.5000% 14.3000% – 18.0000%
Stop Rates 11.0000% 13.5000% 15.0000%


Bank Placements

Open Buy Back (OBB) and Overnight (O/N) rates dropped to 3.83% and 4.50% from 10.17% and 10.83%. Average fixed deposit rates amongst banks monitored showed:
– tier-1 rated banks at 3.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.
– tier-2 rated banks at 7.00% for 30 – 60 days tenor on ₦10mln – ₦100mln

Bonds
A very quiet trading day in the bonds secondary market today, with very few activities across the curve and with investors focus majorly on the bonds primary auction. Average yields declined ca -7bps day-on-day, with the March 2036 maturity trading the most to close at 15.12% from 15.19%. Pease find below a summary of the results of today’s bonds Primary Market (PMA) auction:

S/N AUCTION DATE MATURITY DATE AMOUNT OFFERED(NGN) AMOUNT ALLOTED (NGN) MARGINAL RATE
1 30-Jan-19 27-Apr-23 ₦50.00billion ₦5.85 billion 15.2000%
2 30-Jan-19 21-Mar-25 ₦50.00billion ₦20.09 billion 15.2500%
3 30-Jan-19 28-Feb-28 ₦50.00billion ₦91.04 billion 15.3500%

Equities
The Nigerian equities market declined for a 3rd consecutive trading day, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost ca -0.11% day-on-day to close at 31,145.34pts, with market’s year-to-date returns at -0.91%. This was majorly due to price depreciation in Nestle Nigeria Plc (-0.69%) and Guinness Nigeria Plc (-8.45%).

The NSE Banking, Oil & Gas and Industrial indices gained ca +10bps, +140bps and +23bps day-on-day, while the NSE Consumer Goods index declined -76bps. Zenith Bank Plc led both the volume and value charts with 56.3m units traded at ₦1.30bn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.75/$1. In the parallel market, it remained stable against the Dollar and Euro at ₦363/$1 and ₦411/€1 respectively, and appreciated against the Pound Sterling at ₦469/₤1 from ₦470/₤1. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.68/$1 from ₦362.42/$1.

Crude oil prices rose further today, on continued concerns of the impact of U.S. imposed sanctions on Venezuela, and as U.S. crude oil inventories rose 919,000 barrels weekon-week vs analyst expectation of 3.2 million barrels. Brent crude oil price rose ca +1.66% at $62.34pb, while WTI crude also gained ca +2.66% at $54.73pb, as at report time. Spot gold was up ca +0.08% day-on-day at $1,316.20 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
CORNERST 0.22 0.02 +10.00%
MBENEFIT 0.22 0.02 +10.00%
ABCTRANS 0.34 0.02 +9.68%
LINKASSURE 0.61 0.05 +8.93%
BETAGLAS 60.00 4.35 +7.82%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
AIRSERVICE 6.45 -0.70 -9.79%
LASACO 0.29 -0.03 -9.38%
MCNICHOLS 0.30 -0.03 -9.09%
WEMABANK 0.62 -0.06 -8.82%
MEYER 0.54 -0.05 -8.47%
Benchmark T-Bills Discount Rates
30-Jan-19 29-Jan-19 Change in Rates
64Days 12.62% 13.93% -0.31%
169Days 13.23% 13.23% 0.00%
316Days 14.90% 14.89% 0.01%
Source: FMDQ DQL for 30 January 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
30-Jan-19 29-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 13.55% 13.86% -0.31%
5 yrs: 15.54% 13-Feb 2020 15.41% 15.41% 0.00%
10 yrs: 16.29% 17 Mar 2027 15.18% 15.14% 0.04%
20 yrs: 16.25% 18-Apr 2037 15.09% 15.09% 0.00%
Source: FMDQ DQL for 30 January 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.15% per annum
Added Benefit Personal accident insurance cover
AIICO Capital Guaranteed Income Note (GIN) Rates p.a.
Amount (NGN) 30 Days 60 Days 90 Days 180 Days 364 Days
10,000,001 – 50,000,000 10.00 10.50 11.00 12.00 13.00
50,000,001 – 100,000,000 11.00 11.25 11.50 12.50 14.00
100,000,001 – 400,000,000 12.00 12.25 12.50 13.00 14.50
Trading Treasury Bills Rates p.a.
Maturity Dates Tenor (Days) Discount Rate Effective Yield
28-Feb-19 29 11.40% 11.50%
21-Mar-19 50 10.85% 11.01%
01-Aug-19 183 13.00% 13.91%
07-Nov-19 281 14.35% 16.13%

 

Select Macro-economic Indices
Inflation % (December 2018) 11.44 (-25.57% ytd)
PMI (December 2018) 61.10
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 62.34 (+1.66% d/d)
External Reserve (US$’billion) 43.16 (+0.11% ytd)
GDP % (Q3 2018) +1.81% (Q2 2018: +1.50% y/y)
NSE All Share Index (ASI) 31,145.34 (-0.11% d/d; -0.91% ytd)
Market Capitalisation (₦’Trillion) 11.61
Financial Markets Update – 30 January 2019
Important Disclaimers
This document has been issued and approved by AIICO Capital and is based on information from various sources that we believe are reliable. However, no representation is made that it is accurate or complete. While reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any opinion expressed herein. This document is for information purposes only. It does not constitute any offer or solicitation to any person to enter into any trading transaction.
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