All of us at AIICO Capital wish you all the Happiness in the New Year.
Nigeria’s Gross Domestic Product (GDP) is projected at 2.2% in 2019, higher than 2.1% earlier projected in June last year but below the 3.01% projected by the Federal government, data from the World Bank’s Global Economic Prospect report released yesterday indicated. The projection is based on expected recovery in the Nigerian Oil sector and a rise in crude oil production. It also raised the forecast for Sub-Sahara Africa growth to 3.4% from 2.9% earlier forecasted, while lowering global economic growth to 2.9% from 3% forecasted last year.
With rising risk of negative impact of global financial markets uncertainties, U.S./China trade talks uncertainties, high volatility of Brent crude oil price and expected monetary policy normalization in developed economies, we expect global GDP growth to remain subdued in 2019, as well as subdued GDP growth in Nigeria, particularly in Q1 2019 with investors risk focus on the general elections in February and impact of implementation of crude oil production-cut by Nigeria at ca 1.68 million barrels per day (mbpd) vs current 1.78 mbpd and Q1 2018 average of ca 2.03 mbpd.
Liquidity in the banking system opened negative today, at ca -₦97.33bn, with inflow of ca ₦375 billion from maturing Open Market Operations (OMO) treasury bills expected to ease system liquidity. In line with the tight monetary stance of the Central Bank of Nigeria (CBN), it conducted an OMO auction and a Special OMO sale today.
A very active trading day in the treasury bills secondary market today, with focus on short-dated maturities and very little activity at the long-end. Average rate dropped ca -3bps day-on-day, with the 07 February 2019 maturity trading the most to close at 14.45% from 15.15%. Please find below a summary of the result of today’s Open Market Operation (OMO) auction:
|Maturity Date:||11-Apr-19||18-Jul -19||09-Jan-20|
|Amount Offered:||₦ 50.00 billion||₦ 100.00 billion||₦ 250.00 billion|
|Subscription:||₦ 1.19 bi l l i on||₦ 12.68 billion||₦ 283.62 billion|
|Amount Allotted:||₦ 1.19 billion||₦ 12.68 billion||₦ 283.62 billion|
|Range of bids:||11.5000% – 11.9000%||13.5000% – 15.0000%||15.0000% – 15.0000%|
|364-Days Special OMO|
|₦ 45.69 bi l l ion|
Open Buy Back (OBB) and Overnight (O/N) rates dropped to 22.67% and 24.67% from 26.67% and 27.67% respectively. Average fixed deposit rates amongst banks monitored showed:
- tier-1 rated banks at 3.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
- tier-2 rated banks at 8.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.
The bonds secondary market traded on a quiet note today, with average yields gaining ca +10bps day-on-day. The March 2026 maturity traded the most to close at 15.53%.
The Nigerian equities market appreciated today, its first day-on-day gain in 2019, as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.64% day-on-day to close at 29,517.73pts, with market’s year-to-date returns at -6.09%. This was due to price appreciation in highly capitalized stocks as Dangote Cement Plc (+0.88%), Guaranty Trust Bank Plc (+6.07%), Nigerian Breweries Plc (+0.13%) and Zenith Bank Plc (+2.86%).
The NSE Banking, Oil and Gas and Industrial indices both gained ca +274bps, +13bps and +224bps respectively, while NSE Consumer Goods index lost ca -175bps. Custodian Investment Plc led both the volume and value charts with 120.27m units traded at ₦697.61mn.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.90/$1. In the parallel market, it appreciated against the Dollar at ₦362/$1 from ₦361/$1, and remained stable against the Pound Sterling and Euro at ₦460/₤1 and ₦410/€1 respectively. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦364.84/$1 from ₦365.20/$1.
Crude oil prices declined today, after an 8-day rally that pushed Brent crude price above $60 per barrel, as investors evaluate the impact of yesterday’s close to the U.S./China trade talks without clear resolutions. Brent crude oil price dropped ca -0.76% at $60.97pb, while WTI crude lost ca -1.07% at $51.80pb, as at report time. Spot gold lost ca -0.03% day-on-day at $1,291.60 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.05% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (November 2018)||11.28 (-26.61% ytd)|
|PMI (December 2018)||61.10|
|MPR (%)||MPR (%) 14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||60.97 (-0.76% d/d)|
|External Reserve (US$’bi l l ion)||43.05 (-0.16% ytd)|
|GDP % (Q3 2018)||+1.81% (Q2 2018: +1.50% y/y)|
|NSE Al l Share Index (ASI)||29,517.73 (+0.62% d/d; -6.09% ytd)|
|Market Capi tal i s ati on (₦’Tri l l i on)||11.01|