Financial Markets Today

Financial Markets Today

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.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

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.

Treasury Bills
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:

Tenor 91-Days 189-Days 364-Days
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%
Stop Rates 11.9000% 13.5000% 15.0000%
364-Days Special OMO
09-Jan-20
₦ 45.69 bi l l ion
15.0000%

 

Bank Placements
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.

Bonds
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%.

Equities
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.

 

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
LAWUNION 0.55 0.05 +10.00%
JBERGER 28.40 2.55 +9.86%
ETERNA 4.30 0.35 +8.86%
GUARANTY 33.20 1.90 +6.07%
TRANSCORP 1.25 0.07 +5.93%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
GUINNESS 63.00 -7.00 -10.00%
NEM 1.72 -0.19 -9.95%
RESORTSAL 0.37 -0.04 -9.76%
LINKASSURE 0.65 -0.07 -9.72%
NPFMCRFBK 1.45 -0.15 -9.38%
Benchmark T-Bills Discount Rates
10-Jan-19 09-Jan-19 Change in Rates
84 Days 12.82% 12.82% 0.00%
154 Days 13.85% 13.85% 0.00%
336 Days 15.00% 14.97% 0.03%
Source: FMDQ DQL for 10 January 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
10-Jan-19 09-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 14.21% 14.21% 0.00%
5 yrs: 15.54% 13-Feb 2020 15.23% 14.88% 0.35%
10 yrs: 16.29% 17 Mar 2027 15.39% 15.39% 0.00%
20 yrs: 16.25% 18-Apr 2037 15.41% 15.36% 0.05%
Source: FMDQ DQL for 10 January 2019
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
24-Jan-19 14 14.25% 14.33%
14-Feb-19 35 14.10% 14.29%
21-Mar-19 70 13.65% 14.02%
07-Nov-19 301 14.65% 16.66%

 

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)
CRR (%) 22.5
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

Important Disclaimers
This document has been issued and approved by AIICO Capital and is based on information from various sources that we believe are reliable. However, no representation is made that it is accurate or complete. While reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any opinion expressed herein. This document is for information purposes only. It does not constitute any offer or solicitation to any person to enter into any trading transaction.
Investments discussed in this report may not be suitable for all investors. This report is provided solely for the information of AIICO Capital clients who are then expected to make their own investment decisions. AIICO Capital conducts designated investment business with market counter parties and customers and this document is directed only to such persons. AIICO Capital accepts no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report is for private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of AIICO Capital. Users of this report should bear in mind that investments can fluctuate in price and value. Past performance is not necessarily a guide to future performance.
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