Yields on Nigeria’s domestic fixed income market dropped to their lowest in 6months today, with the long-end of the yield curve dropping below the 14% mark during trade on a rise in demand for both government bonds. Yields on the nation’s Eurobonds also dropped today, with the 2049 maturity losing ca -7bps. This comes after yesterday’s declaration of current President, Muhammadu Buhari as the winner of the just concluded general elections, with investors expectation of a possible relaxation in current tight monetary policies by the Central Bank (CBN) post elections.
We expect continued demand for the nation’s fixed income risk assets at current levels and in the near term, on investors rising optimism of a continuance in government’s fiscal and monetary policies of the previous 4years, and as Foreign Portfolio Investors (FPIs) source for higher risk adjusted returns in Emerging (EMs) and Frontier (FMs) markets.
Banking system liquidity opened positive today, at ca ₦141.054bn. There was no Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN) today.
A relatively active trading day in the treasury bills secondary market today. Demand was seen particularly at the mid-to-long end of the curve, on expectation of lower stop rates at the primary market auction held today. Average rates dropped ca -45bps day-on-day, with the 19 September maturity trading the most to close at 12.46% from 13.47%. Please find below a summary of the results of the Primary Market Auction (PMA) held today:
|Amount Offered:||₦ 24.372 billion||₦ 38.751 billion||₦ 51.995 billion|
|Subscription:||₦ 40.554 billion||₦ 75.821 billion||₦ 610.978 billion|
|Amount Allotted:||₦ 24.372 billion||₦ 38.751 billion||₦ 51.995 billion|
|Range of bids:||11.4000% – 13.0000%||12.5000% – 14.5000%||14.0000% – 16.0000%|
Open Buy Back (OBB) and Overnight (O/N) rates dropped further to day-on-day to 9.50% and 10.58% from 13.79% and 14.71%. 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.
The bonds secondary market traded on a bullish note today, with buying interest seen across the curve, particularly on the benchmark bonds. Average yield dropped ca -47bps day-on-day, with the February 2028 maturity trading the most to close at 14.36% from 14.52%.
The Nigerian equities market declined further today, with the Nigerian Stock Exchange All Share Index (NSE ASI) losing ca -0.71% day-on-day to close at 32,244.24pts, with market’s year-to-date returns at +2.59%. This was largely due to price gains in Nestle Nigeria Plc (-0.66%), Guaranty Trust Bank Plc (-0.20%) and Zenith Bank Plc (-3.49%).
The NSE Industrial, Oil & Gas, Consumer Goods and Banking indices all lost ca -5bps, -165bps, -66bps and -144bps respectively. Diamond Bank Plc led both the volume and vale charts with 187.43m units traded at ₦466.65mn.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.85/$1. In the parallel market, it remained stable against the Dollar, Pound Sterling and Euro at ₦360/$1, ₦470/₤1 and ₦408/€1 day-on-day, respectively. The Naira appreciated further at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.21/$1 from ₦361.46/$1.
Crude oil prices rose today, on the back of continued optimism of support to crude prices of output-cut by the Organisation of Petroleum Exporting Countries (OPEC) and as data from the Energy Information Administration (EIA) indicated a drop of ca 8.6 million barrels in U.S. Stockpiles last week. Brent crude oil price gained ca +1.95% at $66.48pb, while WTI crude gained ca +3.12% at $57.23pb, as at report time. Spot gold lost ca -0.51% day-on-day at $1,321.70 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.28% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (January 2019)||11.37 (-0.61% ytd)|
|PMI (January 2019)||58.50|
|MPR (%)||14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||66.48 (+1.95% d/d)|
|External Reserve (US$’billion)||42.33 (-1.82% ytd)|
|GDP % (Q4 2018)||+2.38% (Q3 2018: +1.81% y/y)|
|NSE All Share Index (ASI)||32.244.24 (-0.71% d/d; +2.59% ytd)|
|Market Capitalisation (₦’Trillion)||12.02|