Investors’ optimistic outlook to global economic growth in 2019 faltered today, after the release of retail sales figures for December 2018 by the U.S. Commerce Department, indicating its biggest monthly drop in retail sales since September 2009. Retail sales in the U.S. declined ca – 1.2% month-on-month, further raising investors’ fears of a global economic slowdown in 2019. Yields on government treasuries of developed economies declined today on increased demand for safe-haven assets, with yield on the U.S. 10yr bond, Japan 10yr bond, U.K. 10yr bond and France 10yr bond all dropping to ca +2.655%, -0.014%, +1.145% and +0.528% respectively.
With continued uncertainty of global economic growth in 2019, on possible economic slowdown in the world’s largest economies – U.S. and China, we expect increasing demand for safe-haven assets in Q1 2019, despite current optimistic sentiments of U.S./China trade negotiations.
Liquidity in the banking system opened negative today, at ca -₦151 billion. In line with its tight monetary policy, the Central Bank of Nigeria (CBN) conducted an Open Market Operation (OMO) auction today.
The treasury bills secondary market continued on a bearish note today, with Sell-pressure seen particularly at the short-end of the curve. Average rate gained ca +12bps day-on-day, with the 28 February maturity traded the most to close at 11.27% from 10.27%. Please find below a summary of the results of today’s Open Market Operation (OMO) Auction (PMA):
|Amount Offered:||₦ 50.00 billion||₦ 150.00 billion||₦ 450.00 billion|
|Subscription:||₦ 40.73 billion||₦ 25.73 billion||₦ 404.90 billion|
|Amount Allotted:||₦ 40.73 billion||₦ 25.73 billion||₦ 404.90 billion|
|Range of bids:||11.0000% – 11.9000%||11.9000% – 13.5000%||14.9500% – 15.0000%|
Open Buy Back (OBB) and Overnight (O/N) rates dropped to 15.00% and 16.00% from 20.00% and 23.17%. 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 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
A relatively active trading day in the bonds secondary market today, with most interest seen on the March 2036 maturity which traded the most to close at 14.56%. Average yield dropped ca -3bps day-on-day.
The Nigerian equities market recovered yesterday’s today, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost ca +0.12% day-onday to close at 32,453.69pts, with market’s year-to-date returns at +3.26%. This was mainly due to price appreciation in prices of Dangote Cement Plc (+0.53%).
The NSE Oil & Gas and Banking indices lost ca -75bps and -45bps respectively, while the NSE Industrial and Consumer Goods indices gained ca +71bps and +27bps. Diamond Bank Plc led the volume chart with 97m units while Zenith Bank Plc led the value chart with ₦997mn worth of trade.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.75/$1. In the parallel market, it depreciated against the Dollar at ₦361/$2 from ₦361/$1, while it remained stable against both the Pound Sterling and Euro at ₦473/₤1 and ₦411/€1 respectively. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.38/$1 from ₦361.58/$1.
Crude oil prices rose for a 4th consecutive day today, with Brent crude oil price reaching its highest in 2019, on continued optimism of a positive outcome of U.S./China trade negotiations. Brent crude oil price gained ca +1.23% at $64.39pb, while WTI crude rose ca +0.91% at $54.39pb, as at report time. Spot gold rose ca +0.02% day-on-day at $1,315.30 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.25% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (December 2018)||11.44 (-25.57% ytd)|
|PMI (January 2019)||58.50|
|MPR (%)||14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||64.39 (+1.23% d/d)|
|External Reserve (US$’billion)||42.91 (-0.48% ytd)|
|GDP % (Q4 2018)||+2.38% (Q3 2018: +1.81% y/y)|
|NSE All Share Index (ASI)||32,453.69 (+0.12% d/d; +3.26% ytd)|
|Market Capitalisation (₦’Trillion)||12.10|