Financial Markets Today

Financial Markets Today

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

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) commenced its first meeting of 2019 today, with focus expected to be on current uncertainties in the global financial markets, expectation of a global economic slowdown, pick-up in electioneering activities towards February general elections, possible inflationary pressures and FX stability. It is also expected to consider current uncertainties in the global crude oil market, possible impact on FX revenues for the government and possible capital flight to developing economies (DMs) from Emerging (EMs) and Frontier (FMs) markets on continued normalization of monetary policies by Central Banks of DMs.

We expect the MPC to maintain all key policy rates at the end of tomorrow’s meeting, while maintaining its current tight liquidity stance with multiple conduct of Open Market Operations (OMO) auctions to keep banking system liquidity significantly low, while continuing its FX intervention in all segments of the current multiple FX windows in a bid to maintain FX stability

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened on a positive note today, at ca ₦275.35bn. There was no Open Market Operations (OMO) auction conducted today by the Central Bank of Nigeria (CBN), in line with its tight monetary policy.

Treasury Bills
A more active trading day in the treasury bills secondary market today, with demand pressure seen particularly on short-end of the curve. Average rate dropped ca -8ps day-on-day, with the 21 February 2019 maturity trading the most to close at 13.16% from 13.86%. Pease find below a summary of the results of today’s Open Market Operations (OMO):

Tenor 94-Days 178-Days 353-Days
Maturity Date: 25-Apr-19 18-Jul -19 09-Jan-20
Amount Offered: ₦ 50.00 billion ₦ 100.00 billion ₦ 200.00 billion
Subscription: ₦ 12.630 bi l l i on ₦ 27.370 bi l l ion ₦ 139.600 billion
Amount Allotted: ₦ 12.630 bi l l i on ₦ 27.370 bi l l ion ₦ 139.600 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 rose to 25.33% and 27.17% from 15.33% and 16.17% 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 only very few transactions seen across the curve, particularly on the March 2028 maturity which traded the most to close at 15.36%. Average yields gained ca +1bps day-on-day.

Equities
The Nigerian equities market declined today, after 7 consecutive days of gains, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost ca -0.88% day-on-day to close at 30,732.72pts, with market’s year-to-date returns at -2.22%. This was largely due price depreciation in Dangote Cement Plc (-2.51%), and Guaranty Trust Bank Plc (-0.78%).

The NSE Industrial index gained ca +97bps day-on-day while the NSE Banking and Oil & Gas indices lost ca -14bps and -455bps respectively. The NSE Consumer Goods index remained flat. Diamond Bank Plc led the volume chart with 239.36m units while Guaranty Trust Bank Plc led the value chart with trades worth ₦3.80bn.

The Naira appreciated against the dollar at the interbank market window today, at ₦306.80/$1 from ₦306.85/$1. In the parallel market, it remained stable against the Dollar and Euro at ₦362/$1 and ₦411/€1 respectively, while it depreciated against the Pound Sterling at ₦464/₤1 from ₦463/₤1. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.39/$1 from ₦362.33/$1.

Crude oil prices rose today, supported by investors optimism of the impact of production-cut implementation by the Organisation of Petroleum Exporting Countries (OPEC), despite a further drop in Chinese economic growth for Q4 2018 at 6.4% from 6.5% in Q3 2018. Brent crude oil price rose ca +0.16% at $62.80pb, while WTI crude gained ca +0.26% at $53.94pb, as at report time. Spot gold was down ca -0.22% day-on-day at $1,279.80 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
LINKASSURE 0.61 0.05 +8.93%
ABCTRANS 0.29 0.15 +7.41%
CCNN 26.90 0.01 +7.17%
LIVESTOCK 0.51 0.01 +6.25%
JAIZBANK 0.53 0.07 +6.00%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
ETRANZACT 3.25 -0.31 -8.71%
SEPLAT 530.00 -46.00 -7.99%
RESORTSAL 0.24 -0.02 -7.69%
SOVRENINS 0.24 -0.02 -7.69%
MBENEFIT 0.20 -0.01 -4.76%
Benchmark T-Bills Discount Rates
21-Jan-19 18-Jan-19 Change in Rates
73Days 13.62% 13.61% 0.01%
178Days 13.36% 13.32% 0.04%
325Days 14.69% 14.89% -0.20%
Source: FMDQ DQL for 21 January 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
21-Jan-19 18-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 13.89% 13.80% 0.09%
5 yrs: 15.54% 13-Feb 2020 15.43% 15.48% -0.05%
10 yrs: 16.29% 17 Mar 2027 15.14% 15.04% 0.10%
20 yrs: 16.25% 18-Apr 2037 15.27% 15.24% 0.03%
Source: FMDQ DQL for 21 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
31-Jan-19 10 13.55% 13.60%
14-Feb-19 24 12.45% 12.55%
21-Mar-19 59 11.20% 11.41%
07-Nov-19 290 14.25% 16.07%

 

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 62.80 (+0.16% d/d)
External Reserve (US$’billion) 43.10 (-0.03% ytd)
GDP % (Q3 2018) +1.81% (Q2 2018: +1.50% y/y)
NSE Al l Share Index (ASI) 30,732.72 (-0.88% d/d; -2.22% ytd)
Market Capitalisation (₦’Trillion) 11.46

Financial Markets Update – 21 January 2019
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