Nigerian Financial Markets Weekly

Nigerian Financial Markets Weekly

Nigerian Markets

Key Events this week:

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) concluded its first policy meeting of 2019 on Tuesday, retaining all key policy rates for a 16th consecutive time. The MPC retained the Monetary Policy Rate (MPR), Cash Reserve Ratio (CRR) and Liquidity ratio at 14%, 22.5% and 30% respectively while maintaining an asymmetric corridor at +200/–500 basis points around the MPR. Key considerations of the Committee included an expectation of ca 2.28% growth in GDP for 2019, convergence of FX exchange rates in the Investors and Exporters FX (I & E FX) and Bureau De Change (BDCs) windows and gradual accumulation of the FX reserves.

We expect Nigeria’s Central Bank (CBN) to maintain its current tight liquidity stance with multiple conduct of Open Market Operations (OMO) auctions to keep banking system liquidity significantly low, while continuing its FX intervention in all segments of the current multiple FX windows in a bid to maintain FX stability as we approach the 16 February presidential election date.

Other Events this week included:

  • The Debt Management Office (DMO) on Wednesday, released the Q1 2019 bonds issuance calendar, indicating ca 22% quarter-on-quarter rise in total debt offering at ₦440 billion vs ₦360 billion in Q4 2018, and ca 230% higher than ₦133.34 billion sold in Q4 2018. It also shows an increased monthly total offering of ₦165 billion for both January and February respectively, and ₦100 billion for March at the 3-years, 5-years and 10-years maturity brackets, with the April 2023, March 2025 and February 2028 maturities been re-issued. With the continued omission of the 20-year maturity in its debt issuance calendar for a 5th consecutive quarter, we expect the government to maintain its preference for long tenored foreign borrowings in 2019 at single digit cost vs long tenored local borrowings at double digits cost.
  • The European Central Bank (ECB) on Thursday, ended its first monetary policy meeting in 2019 keeping its benchmark refinancing rate unchanged at record low level of 0%, since March 2016 and reiterated it will maintain key interest rates at current till end of Q3 2019. This comes after the Eurozone’s Apex bank ended its record high 2.6 trillion Euros (ca $2.94 trillion) Quantitative Easing (QE) stimulus programme in December 2018, with growth outlook in the Eurozone area expected to be significantly subdued in 2019. With the persisting uncertainties and threat of protectionism, vulnerabilities in emerging markets and increasing financial markets volatility, we expect the U.S. Federal Reserve to maintain its benchmark interest rate at 2.25% – 2.50% at the end of its first meeting in 2019 next week, in line with the ECB.
  • Global financial markets turned sharply volatile this week, after Monday’s release of the Chinese Q4 2018 economic data which indicated its weakest growth since 1990 and marked 3 consecutive quarters of economic slowdown in China. GDP growth rate dropped to 6.4% year-on-year (y/y) vs 6.5% y/y in Q3 2018 and further increased investors’ fears of a global economic slowdown in 2019, with the International Monetary Fund (IMF) forecasting a slower global growth of 3.5% y/y vs 3.7% y/y previously forecasted in October 2018. We expect continued volatility in global financial markets in 2019, on rising expectation of a slowdown in global growth and continued monetary normalization in developed economies.




Banking system liquidity opened the week on a positive note, at ca ₦275.35bn. Inflows of ca ₦381.54bn from maturing Open Market Operations (OMO) treasury bills on Thursday further eased banking system liquidity, with the Central Bank of Nigeria (CBN) conducting 5 OMO auctions and a Special OMO sale. System liquidity opened the last trading day of the week still positive at ca ₦86.43bn.

Treasury Bills

A bullish week in the treasury bills market, with demand seen across the curve, particularly on short-dated maturities, while the Central Bank (CBN) conducted 5 Open Market Operations (OMO) auction and a Special OMO sale to reduce system liquidity. Average rates dropped ca -45bps. Please find below the summary of the OMO auctions and Special OMO sales held this week:

Open Market Operations (OMO) – 21 January 2019
Tenor 94-Days 178-Days 353-Days
Maturity Date: 25-Apr-19 18-Jul-19 09-Jan-20
Amount Offered: ₦ 50.00 billion 100.00 billion  200.00 billion
Subscription: ₦ 12.630 billion  27.370 billion  139.600 billion
Amount Allotted: ₦ 12.630 billion  27.370 billion  139.600 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) – 22 January 2019
Tenor 93-Days 191-Days 345-Days
Maturity Date: 25-Apr-19 01-Aug-19 02-Jan-20
Amount Offered: ₦ 20.00 billion  30.00 billion  150.00 billion
Subscription: ₦ 0.20 billion  7.030 billion  53.480 billion
Amount Allotted: ₦ 0.20 billion  7.030 billion  53.480 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) – 23 January 2019
Tenor 92-Days 176-Days 330-Days
Maturity Date: 25-Apr-19 18-Jul-19 19-Dec-19
Amount Offered: ₦ 20.00 billion  30.00 billion  100.00 billion
Subscription: ₦ 1.61 billion  13.18 billion  49.98 billion
Amount Allotted: ₦ 1.61 billion  13.18 billion  49.98 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) – 24 January 2019
Tenor 91-Days 182-Days 364-Days
Maturity Date: 25-Apr-19 25-Jul-19 23-Jan-19
Amount Offered: ₦ 30.00 billion  70.00 billion  350.00 billion
Subscription: ₦ 6.06 billion  18.38 billion  335.21 billion
Amount Allotted: ₦ 6.06 billion  18.38 billion  335.21 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 364-Days Special OMO
Maturity Date: 23-Jan-20
Total Sale(₦) 50.24 billion
Stop Rate(%) 15.0000%


Open Market Operations (OMO) – 25 January 2019
Tenor 90-Days 195-Days 342-Days
Maturity Date: 25-Apr-19 08-Aug-19 02-Jan-20
Amount Offered: ₦ 20.00 billion  30.00 billion  100.00 billion
Subscription: ₦ 1.11 billion  20.16 billion  50.27 billion
Amount Allotted: ₦ 1.11 billion  20.16 billion  50.27 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 12.08% and 12.33% from 15.33% and 16.17% 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 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.


A relatively quiet trading week in the bonds secondary market, with activities only improving after the release of Q1 bonds issuance calendar and January bonds issuance circular, indicating a total of ₦150 billion. Average yield gained ca +3bps week-on-week.


The equities market gained this week, as the Nigerian Stock Exchange All Share Index (NSE ASI) appreciated +1.36% week-on-week to close at 31,426.63pts, with market’s year-to-date returns at -0.01%. This was largely attributed to price gains in Guaranty Trust Bank Plc (+7.98%) and Zenith Bank Plc (+6.98%). The NSE Banking index gained ca +715bps while the NSE Consumer Goods, Oil & Gas and Industrial indices lost ca -41bps, -132bps and -202bps respectively.

During the week, the Naira appreciated at the interbank market window at ₦306.80/$1 from ₦306.85/$1. At the parallel market, the Naira remained stable against the US Dollar, Pound Sterling and Euro at ₦362/$1, ₦464/₤1 and ₦411/€1. The Naira appreciated week-on-week at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.12/$1 from ₦362.33/$1.

AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.00% 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 21 11.20% 11.27%
21-Mar-19 56 10.35% 10.52%
01-Aug-19 189 12.95% 13.88%
07-Nov-19 287 14.35% 16.18%


Select Macro-economic Indices
Inflation % (December 2018) 11.44 (-25.57% ytd)
PMI (December 2018) 61.10
MPR (%) 14 (-5/+2 around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 61.35 (-2.15% w/w)
External Reserve (US$’billion) 43.11 (+0.01% ytd)
GDP % (Q3 2018) +1.81% (Q2 2018: +1.50% y/y)
NSE All Share Index (ASI) 31,426.63 (+1.36% w/w; -0.01% ytd)
Market Capitalisation (₦’Trillion) 11.72


Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
FIDELITYBK 2.50 0.49 +24.38%
CAVERTON 2.33 0.43 +22.63%
FCMB 2.15 0.39 +22.16%
ACCESS 6.50 0.90 +16.07%
ROYALEX 0.31 0.04 +14.81%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
RESORTSAL 0.20 -0.06 -23.08%
SOVRENINS 0.21 -0.05 -19.23%
MEDVIEW 1.85 -0.20 -9.75%
MCNICHOLS 0.39 -0.04 -9.30%
UBN 6.15 -0.60 -8.89%

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