Financial Markets Today
Global financial markets appreciated today, on rising optimism of positive outcome of continued U.S./China trade negotiations, with the commencement of a 3rd meeting between delegates of both countries in 2019 today. The U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, German DAX, Chinese SHANGHAI, and Japanese NIKKEI all gained ca +0.12%, +0.22%, +0.28%, +0.09%, +0.05% and +0.10% respectively, while price of gold rose to its highest in 11months at $1,342.90 on continued optimism of the U.S. Federal Reserve Bank (FED) maintaining current dovish monetary stance for a longer period in 2019, and expectation of further weakening in the U.S. dollar vs other global currencies.
With rising expectation of an extension to the U.S./China trade negotiations deadline date and continued U.S. FED dovish stance, we expect further rise in investors’ optimism of global risk assets, particularly as the U.S. dollar weakens further after dropping from a 2-month high.
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 conducted by the Central Bank of Nigeria (CBN) today.
Treasury Bills
A very active and bullish trading day in the treasury bills secondary market today, with demand seen across the curve, particularly on short-dated maturities. The 21 March maturity traded the most to close at 10.12% from 11.49%, with average rate dropping ca -29bps day-on-day.
Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped to 15.00% and 15.83% from 23.33% and 26.08%. 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.
Bonds
A relatively quiet trading day in the bonds secondary market today. Average yield remained stable day-on-day, with the March 2036 maturity trading the most to close at 14.48%.
Equities
The Nigerian equities market gained today, as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.67% day-on-day to close at 32,406.17pts, with market’s year-to-date returns at +3.10%. This was largely on the back of price appreciation in Guaranty Trust Bank Plc (+3.29%) and Zenith Bank Plc (+5.63%).
The NSE Oil & Gas, Consumer Goods and Banking indices gained ca +74bps, +26bps and +297bps respectively, while the NSE Industrial index declined ca -21bps. Transnational Corporation of Nigeria Plc led the volume chart with 120.22m units while Dangote Cement Plc led the value chart with ₦951.61mn worth of trade.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.80/$1. In the parallel market, it remained stable against the Dollar and Euro at ₦360/$2 and ₦411/€1 respectively, while it depreciated against the Pound Sterling at ₦469/₤1 from ₦470/₤1. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.68/$1 from ₦361.66/$1.
Crude oil prices traded mixed today, on rising concerns of slow progress of on-going U.S./China trade negotiations vs increasing impact of output cut by the Organisation of Petroleum Exporting Countries. Brent crude oil price dropped ca -0.29% at $66.31pb, while WTI crude gained ca % at $56.07pb, as at report time. Spot gold rose ca +1.49% day-on-day at $1,341.90 per ounce.
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| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 13.28% per annum |
| Added Benefit | Personal accident insurance cover |
| AIICO Capital Guaranteed Income Note (GIN) Rates p.a. | |||||
| Amount (NGN) | 30 Days | 60 Days | 90 Days | 180 Days | 364 Days |
| 10,000,001 – 50,000,000 | 10.00 | 10.50 | 11.00 | 12.00 | 13.00 |
| 50,000,001 – 100,000,000 | 11.00 | 11.25 | 11.50 | 12.50 | 14.00 |
| 100,000,001 – 400,000,000 | 12.00 | 12.25 | 12.50 | 13.00 | 14.50 |
| Trading Treasury Bills Rates p.a. | |||
| Maturity Dates | Tenor (Days) | Discount Rate | Effective Yield |
| 21-Mar-19 | 30 | 9.95% | 10.03% |
| 09-May-19 | 79 | 11.95% | 12.27% |
| 01-Aug-19 | 163 | 12.45% | 13.18% |
| 07-Nov-19 | 261 | 14.25% | 15.87% |
| Select Macro-economic Indices | |
| Inflation % (December 2018) | 11.44 (-25.57% ytd) |
| PMI (January 2019) | 58.50 |
| MPR (%) | 14 (-5%/+2% around mid-point) |
| CRR (%) | 22.5 |
| Brent Crude Price US$ pbbl | 63.31 (-0.31% d/d) |
| External Reserve (US$’billion) | 42.69 (-0.88% ytd) |
| GDP % (Q4 2018) | +2.38% (Q3 2018: +1.81% y/y) |
| NSE All Share Index (ASI) | 32,406.17 (+0.67% d/d; +3.10% ytd) |
| Market Capitalisation (₦’Trillion) | 12.08 |
Financial Markets Update – 19 February 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.
AIICO Capital is regulated by the Securities and Exchange Commission, and is licensed to provide fund and portfolio management services in Nigeria.
