Nigerian Financial Markets Weekly

Nigerian Financial Markets Weekly

Nigerian Markets

Key Events this week:

Yields on the U.S. 10yr Treasury bonds declined this week, dropping to +2.632% from +2.691% last week on continued demand for safe-haven investments and on increased investors’ uncertainties of the monetary policy normalization drive of the U.S. Federal Reserve Bank (Fed). This came as the former Chairperson of the Fed – Janet Yellen indicated the possibility of the Fed cutting its benchmark interest rate if the U.S. economy was negatively impacted by the expected slowdown in global economic growth in 2019, and as released economic data from both China and the Eurozone so far pointing to continued economic slowdown in both regions in Q1 2019.

We expect investors’ uncertainties of global financial markets to remain strong in the near term, as markets await the release of U.S. Q4 2018 GDP figures. We also expect this to further drive demand for safe-haven risk assets of developed economies and increase volatility in risk asset prices for the reminder of Q1 2019.

Other Events this week included:

  • Yields in the domestic debt market declined sharply this week, with maturities at the long-end of the curve dropping ca 35bps – 50bps week on week, to ca 14.40% levels on the April 2037 maturity. This was attributed to a rise in demand from both local and foreign Portfolio investors (FPIs) for government bond securities, as inflows from FPIs through the Investors and Exporters FX (I & E FX) window rose to ca $1.3 billion in January 2019 vs $0.459 billion in December 2018. We expect a rise in volatility of fixed income yields as we head into the week of general elections, and with the Central Bank (CBN) maintaining its tight liquidity stance through the conduct of Open Market Operations (OMO) auctions to reduce banking system liquidity.
  • Global equities markets also tuned sharply volatile this week, on increased investors’ fears of a return of U.S./China trade tensions, after an optimistic opening on U.S. federal Reserves’ dovish inclination the previous week. This came as a CNBC report indicated the unlikely possibility of a deal been reached before the 31 March deadline, in current on-going trade negotiations between the world’s 2 largest economies. Major benchmark indices which had gained ca +4% by Wednesday, declined ca -1.5% on Friday. We expect further rise in investors’ uncertainties of
    global financial in Q1 2019 on the back of growing expectation of a slowdown in global economic growth, fears of economic slowdown in both the world’s 2 largest economies – U.S. and China, possible return and escalation of trade tensions and lower crude oil demand vs 2018.




Banking system liquidity was majorly negative this week, opening at ca ₦132bn and closing in the red. Inflows of ca ₦315bn from maturing Open Market Operations (OMO) treasury bills on Thursday was mopped up, as the Central Bank of Nigeria (CBN) conducted 4 OMO auctions. System liquidity opened the last trading day of the week negative at ca -₦127bn

Treasury Bills
A largely bearish week in the treasury bills market, with sell-off seen on the back of a tight banking system. The Central Bank (CBN) conducted 4 Open Market Operations (OMO) auctions in its attempt to further tighten system liquidity. Average rates rose ca +6bps week-on-week. Please find below the summary of the OMO auctions held this week:

Open Market Operations (OMO) – 04 February 2019
Tenor 108-Days 192-Days 360-Days
Maturity Date: 23-May-19 15-Aug-19 30-Jan-20
Amount Offered: ₦ 20.00 billion  30.00 billion  100.00 billion
Subscription: ₦ 7.58 billion  15.94 billion  109.14 billion
Amount Allotted: ₦ 7.58 billion  15.94 billion  109.14 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) – 05 February 2019
Tenor 99-Days 190-Days 330-Days
Maturity Date: 16-May-19 15-Aug-19 02-Jan-20
Amount Offered: ₦ 10.00 billion  20.00 billion  40.00 billion
Subscription: ₦ 19.42 billion  6.64 billion  39.96 billion
Amount Allotted: ₦ 19.42 billion ₦ 6.64 billion  39.96 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) – 06 February 2019
Tenor 93-Days 191-Days 359-Days
Maturity Date: 09-May-19 15-Aug-19 30-Jan-20
Amount Offered: ₦ 10.00 billion  20.000 billion  50.00 billion
Subscription: ₦ 44.45 billion  14.20 billion  64.89 billion
Amount Allotted: ₦ 44.45 billion  14.20 billion  64.89 billion
Range of bids: 11.9000% – 11.9000% 13.5000% – 15.0000% 15.0000% – 15.0000%
Stop Rates 11.9000% 13.5000% 15.0000%


Tenor 119-Days 182-Days 364-Days
Maturity Date: 06-Jun-19 08-Aug-19 13-Feb-19
Amount Offered: ₦ 30.00 billion  70.00 billion  150.00 billion
Subscription: ₦ 39.90 billion  10.59 billion  270.48 billion
Amount Allotted: ₦ 39.90 billion  10.59 billion  270.48 billion
Range of bids: 11.9000% – 11.9000% 13.5000% – 15.0000% 15.0000% – 15.0000%
Stop Rates 11.9000% 13.5000% 15.0000%

Bank Placements

Open Buy back (OBB) and Overnight (O/N) rates closed at 18.67% and 19.42% from 11.07% and 11.86% levels respectively, the previous week. Average fixed deposit rates amongst banks monitored showed at the end of the week:

– tier-1 rated banks at 3.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.

– tier-2 rated banks at 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.


Continued demand in the bonds secondary market last week, with activities majorly at the mid-to-long end of the curve, particularly the March 2036 which lost -47bps weekon- week. Average yield dropped ca -7bps week-on-week.


The equities market gained this week, on continued interest from domestic institutional investors. The Nigerian Stock Exchange All Share Index (NSE ASI) gained +2.92% week-on-week to close at 31,529.92pts, with market’s year-to-date returns at +0.32%. This was largely attributed to price appreciation in Nigerian Breweries Plc (+5.41%), Guaranty Trust Bank Plc (+14.69%), Nestle Nigeria Plc (+5.63%) and Zenith Bank Plc (+6.32%).

During the week, the Naira appreciated at the interbank market window at ₦306.70/$1 from ₦306.75/$1. At the parallel market, the Naira remained stable against the US Dollar, Pound Sterling and Euro at ₦361/$, ₦472/₤1 and ₦411/€1. The Naira appreciated week-on-week at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.54/$1 from ₦362.68/$1.

AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.22% 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
28-Feb-19 20 9.80% 9.85%
21-Mar-19 41 10.60% 10.73%
01-Aug-19 174 11.70% 12.39%
07-Nov-19 272 14.35% 16.07%


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 61.84 (-1.45% w/w)
External Reserve (US$’billion) 43.17 (+0.11% ytd)
GDP % (Q4 2018) +1.81% (Q2 2018: +1.50% y/y)
NSE All Share Index (ASI) 31,529.92 (+2.92% w/w; +0.32% ytd)
Market Capitalisation (₦’Trillion) 11.76


Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
MCNICHOLS 0.41 0.08 +24.24%
DANGFLOUR 6.85 1.05 +18.10%
GUARANTY 38.65 4.95 +14.69%
REGALINS 0.25 0.03 +13.64%
AIICO 0.72 0.08 +12.50%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
ROYALEX 0.26 -0.04 -13.33%
GUINEAINS 0.20 -0.03 -13.04%
HMARKINS 0.27 -0.04 -12.90%
CHAMPION 1.62 -0.18 -10.00%
INTERLINK 3.24 -0.36 -10.00%

Nigerian Financial Markets Weekly Update – 08 February 2019 (1)

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.