Financial Markets Today

Financial Markets Today

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

Global equities markets rallied today, with most benchmark indices closing in week-on-week gains despite a very volatile week of trading. This comes as the U.S. Treasury Secretary indicated possible progress in on-going U.S./China trade negotiations with a 2nd meeting between both parties early holding next week and comes a day after the European Central Bank (ECB) retained its benchmark refinancing rate at record low levels of 0%. The U.S. Down Jones Industrial Average (DJIA), S & P 500, NASDAQ, German DAX and Chinese SHANGHAI index all gained ca +0.94%, +0.97%, +1.24%, +1.36% and +0.36% respectively. Emerging Markets (EMs) equities also appreciated with the Morgan Stanley Capital International (MSCI) Emerging Market Index gaining ca 1.44% day-on-day.

We expect current positive momentum in global equities market to continue in the short term. However, we expect persisting uncertainties around global economy growth in 2019 with economic slowdown in China in Q4 2018 and rising expectation of further slowdown in Q1 2019 to stir increasing volatility in global financial markets and vulnerabilities in Emerging (EMs) and Frontier (FMs) markets

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today, at ca ₦86.43bn. In line with its tight monetary policy, the Central Bank of Nigeria (CBN) conducted an Open Market Operation (OMO) auction today.

Treasury Bills
A relatively quiet trading day in the treasury bills secondary market today, with only a few transactions seen at the short-to-mid end of the curve. Average rate dropped ca -4ps day-on-day, with the 07 February and 21 March 2019 maturities trading the most to close at 12.72% and 11.13% respectively. Pease find below a summary of the results of today’s OMO auction:

Tenor 90-Days 195-Days 342-Days
Maturity Date: 25-Apr-19 08-Aug-19 02-Jan-20
Amount Offered: ₦ 20.00billion ₦ 30.00billion ₦ 100.00billion
Subscription: ₦ 1.11billion ₦ 20.16billion ₦ 50.27billion
Amount Allotted: ₦ 1.11billion ₦ 20.16billion ₦ 50.27billion
Range of bids: 11.9000% – 11.9000% 13.5000% – 15.0000% 15.0000% – 15.0000%
Stop Rates 11.9000% 13.5000% 15.0000%


Bank Placements

Open Buy Back (OBB) rate dropped to 12.08% from 12.33% while Overnight (O/N) rate remained flat at ca 13.00%. 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 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln

Bonds
An active and bullish trading day in the bonds secondary market today, with interest seen particularly on long-dated maturities. Average yields dropped ca -3bps day-on-day, with the February 2028 maturity trading the most to close at 15.46% from 15.45%.

Equities
The Nigerian equities market appreciated today, as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.36% day-on-day to close at 30,989.60pts, with market’s year-to-date returns at -1.40%. This was largely due price appreciation in Dangote Cement Plc (+1.04%), Guaranty Trust Bank Plc (+2.68%) and Zenith Banking Plc (+3.84%).

The NSE Oil & Gas, Banking and Industrial indices gained ca +168bps, +410bps and +49bps day-on-day, the NSE Consumer Goods index lost ca -14bps. Diamond Bank Plc led the volume chart with 89.76m units while Zenith Bank Plc led the value chart with trades worth ₦806mn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.80/$1. In the parallel market, it remained stable against the Dollar at ₦364/$1 while depreciating against both the Pound Sterling and Euro at ₦467/₤1 and ₦412/€1 from ₦463₤1 and ₦411/€1, respectively. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.12/$1 from ₦362.29/$1.

Crude oil prices rose further today, as investors continue to expect a shortage of output from Venezuela would help reduce current oversupply in global crude oil. Brent crude oil price rose ca +0.43% at $61.35pb, while WTI crude also rose ca +0.64% at $53.47pb, as at report time. Spot gold was down ca +1.55% day-on-day at $1,299.60 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
TOTAL 214.50 19.50 +10.00%
DIAMONDBNK 2.31 0.21 +10.00%
CAVERTON 2.33 0.21 +9.91%
FCMB 2.15 0.19 +9.69%
WEMABANK 0.70 0.06 +9.37%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CHIPLC 0.35 -0.03 -7.89%
NPFMCRFBK 1.46 -0.12 -7.59%
PZ 11.30 -0.55 -4.64%
UAC-PROP 1.59 -0.06 -3.64%
MANSARD 1.95 -0.05 -2.50%
Benchmark T-Bills Discount Rates
25-Jan-19 24-Jan-19 Change in Rates
69Days 12.99% 12.99% 0.00%
174Days 13.30% 13.41% -0.11%
321Days 14.91% 14.88% 0.03%
Source: FMDQ DQL for 25 January 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
25-Jan-19 24-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 13.97% 13.92% 0.05%
5 yrs: 15.54% 13-Feb 2020 15.52% 15.64% -0.12%
10 yrs: 16.29% 17 Mar 2027 15.14% 15.04% 0.10%
20 yrs: 16.25% 18-Apr 2037 15.17% 15.30% -0.13%
Source: FMDQ DQL for 25 January 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.00% 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
14-Feb-19 21 11.20% 11.27%
21-Mar-19 56 10.35% 10.52%
01-Aug-19 189 12.95% 13.88%
07-Nov-19 287 14.35% 16.18%

 

Select Macro-economic Indices
Inflation % (December 2018) 11.44 (-25.57% ytd)
PMI (December 2018) 61.10
MPR (%) MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 61.35 (+0.43% d/d)
External Reserve (US$’billion) 43.11 (-0.01% ytd)
GDP % (Q3 2018) +1.81% (Q2 2018: +1.50% y/y)
NSE All Share Index (ASI) 31,426.63 (+1.41% d/d; -0.01% ytd)
Market Capitalisation (₦’Trillion) 11.72

Financial Markets Update – 25 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.
Investments discussed in this report may not be suitable for all investors. This report is provided solely for the information of AIICO Capital clients who are then expected to make their own investment decisions. AIICO Capital conducts designated investment business with market counter parties and customers and this document is directed only to such persons. AIICO Capital accepts no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report is for private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of AIICO Capital. Users of this report should bear in mind that investments can fluctuate in price and value. Past performance is not necessarily a guide to future performance.
AIICO Capital is regulated by the Securities and Exchange Commission, and is licensed to provide fund and portfolio management services in Nigeria.