Financial Markets Today

Financial Markets Today

Yields of government treasuries of developed markets (DMs) declined to new 14-months low, with an inversion in the U.S. yield curve as the 10yr U.S. treasury dropped below the 3yr treasury yield, its first since 2007 and a possible indication of a recession in economic growth. This comes as the German 10yr treasury declined into negative territory, its first since October 2016 on the back of rising concerns of a global slowdown in economic growth in 2019 with the U.S. Federal Reserve Bank, Bank of England (BOE) and the European Central Bank (ECB) all deepening their dovish monetary stances and lowering economic growth outlook in their respective economies earlier in the week. Yields of the U.S. 10yr treasury, UK 10yr treasury and French 10yr treasury all dropped to ca +2.435%, +1.008% and +0.3426% respectively, with both the 10yrs German and Japanese treasuries in negative territory of ca -0.023% and -0.087% respectively.


We expect continued volatility in global financial markets in the near term as investors’ continue to weigh the impact of the deepened dovish stances of most Central Banks of developed economies on the global financial markets amid rising investors’ interest in safe-haven risk assets of DMs in the near term. We also expect this to be potentially beneficial for capital flows to Emerging (EMs) and Frontier (FMs) markets in the 2019 vs H2 2018, particularly commodity dependent economies like Nigeria, should Brent crude oil price remain elevated above current levels of ca $66.44 per barrel.





Banking system liquidity opened on a positive note today, at ca ₦20.93bn from yesterday’s opening levels of ca ₦188.15bn. There was no Open Market Operation (OMO) auction today by the Central Bank of Nigeria (CBN).

Treasury Bills

A relatively less active trading day in the treasury bills secondary market today, with traders maintaining wide spreads between bid and offer rates, after yesterday’s offering of the long-end 350-day maturity by the Central Bank (CBN) at its Open Market Operation (OMO) auction, for the 1st time in 2 weeks. Average rates lost ca -1bps day-on-day, with the 12 September 2019 maturity trading the most to close at 12.84% from 13.24%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates rose day-on-day to 14.25% and 14.83% from 10.17% and 11.17%, 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 7.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.

A relatively quiet trading day in the domestic bonds secondary market today, with activities seen at the mid-to-long end of the curve. Average yield rose ca +6bps day-on-day, with the March 2027 maturity trading the most to close at 14.29%.


Yield levels rose today in the nation’s Eurobonds market today, with average yield gaining ca +10bps day-on-day, particularly the November 2047 maturity which gained ca +13bps day-on-day.

The Nigerian equities market gained after 6 consecutive trading days of losses, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.82% day-on-day to close at 31,139.35pts, with market’s year-to-date returns at -0.93%. This was largely on the back of gains in Dangote Cement Plc (+0.85%), Guaranty Trust Bank Plc (+3.73%) and Zenith Bank Plc (+0.23%).

The NSE Banking, Consumer Goods and Industrial indices all gained ca +137bps, +40bps and +172bps respectively, while the NSE Oil & Gas index lost ca -36bps. Access Bank Plc led both the volume and value charts with 98.93m traded at ₦722.23mn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.90/$1. In the parallel market, it remained stable against the Dollar, Pound sterling and Euro at ₦360/$1, ₦406/€1 and ₦473/₤1 respectively. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.20/$1 from ₦359.95/$1.

Crude oil prices declined sharply today, on continued concerns of the impact of a slowdown in global economic growth in 2019 on global crude oil demand. Brent crude oil price dropped ca -2.12% at $66.42pb, while WTI shed ca -2.25% at $58.63pb, as at report time. Spot gold gained ca +0.34% to $1,311.80 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
PRESTIGE 0.55 0.05 +10.00%
MEYER 0.59 0.05 +9.26%
INTBREW 26.00 1.95 +8.11%
WAPIC 0.42 0.03 +7.69%
CHIPLC 0.29 0.02 +7.41%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CADBURY 9.90 -1.10 -10.00%
UPL 1.85 -0.20 -9.76%
UAC-PROP 1.70 -0.16 -8.60%
REGALINS 0.24 -0.02 -7.69%
PZ 10.50 -0.75 -6.67%
Benchmark T-Bills Discount Rates
22-Mar-19 21-Mar-19 Change in Rates
76Days                                      . 11.90% 12.19% -0.29%
167Days 13.22% 13.23% -0.01%
342Days. 12.89% 12.78% 0.11%
Source: FMDQ DQL for 22 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
22-Mar-19 21-Mar-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.67% 14.67% 0.00%
5 yrs: 15.54% 27-Apr 2023 14.58% 14.46% 0.12%
10 yrs: 16.29% 17 Mar 2027 14.29% 14.40% -0.11%
20 yrs: 16.25% 18-Apr 2037  . 14.13% 14.12% 0.01%
Source: FMDQ DQL for 22 March 2019
Benchmark FGN EuroBond Yields
22-Mar-19 21-Mar-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.87% 4.80% 0.07%
5 yrs: NGERIA 6 3/8 07/12/23 5.36% 5.28% 0.08%
10 yrs: NGERIA 6 1/2 11/28/27 6.62% 6.54% 0.08%
20 yrs: NGERIA 7.696 02/23/38 7.75% 7.63% 0.12%
30 yrs: NGERIA 9.248 01/21/49 8.24% 8.12% 0.12%
Source: FMDQ DQL for 22 March 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.40% 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-19 132 11.45% 11.94%
17-Oct-19 209 12.70% 13.70%
07-Nov-19 230 12.65% 13.75%
16-Jan-20 300 12.55% 13.99%


Select Macro-economic Indices
Inflation % (February 2019) 11.31 (-1.14% ytd)
PMI (February 2019) 57.10
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 66.42 (-2.12% d/d)
External Reserve (US$’billion) 43.50 (-0.89% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 31,139.35 (+0.82% d/d; -0.93% ytd)
Market Capitalisation (₦’Trillion) 11.61

Financial Markets Update – 22 March 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.