All of us at AIICO Capital wish you all the Happiness in the New Year.
Global financial markets appreciated today, on rising optimism of a positive resolution of U.S./China trade negotiations. This can be attributed to a Bloomberg report which indicated China planned to increase its yearly imports from the U.S. by ca $1 trillion over the next 6 years. This raised investors’ interest in risk assets, with the U.S. Dow Jones Industrial Average, S & P 500, NASDAQ, German DAX, London’s FTSE and Chinese SHANGHAI indices all gaining ca +1.38%, +1.32%, +1.03%, +2.63%, +1.95% and +1.42% respectively. Crude oil prices also rose today, with Brent crude oil price gaining ca +2.40% day-on-day.
We expect investors interest in risk assets to remain positive in the near term on the back of current positive momentum of U.S./China trade negotiations. However, we expect high volatility to persist in the global financial markets in 2019 on fears of a global economic slowdown in 2019 and a further slowdown in China’s economic growth.
Liquidity in the banking system opened positive today, at ca ₦393.08bn. There was no Open Market Operations (OMO) auction conducted today by the Central Bank of Nigeria (CBN).
The relatively active trading day in the treasury bills secondary market today, with demand seen at the short-end of the curve. Average rate dropped ca -19ps day-on-day, with the 21 February 2019 maturity trading the most to close at 13.82%.
Open Buy Back (OBB) and Overnight (O/N) rates rose to 15.33% and 16.17% from 13.00% and 13.50% 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.
Another very quiet trading day in the bonds secondary market today, with only a few sell-offs seen across the curve, particularly on the March 2036 maturity which traded the most to close at 15.26%. Average yields gained ca +13bps day-on-day.
The rally in the Nigerian equities market continued for a 7th consecutive trading day as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +1.38% day-on-day to close at 31,005.17pts, with market’s year-to-date returns at -1.35%. This was largely on the back of gains in Dangote Cement Plc (+2.58%), Nestle Nigeria Plc (+3.49%) and Nigerian Breweries Plc (+2.86%).
The NSE Industrial, Oil & Gas and Consumer Goods indices gained ca +421bps, +9bps and +203bps respectively, while the NSE Banking index lost ca -37bps. Diamond Bank Plc led the volume chart with 72.18m units while Guaranty Trust Bank Plc led the value chart with trades worth ₦1.49bn.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.85/$1. In the parallel market, it remained stable against the Dollar and Euro at ₦362/$1 and ₦411/€1 respectively, while it appreciated against the Pound Sterling at ₦463/₤1 from ₦464/₤1. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.33/$1 from ₦363.35/$1.
Crude oil prices rose sharply to a 6-week high today, after the Chinese government submitted a plan to ease trade imbalance with the U.S., in a bid to resolve ongoing trade dispute. Brent crude oil price rose ca +2.58% at $62.76pb, while WTI crude gained ca +3.23% at $53.75pb, as at report time. Spot gold was down ca -0.73% day-on-day at $1,282.80 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.00% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (November 2018)||11.44 (-25.57% ytd)|
|PMI (December 2018)||61.10|
|MPR (%)||14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||62.76 (-2.58% d/d)|
|External Reserve (US$’bi l l ion)||43.10 (-0.03% ytd)|
|GDP % (Q3 2018)||+1.81% (Q2 2018: +1.50% y/y)|
|NSE Al l Share Index (ASI)||31,005.17 (+1.06% d/d; -5.09% ytd)|
|Market Capi tal i s ati on (₦’Tri l l i on)||11.40|