Nigerian Financial Markets Weekly

Nigerian Financial Markets Weekly

Nigerian Markets

Key Events this week:

Nigeria’s economic growth rate for Q4 2018 rose above the +2% mark for the first time in 2018, recording a growth of +2.38% year-on-year vs +1.81% in Q3 2018 and +2.11% in Q4 2017, data released by the Nigerian Bureau of Statistics indicated on Tuesday. This was on the back of a +2.70% growth in the Non-oil sector, while the Oil sector recorded further contraction for a 3rd consecutive quarter, at -1.61% on lower average crude oil production of 1.91 million barrels per day in Q4 vs 1.95 million barrels per day in Q3 2018.

With the global economy expected to grow at a slower pace vs 2018, on the back of continued slowdown in the Eurozone area, China and possible slowdown in the U.S. economy, we expect this to negatively impact on growth in sub-Sahara Africa and Nigeria in 2019. We also expect growth in the nation’s Oil sector to remain subdued in 2019 on implementation of the production-cut of the Organisation of Petroleum Exporting Countries (OPEC) in Q1 2019.

Other Events this week included:

  • Nigeria’s Headline inflation for January 2019 declined to 11.37% year-on-year (y/y), from 11.44% y/y recorded in December 2018, data from the Nigerian Bureau of Statistics indicated on Friday. The drop can be attributed to a drop in food sub-index to 13.51% vs 13.56% in December 2018 while the Core sub-index rose marginally to 9.9% from 9.8%. This comes on the back of increased tightening of banking system liquidity by the Central Bank of Nigeria (CBN) since December 2018, taking out ca ₦2.482 trillion from the banking system in January and ca ₦5.692 trillion in the last 2 months, in its attempt to limit impact of electioneering spending on inflation. We expect the Central Bank of Nigeria (CBN) to sustain its current tight monetary stance after the general elections holding tomorrow, to curtail any negative impact of possible post-election headwinds on headline inflation.
  • Investors’ optimistic outlook to global economic growth in 2019 was negatively impacted towards the end of the
    week, particularly on Thursday and Friday, after the release of retail sales figures for December 2018 by the U.S. Commerce Department, indicating its biggest monthly drop in retail sales since September 2009. Retail sales in the U.S. declined ca -1.2% month-on-month, further raising investors’ fears of a global economic slowdown in 2019, and increasing demand for government treasuries of developed economies. With continued uncertainty of global economic growth in 2019, on possible economic slowdown in the world’s largest economies – U.S. and China, we expect increasing demand for safe-haven assets in Q1 2019, despite current optimistic sentiments of U.S./China trade negotiations.




Banking system liquidity was majorly negative this week, opening at ca -₦159bn. Inflows of ca ₦800bn from maturing Open Market Operations (OMO) treasury bills on Thursday and FX refund was mopped up by the Central Bank of Nigeria (CBN) from the conduct 4 OMO auctions. System liquidity was expected to open the last trading day of the week on a negative note.

Treasury Bills
Trading in the treasury bills market remained bearish for a 2nd consecutive week, on the back of a very tight banking
system. The Central Bank (CBN) conducted 3 Open Market Operations (OMO) auctions in its attempt to further tighten system liquidity, with a Primary Market Auction (PMA) held mid-week. Average rates rose ca +12bps week-on-week. Please find below the summary of the OMO and PMA auctions held this week:

Open Market Operations (OMO) – 11 February 2019
Tenor 94-Days 178-Days 360-Days
Maturity Date: 16-May-19 08-Aug-19 06-Feb-20
Amount Offered: ₦ 5.00 billion 10.00 billion  10.00 billion
Subscription: ₦ 2.41 billion  1.08 billion  34.87 billion
Amount Allotted: ₦ 2.41 billion  1.08 billion  34.87 billion
Range of bids: 11.9000% – 11.9000% 13.5000% – 15.0000% 15.0000% – 15.0000%
Stop Rates 11.9000% 13.5000% 15.0000%


Open Market Operations (OMO) – 12 February 2019
Tenor 93-Days 184-Days 359-Days
Maturity Date: 16-May-19 01-Aug-19 06-Feb-20
Amount Offered: ₦ 10.00 billion  15.00 billion  40.00 billion
Subscription: ₦ 2.08 billion  2.51 billion  16.60 billion
Amount Allotted: Nil Nil   Nil
Range of bids: 11.9000% – 11.9000% 13.5000% – 15.0000% 15.0000% – 15.0000%
Stop Rates No Sale No sale No Sale


Tenor 91-Days 182-Days 364-Days
Maturity Date: 16-May-19 15-Aug-19 13-Feb-20
Amount Offered: ₦ 3.384 billion  10.000 billion  140.00 billion
Subscription: ₦ 11.577 billion  22.114 billion  404.892 billion
Amount Allotted: ₦ 3.384 billion  10.000 billion  140.000 billion
Range of bids: 10.8000% – 12.5000% 12.0000% – 13.5000% 14.8000% – 16.5237%
Stop Rates 10.9700% 13.4000% 14.9500%


Open Market Operations (OMO)  – 14 February 2019
Tenor 91-Days 175-Days 364-Days
Maturity Date: 16-May-19 08-Aug-19 13-Feb-19
Amount Offered: ₦ 50.00 billion  150.00 billion  450.00 billion
Subscription: ₦ 40.73 billion  25.73 billion  440.90 billion
Amount Allotted: ₦ 40.73 billion  25.73 billion  440.90 billion
Range of bids: 11.0000% – 11.9000% 11.9000% – 13.5000% 14.9500% – 15.0000%
Stop Rates 11.9000% 13.5000% 15.0000%

Bank Placements

Open Buy back (OBB) and Overnight (O/N) rates closed at 15.83% and 17.50% from 18.67% and 19.42% levels
respectively, the previous week. Average fixed deposit rates amongst banks monitored showed at the end of
the week:

– 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.


Demand was seen in the bonds secondary market this week, with activities majorly at the mid-to-long end of the curve, particularly the March 2036 which lost -34bps week on-week.


The equities market appreciated for a 2nd consecutive week, with interest majorly from domestic institutional investors. The Nigerian Stock Exchange All Share Index (NSE ASI) gained +3.76% week-on-week to close at 32,715.20pts, with market’s year-to-date returns at +4.06%. This was largely attributed to price appreciation in Dangote Cement Plc (+4.58%), Nigerian Breweries Plc (+6.41%), Nestle Nigeria Plc (+4.33%) and Zenith
Bank Plc (+1.43%).

During the week, the Naira depreciated against the dollar at the interbank market window, at ₦306.75/$1 from ₦306.70/$1. At the parallel market, the Naira depreciated against the U.S. Dollar at ₦362/$1 from ₦361/$1, remained stable against the Pound Sterling at ₦472/₤1 and appreciated against the Euro at ₦410/€1 from ₦411/€1. The Naira remained stable week-on-week at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.54/$1.

AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.25% 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
14-Feb-19 27 10.70% 10.79%
09-Mar-19 83 12.00% 12.34%
01-Aug-19 167 12.20% 12.92%
07-Nov-19 265 14.35% 16.02%


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 65.57 (+6.03% w/w)
External Reserve (US$’billion) 42.86 (-0.59% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 32,715.20 (+3.76% w/w; +4.09% ytd)
Market Capitalisation (₦’Trillion) 12.20


Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
WEMABANK 1.03 0.32 +45.07%
LIVESTOCK 0.73 0.22 +44.00%
DANGFLOUR 9.15 2.30 +33.58%
TRANSCORP 1.71 0.38 +28.57%
ROYALEX 0.33 0.07 +26.92%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CILEASING 7.33 -1.71 -18.92%
MRS 20.85 -2.30 -9.94%
ACADEMY 0.37 -0.04 -9.76%
MEDVIEW 1.70 -0.15 -8.11%
UACN 8.65 -0.70 -7.49%

Nigerian Financial Markets Weekly Update – 15 February 2019

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