Financial Markets Today
The U.S. equities market declined today, dropping after 8 consecutive days of gains with the U.S. Dow Jones Industrial Average (DJIA), S & P 500 and NASDAQ indices all losing ca -0.26%, -0.26% and -0.24% respectively. This comes after the release of weak economic data with the Philadelphia Federal Reserve business index dropping to negative at -4.1pts, its lowest since May 2016, IHS Markit manufacturing purchasing managers’ index dropping to a 17-months low at 53.7 in February and the Conference Board’s leading economic index declined for a 2nd consecutive month, its first since 2016. This also comes after yesterday’s release of the minutes of the U.S. Federal Reserve meeting held in January, with a change in its monetary stance to a dovish outlook.
We expect the continued release of weak U.S. economic data and increasing expectation of a negative impact on the U.S. economic growth for 2019 to further dampen investors’ expectation of global growth in 2019. We also expect this to keep the U.S. Federal Reserve Bank on the watch to maintain its current dovish monetary stance for a longer period in 2019.
MONEY MARKETS
CAPITAL MARKETS
FOREIGN EXCHANGE
COMMODITIES
Banking system liquidity opened negative today, at ca -₦25.75 billion. There was an Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN) today.
Treasury Bills
A more active and bullish trading day in the treasury bills secondary market today, with demand seen across the curve, on inflow of ca ₦560 billion. Average rates dropped ca -8bps day-on-day, with the 09 May maturity trading the most to close at 11.93% from 12.36%. Please find below a summary of the results of today’s Open Market Operations (OMO) auction:
| Tenor | 98-Days | 189-Days | 364-Days |
| Maturity Date: | 30-May-19 | 29-Aug-19 | 20-Feb-20 |
| Amount Offered: | ₦ 50.00billion | ₦ 100.00billion | ₦ 400.00 billion |
| Subscription: | ₦ 7.91billion | ₦ 53.06billion | ₦ 725.61 billion |
| Amount Allotted: | ₦ 7.91billion | ₦ 53.06billion | ₦ 725.61 billion |
| Range of bids: | 11.9000% – 11.9000% | 13.5000% – 13.5000% | 14.9800% – 15.0000% |
| Stop Rates | 11.9000% | 13.5000% | 15.0000% |
Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 13.67% and 14.58% from 15% and 15.50%. 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 active trading in the bonds secondary market today, with most of market’s activities seen at the mid-to-long end of the curve. Average yield remained flat day-on-day, with the February 2028 maturity trading the most to close at 14.89%.
Equities
The Nigerian equities market closed on a negative note after 2 consecutive trading day of gains, with the Nigerian Stock Exchange All Share Index (NSE ASI) losing ca -0.14% day-on-day to close at 32,568.65pts, with market’s year-to-date returns at +3.62%. This was mainly due to price decline in Zenith Bank Plc (-1.94%).
The NSE Consumer Goods and Banking indices lost ca -85bps and -27bps respectively, while the NSE Industrial and Oil & Gas indices gained ca +16bps and +49bps respectively. Transnational Corporation of Nigeria Plc led the volume chart with 24.73m units while Guaranty Trust Bank Plc led the value chart with ₦630.23mn 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 at ₦360/$1, while it appreciated against the Pound Sterling and Euro at ₦471/₤1 and ₦410/€1 from ₦471/₤1 and ₦410/€1 respectively. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.59/$1 from ₦361.78/$1.
Crude oil prices declined today, as data from the U.S. Energy Information Administration (EIA) showed crude oil production rose to its highest in history of 12 million barrels per day, with stockpiles rising for a 5th consecutive week. Brent crude oil price lost ca -0.22% at $66.93pb, while WTI crude declined ca -0.52% at $56.86pb, as at report time. Spot gold rose ca -1.60% day-on-day at $1,326.30 per ounce
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 13.28% per annum |
| Added Benefit | Personal accident insurance cover |
| AIICO Capital Guaranteed Income Note (GIN) Rates p.a. | |||||
| Amount (NGN) | 30 Days | 60 Days | 90 Days | 180 Days | 364 Days |
| 10,000,001 – 50,000,000 | 10.00 | 10.50 | 11.00 | 12.00 | 13.00 |
| 50,000,001 – 100,000,000 | 11.00 | 11.25 | 11.50 | 12.50 | 14.00 |
| 100,000,001 – 400,000,000 | 12.00 | 12.25 | 12.50 | 13.00 | 14.50 |
| Trading Treasury Bills Rates p.a. | |||
| Maturity Dates | Tenor (Days) | Discount Rate | Effective Yield |
| 21-Mar-19 | 28 | 10.00% | 10.08% |
| 09-May-19 | 77 | 11.80% | 12.10% |
| 01-Aug-19 | 161 | 11.80% | 12.45% |
| 07-Nov-19 | 259 | 14.20% | 15.79% |
| Select Macro-economic Indices | |
| Inflation % (December 2018) | 11.44 (-25.57% ytd) |
| PMI (January 2019) | 58.50 |
| MPR (%) | 14 (-5%/+2% around mid-point) |
| CRR (%) | 22.5 |
| Brent Crude Price US$ pbbl | 66.93 (-0.22% d/d) |
| External Reserve (US$’billion) | 42.69 (-0.93% ytd) |
| GDP % (Q3 2018) | +2.38% (Q3 2018: +1.80% y/y) |
| NSE All Share Index (ASI) | 32,568.65 (-0.14% d/d; +3.62% ytd) |
| Market Capitalisation (₦’Trillion) | 11.46 |
Financial Markets Update – 21 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.
