The Debt Management Office (DMO) on behalf of the Federal Government of Nigeria is set to issue a ₦10.69 billion Sovereign Green Bond in the domestic market, with Roadshow planned in Abuja and Lagos for today and tomorrow. The Green Bond is being issued following Nigeria’s endorsement of the Paris Agreement on Climate Change in September 2016, which aims to strengthen global response to the threat of Climate Change. The proceeds of the Green Bond is part of government’s domestic borrowing plan to fund certified environmental projects in the 2017 Appropriation Bill. Nigeria is amongst the few countries in the world and the first African country to issue a Green Bond, which has been assigned a GB1 (Excellent) rating by Moody’s.
We see this as a move in the right direction, as Nigeria is in dire need of funds for infrastructural development and climate initiatives. However, the success or failure of this issuance will be measured not only by the level of subscription but also the impact of initiatives funded with its proceeds.
1. MONEY MARKETS
Liquidity in the banking system opened on a positive note today, with ca ₦787 billion, following inflows from maturing treasury bills of ca ₦210 billion, and primary auction treasury bill maturity of ca ₦131 billion.
The treasury bills market ended the trading day on a bullish note today, with demand seen on the mid-to-long end of the curve, while minimum activity was seen on the short-dated maturities. The demand was driven by inflows from maturing treasury bills of ca ₦210 billion, and primary auction treasury bill maturity of ca ₦131 billion. Average rates lost ca 34bps day-on-day, with the 19 July 2018 bill trading the most, to close at 10.86%.
Open Buy Back (OBB) and Overnight (O/N) rates dropped to 1.42% and 1.88% from 2.50% and 3.00%, 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.
2. CAPITAL MARKETS
Trading activities in the bonds market opened on a bullish note today, following the outcome of the bonds primary auction yesterday. Average yields lost ca 12bps day-on-day, with the March 2027 maturity being the most active paper today, dropping ca 20bps, to close at
The equities market ended the day on a negative note, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost -1.56% to close at 37,933.70pts, with market’s year-to-date returns depreciating to +41.15%. This was due to price depreciation in highly capitalized stocks such as Dangote Cement Plc (-4.12%), Nigerian Breweries Plc (-0.47%), and Zenith Bank Plc (-0.04%). The NSE Oil and Gas index gained 376bps, while the NSE Industrial, Banking, and Consumer Goods indices all lost 308bps, 99bps, and 44bps respectively. First Bank of Nigeria Holdings Plc led the volume charts with 39.97 million units, while Nigerian Breweries Plc led the value charts with ₦2.76 billion worth of trades.
3. FOREIGN EXCHANGE
The Naira appreciated at the interbank market window today, at ₦306.25/$1 from ₦306.30/$1. In the parallel market, it depreciated against the US Dollar and Pound Sterling at ₦364/$1 and ₦483/₤1 from ₦363/$1 and ₦482/₤1 respectively, while it remained stable against the Euro at ₦426/€1. It depreciated at both the NAFEX and NIFEX windows at ₦360.25/$1 and ₦330.91/$1 from ₦360.16/$1 and ₦330.75/$1 respectively.
Crude oil prices fell today, as data from the International Energy Agency (IEA) forecasted an increase in US oil output in 2018, further raising the chances of excess oil supply. Brent Crude price depreciated by -0.19% to $62.32pb, while WTI crude also depreciated by – 0.39% to $56.35pb, as at report time. Spot gold appreciated by +0.66% at $1,256.80 per ounce.
|Top 5 Equitiy Advancers||Top 5 Equity Decliners|
|Benchmark T-Bills Discount Rates|
|14-Dec-17||13-Dec-17||Change in Rates|
|Source: FMDQ DQL for 14 December 2017
*T-Bills Discount Rates are slightly different from current market rates
|Benchmark FGN Bond Yields|
|14-Dec-17||13-Dec-17||Change in Yield|
|3 yrs: 16.00% 29-Jun 2019||13.70%||13.70%||0.00%|
|5 yrs: 15.54% 13-Feb 2020||13.68%||13.79%||-0.11%|
|10 yrs: 16.29% 17 Mar 2027||13.24%||13.45%||-0.21%|
|20 yrs: 16.25% 18-Apr 2037||13.35%||13.50%||-0.15%|
|Source: FMDQ DQL for 14 December 2017|
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||18.45% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||14.50||15.50||16.50||17.50||18.00|
|50,000,001 – 100,000,000||15.50||16.50||17.00||18.00||19.50|
|100,000,001 – 400,000,000||16.50||17.00||17.50||18.50||20.00|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (October 2017)||15.91 (2017; down -14.23% ytd)|
|PMI (November 2017)||55.9|
|MPR (%)||14 (-5/+2 around mid-point)|
|Brent Crude Price US$ pbbl||62.32 (-0.19% d/d)|
|External Reserve (US$’bi l l ion)||36.43 (+40.98% ytd)|
|GDP % (Q3 2017)||+1.40% (ful l year 2016: -1.68% y/y)|
|NSE Al l Share Index (ASI)||37,933.70 (-1.56% d/d; +41.15% ytd)|
|Market Capi tal i s ati on (₦’Tri l l i on)||13.50|