All of us at AIICO Capital wish you all the Happiness in the New Year.
The European Central Bank (ECB) today, ended its first monetary policy meeting in 2019 keeping its benchmark refinancing rate at record low levels of 0%, since March 2016 and reiterated it will maintain key interest rates at record low levels till the end of Q3 2019. This comes after the Eurozone’s Apex bank ended its record high 2.6 trillion Euros (ca $2.94 trillion) quantitative Easing stimulus programme in December 2018, with growth outlook in the Eurozone area expected to significantly subdued in 2019. This also comes a week to the U.S. Federal Reserve’s meeting holding 29 – 30 January 2019.
With the persisting uncertainties and threat of protectionism, vulnerabilities in emerging markets, increasing financial markets volatility, economic slowdown in China and rising expectation of a slowdown in global economic growth, we expect the U.S. Federal Reserve to maintain its benchmark interest rate at 2.25% – 2.50% at the end of its first meeting in 2019 next week.
Liquidity in the banking system opened on a positive note today, at ca ₦70.80bn. This was further increased with inflows from maturing Open Market Operations (OMO) treasury bills of ca ₦381.54bn. In line with its tight monetary policy, the Central Bank of Nigeria (CBN) conducted both an OMO auction and a Special OMO sale today.
Another bullish trading day in the treasury bills secondary market today, with demand seen particularly at the short-to-mid end of the curve. Average rate dropped ca -3ps day-on-day, with the 28 February 2019 maturity trading the most to close at 11.85% from 12.87%. Pease find below a summary of the results of today’s OMO auction:
|Amount Offered:||₦ 30.00 billion||₦ 70.00 billion||₦ 350.00 billion|
|Subscription:||₦ 6.06 billion||₦ 18.38 billion||₦ 335.21 billion|
|Amount Allotted:||₦ 6.06 billion||₦ 18.38 billion||₦ 335.21 billion|
|Range of bids:||11.9000% – 11.9000%||13.5000% – 15.0000%||15.0000% – 15.0000%|
Open Buy Back (OBB) and Overnight (O/N) rates dropped to 12.33% and 13.00% from 15.00% and 15.67% respectively. 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.
A more active trading day in the bonds secondary market today, after yesterday’s release of the Q1 2019 bonds issuance calendar. Average yields rose ca +27bps day-on-day, with the March 2036 maturity trading the most to close at 15.26% from 15.13%.
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 (+1.05%), Guaranty Trust Bank Plc (+1.82%) and Zenith Banking Plc (+0.68%).
The NSE Oil & Gas and Banking indices gained ca +13bps and +65bps day-on-day, the NSE Industrial index lost ca -97bps while the NSE Consumer Goods index remained flat. Zenith Bank Plc led both the volume and value charts with 36.47m units traded at ₦806.51mn.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.80/$1. In the parallel market, it depreciated against the Dollar at ₦364/$1 from ₦363/$1, appreciated against the Pound Sterling at ₦463/₤1 from ₦465₤1, while it remained stable against the Euro at ca ₦411/€1. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.29/$1 from ₦362.19/$1.
Crude oil prices rose today, on indication that the U.S. planned to implement new sanctions on Venezuela, despite reports by the Energy Information Administration (EIA) of a 8 million barrels rise in crude inventory vs analyst expectation of 42,000 barrels. Brent crude oil price rose ca +0.08% at $61.13pb, while WTI crude rose ca +0.97% at $53.13pb, as at report time. Spot gold was down ca -0.40% day-on-day at $1,278.90 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.00% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (December 2018)||11.44 (-25.57% ytd)|
|PMI (December 2018)||61.10|
|MPR (%)||MPR (%) 14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||61.13 (+0.08% 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)||30,989.60 (+0.36% d/d; -1.40% ytd)|
|Market Capitalisation (₦’Trillion)||11.56|