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
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.
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):
|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%|
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.
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.
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 $1,279.80 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.00% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (December 2018)||11.44 (-25.57% ytd)|
|PMI (December 2018)||61.10|
|MPR (%)||MPR (%) 14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||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|