Financial Markets Today

Financial Markets Today

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

The Debt Management Office (DMO) today, released the Q1 2019 bonds issuance calendar, indicating ca 22% quarter-on-quarter rise in total debt offering at ₦440 billion vs ₦360 billion in Q4 2018, and ca 230% higher than ₦133.34 billion sold in Q4 2018. It also shows an increased monthly total offering of ₦165 billion for both January and February respectively, and ₦100 billion for March at the 3-years, 5-years and 10-years maturity brackets, with the April 2023, March 2025 and February 2028 maturities been re-issued, with the January bond’s auction scheduled for 31 January 2019.

With the continued omission of the 20-year maturity in its debt issuance calendar for a 5th consecutive quarter, we expect the government to maintain its preference for long tenored foreign borrowings in 2019 at single digit cost vs long tenored local borrowings at double digits cost.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened on a positive note today, at ca ₦78.77bn. In line with its tight monetary policy, the Central Bank of Nigeria (CBN) conducted an Open Market Operations (OMO) auction today.

Treasury Bills
A bullish trading day in the treasury bills secondary market today, despite the conduct of an Open Market Operation (OMO) auction by the Central Bank (CBN). Average rate dropped ca -25ps day-on-day, with the 04 April 2019 maturity trading the most to close at 12.99% from 14.10%. Pease find below a summary of the results of today’s OMO auction:

Tenor 92-Days 176-Days 330-Days
Maturity Date: 25-Apr-19 18-Aug-19 19-Dec-19
Amount Offered: ₦ 20.00 billion ₦ 30.00 billion ₦ 100.00 billion
Subscription: ₦ 1.61 billion ₦ 13.18 billion ₦ 49.98 billion
Amount Allotted: ₦ 1.61 billion ₦ 13.18 billion ₦ 49.98 billion
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) and Overnight (O/N) rates dropped to 15.00% and 15.67% from 17.50% and 19.08% 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.

Bonds
A relatively quiet trading day in the bonds secondary market today, with very few transactions seen across the curve. Average yields lost ca -25bps day-on-day, with the February 2028 maturity trading the most to close at 15.36%.

Equities
The Nigerian equities market appreciated today, as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.46% day-on-day to close at 30,878.56pts, with market’s year-to-date returns at -1.76%. This was largely due price appreciation in Guaranty Trust Bank Plc (+2.80%), Stanbic IBTC Holding Plc (+1.06%) and Zenith Banking Plc (+0.92%).

The NSE Industrial, Oil & Gas and Consumer Goods indices lost ca -4bps, -14bps and -1bps day-on-day while the NSE Banking index gained ca +164bps. Access Bank Plc led both the volume and value charts with 155.84m units traded at ₦875.21mn.

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 and Euro at ₦363/$1 and ₦411/€1 respectively, while it depreciated against the Pound Sterling at ₦465/₤1 from ₦463/₤1. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.19/$1 from ₦362.32/$1.

Crude oil prices declined further today, on continued fears of a global economic slowdown in 2019 on the back of recent poor economic data from both China and Japan.. Brent crude oil price lost ca -0.86% at $60.99pb, while WTI crude declined ca -1.09% at $52.43pb, as at report time. Spot gold was down ca -0.12% day-on-day at $1,281.90 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
FIRSTALUM 0.34 0.03 +9.68%
FIDELITYBK 2.29 0.20 +9.57%
UNIONDAC 0.28 0.02 +7.69%
MBENEFIT 0.21 0.01 +5.00%
STERLNBANK 2.14 0.10 +4.90%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
RESORTSAL 0.22 -0.02 -8.33%
SOVRENINS 0.21 -0.01 -4.55%
UACN 8.50 -0.40 -4.49%
NEM 2.39 -0.11 -4.40%
MAYBAKER 2.39 -0.06 -2.45%
Benchmark T-Bills Discount Rates
23-Jan-19 22-Jan-19 Change in Rates
71Days 12.99% 14.10% -1.11%
176Days 13.26% 13.85% -0.59%
323Days 14.75% 14.85% -0.10%
Source: FMDQ DQL for 23 January 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
23-Jan-19 22-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 13.77% 14.25% -0.48%
5 yrs: 15.54% 13-Feb 2020 15.05% 15.43% -0.38%
10 yrs: 16.29% 17 Mar 2027 15.04% 15.12% -0.08%
20 yrs: 16.25% 18-Apr 2037 15.06% 15.07% -0.01%
Source: FMDQ DQL for 23 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 22 12.15% 12.24%
21-Mar-19 57 10.65% 10.83%
01-Aug-19 190 13.00% 13.94%
07-Nov-19 288 14.25% 16.06%

 

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 60.99 (-0.86% 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) 30,878.56 (+0.46% d/d; -1.76% ytd)
Market Capitalisation (₦’Trillion) 11.51
Financial Markets Update – 23 January 2019
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