Financial Markets Today
Nigeria’s Headline inflation for March 2019 declined to 11.25% year-on-year (y/y), from 11.31% y/y recorded in February 2019, its lowest in 7-months, data from the Nigerian Bureau of Statistics showed today. The drop can be attributed to continued drop in both the sub-indices that make up the headline inflation with the food sub-index dropping to 13.45% vs 13.47% in February 2019, while the Core sub-index declined to 9.50% from 9.80%. The continued drop in headline inflation supports current shift in Monetary Policy Committee’s (MPC) drive to boost economic growth with its new rate direction.
With expectation of continued subdued outlook to global economic growth in 2019 and the International Monetary Fund (IMF) cutting economic growth expectation for Sub-Sahara Africa, we expect the CBN to maintain its efforts to stimulate economic growth in the coming months, with possibly further rate cuts in the later parts of 2019.
MONEY MARKETS
CAPITAL MARKETS
FOREIGN EXCHANGE
COMMODITIES
Banking system liquidity was expected to open on a negative note today. There was no Open Market Operation (OMO) auction by the Central Bank of Nigeria (CBN) today.
Treasury Bills
The treasury bills secondary market continued on a bearish note today, as the interbank liquidity squeeze barely improved, with some sell-offs on short-to-mid dated maturities. Average yields gained ca +2bps day-on-day with the 20 June19 maturity closing at 11.58% from 10.99%.
Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates crashed day-on-day to 16.14% and 17.43% from 40% from 42.93%. 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.
Bonds
A relatively quiet trading day in the bonds secondary market today, with very few trades seen across the curve. Average yields shed ca -5bps day-on-day with the March 2027 maturity closing at 14.34% from 14.35%.
Eurobonds
A relatively flat trading day in the nations Eurobonds market, with mixed sentiments and no strong direction for most of the day. Average yields remained unchanged day-on-day as the January 2049 maturity remained at 8.30%.
Equities
The Nigerian equities market closed positive today, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.85% day-on-day to close at 29,746.24pts, and market’s year-to-date returns at -5.36%. This was majorly on the back of gains in Nestle Nigeria Plc (+3.31%), Zenith Bank Plc (+1.95%) and Guaranty Trust Bank Plc (+1.42%).
The NSE Banking, Industrial and Consumer Goods indices gained ca +1.66%, +0.01% and +1.56% respectively while the Oil & Gas index shed ca -0.13%. Union Bank Plc led the volume chart with 134m units while Guaranty Trust Bank Plc led the value chart at ca ₦2.15bn.
The Naira traded flat against the dollar in the interbank and parallel markets today at ₦306.95 and ₦360/$1 respectively. It was also stable against the Pound sterling and the Euro at ₦475/₤1 and ₦404/€1 respectively in the parallel market. In the Nigerian Autonomous Foreign Exchange (NAFEX) window, the Naira appreciated marginally against the Dollar to close at ₦360.18/$1 from ₦360.34/$1.
Oil prices marginally gained today but prices remained pressured due to expectations of higher U.S. inventories and concern about Russia’s willingness to stick with OPEC-led supply cuts. Brent crude oil price gained ca +0.01% day-on-day at $71.19pb, while WTI gained ca +0.21% day-on-day at $63.53pb, as at report time. Spot gold dropped to a near 3-month low, shedding ca -0.89% to close at $1,279.80 per ounce.
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| Benchmark T-Bills Discount Rates | ||||
| 16-Apr-19 | 15-Apr-19 | Change in Rates | ||
| 65Days . | 11.58% | 10.99% | 0.59% | |
| 156Days- | 13.06% | 13.00% | 0.06% | |
| 352Days. | 12.87% | 12.87% | 0.00% | |
| Source: FMDQ DQL for 16 April 2019 *T-Bills Discount Rates are slightly different from current market rates |
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| Benchmark FGN Bond Yields | ||||
| 16-Apr-19 | 15-Apr-19 | Change in Yield | ||
| 3 yrs: 16.00% 15-Jul-2021 | 14.62% | 14.82% | -0.02% | |
| 5 yrs: 15.54% 27-Apr 2023 | 14.45% | 14.45% | 0.00% | |
| 10 yrs: 16.29% 17 Mar 2027 | 14.35% | 14.35% | 0.00% | |
| 20 yrs: 16.25% 18-Apr 2037 . | 14.45% | 14.43% | 0.02% | |
| Source: FMDQ DQL for 16 April 2019 | ||||
| Benchmark FGN EuroBond Yields | ||||
| 16-Apr-19 | 15-Apr-19 | Change in Yield | ||
| 3 yrs: NGERIA 6 3/4 01/28/21 | 4.90% | 4.89% | 0.01% | |
| 5 yrs: NGERIA 6 3/8 07/12/23 | 5.53% | 5.52% | 0.01% | |
| 10 yrs: NGERIA 6 1/2 11/28/27 | 6.71% | 6.72% | -0.01% | |
| 20 yrs: NGERIA 7.696 02/23/38 | 7.78% | 7.78% | 0.00% | |
| 30 yrs: NGERIA 9.248 01/21/49 | 8.30% | 8.30% | 0.00% | |
| Source: FMDQ DQL for 16 April 2019 | ||||
| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 13.46% 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 |
| 01-Aug-19 | 107 | 10.90% | 11.26% |
| 17-Oct-19 | 184 | 12.60% | 13.45% |
| 07-Nov-19 | 205 | 12.60% | 13.56% |
| 16-Jan-20 | 275 | 12.45% | 13.74% |
| Select Macro-economic Indices | |
| Inflation % (March 2019) | 11.25 (-1.16% ytd) |
| PMI (March 2019) | 57.40 |
| MPR (%) | 13.5 (-5%/+2% around mid-point) |
| CRR (%) | 22.5 |
| Brent Crude Price US$ pbbl | 71.19 (+0.01% d/d) |
| External Reserve (US$’billion) | 44.721 (+2.30% ytd) |
| GDP % (Q4 2018) | +2.38% (Q3 2018: +1.81% y/y) |
| NSE All Share Index (ASI) | 29,746.24 (+0.85% d/d; -5.36% ytd) |
| Market Capitalisation (₦’Trillion) | 11.17 |
Financial Markets Update – 18 April 2019
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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