Financial Markets Today
Global crude oil prices rose to their highest in 2019 today and ending Q1 2019 with ca +27% year-to-date gains, with Brent crude oil price recording its best quarter-on-quarter performance since Q2 2009, trading at ca $68.89 per barrel on rising positive sentiments of renewed U.S./China trade negotiations after yesterday’s reports of proposed new trade offers by China to the U.S. Gains recorded was also supported by current output-cuts by the Organisation of Petroleum Exporting Countries (OPEC) with expectation for a further drop in crude oil production from OPEC in April, its 4th consecutive month-on-month output-cut in 2019 and on expectation of significant fall in April’s export from OPEC’s largest crude oil producer – Saudi Arabia, with export expected to drop to ca 7 million barrels per day vs previous 10 million barrels per day.
We expect current positive sentiments on global crude oil prices to be sustained in the near term, on rising expectation of a trade deal to be reached between the U.S. and China, supporting economic activities in the world’s largest economies, despite rising fears of a global economic slowdown in 2019.
MONEY MARKETS
CAPITAL MARKETS
FOREIGN EXCHANGE
COMMODITIES
Banking system liquidity opened on a positive note today, at ca ₦401.438bn from previous day’s opening of ₦148.785bn. There was no Open Market Operation (OMO) auction today by the Central Bank of Nigeria (CBN).
Treasury Bills
Trading activities in the treasury bills secondary market improved today on increased liquidity in the interbank market. Most of today’s activities was seen at the long end of the curve, with average rates gaining ca +6bps day-on-day. The 23 January 2020 maturity traded the most to close at 12.90%.
Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 9.86% and 10.67% from 10.07% and 10.71%, respectively. 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 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
Bonds
The bonds secondary market ended the week on a quiet note with yields gaining an average of ca +2bps day-on-day. Most of the activities were at the long-end of the curve with February 2028 trading the most to close at 14.40% from 14.14%..
Eurobonds
Renewed demand for the nation’s debt instruments in the Eurobonds market drove yield levels lower. Average yields shed ca -19bps day-onday, particularly the January 2021 maturity which closed at 5.17% from 4.97%.
Equities
The Nigerian equities market appreciated today, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.67% day-on-day to close at 31,041.42pts, and market’s year-to-date returns at -1.24%. This was largely on the back of gains in Seplat Petroleum Development Company (+9.26%) and Nestle Nigeria Plc (+5.48%).
The NSE Industrial, Oil & Gas and Consumer Goods indices gained +18bps, +484bps and +230bps respectively, while the NSE Banking indices lost ca -108bps. Fidelity Bank Plc led the volume chart with 58.1m units while United Bank for Africa led the value chart at ₦280m.
The Naira remained stable against the dollar in both the interbank and parallel markets today, at ₦306.95/$1 and ₦360/$1 respectively. It was also unchanged against the Pound sterling and Euro in the parallel market at ₦475/₤1 and ₦406/€1 respectively, while it gained at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.47/$1 from ₦360.39/$1.
Brent crude oil prices gained today, closing the quarter with a gain of ca +27% year-to-date on the back of announcement of renewed trade negotiations between U.S. and China. Brent crude oil price gained ca +0.86% at $68.40pb, while WTI gained ca +1.35% at $60.10pb, as at report time. Spot gold gained ca +0.19% to $1,297.70 per ounce.
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| Benchmark T-Bills Discount Rates | ||||
| 29-Mar-19 | 28-Mar-19 | Change in Rates | ||
| 69Days . | 12.19% | 12.03% | -0.20% | |
| 160Days | 13.09% | 13.15% | -0.22% | |
| 335Days. | 12.86% | 12.76% | -0.06% | |
| Source: FMDQ DQL for 29 March 2019 *T-Bills Discount Rates are slightly different from current market rates |
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| Benchmark FGN Bond Yields | ||||
| 29-Mar-19 | 28-Mar-19 | Change in Yield | ||
| 3 yrs: 16.00% 15-Jul-2021 | 14.05% | 14.06% | -0.01% | |
| 5 yrs: 15.54% 27-Apr 2023 | 14.23% | 13.81% | 0.42% | |
| 10 yrs: 16.29% 17 Mar 2027 | 14.25% | 14.14% | 0.11% | |
| 20 yrs: 16.25% 18-Apr 2037 . | 14.18% | 14.16% | 0.02% | |
| Source: FMDQ DQL for 29 March 2019 | ||||
| Benchmark FGN EuroBond Yields | ||||
| 29-Mar-19 | 28-Mar-19 | Change in Yield | ||
| 3 yrs: NGERIA 6 3/4 01/28/21 | 4.97% | 5.17% | -0.02% | |
| 5 yrs: NGERIA 6 3/8 07/12/23 | 5.53% | 5.69% | -0.16% | |
| 10 yrs: NGERIA 6 1/2 11/28/27 | 6.70% | 6.89% | -0.19% | |
| 20 yrs: NGERIA 7.696 02/23/38 | 7.79% | 7.99% | -0.20% | |
| 30 yrs: NGERIA 9.248 01/21/49 | 8.26% | 8.49% | -0.23% | |
| Source: FMDQ DQL for 29 March 2019 | ||||
| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 14.02% 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 |
| 01-Aug-19 | 125 | 11.15% | 12.03% |
| 17-Oct-19 | 202 | 12.70% | 13.66% |
| 07-Nov-19 | 223 | 12.65% | 13.71% |
| 16-Jan-20 | 293 | 12.65% | 14.08% |
| Select Macro-economic Indices | |
| Inflation % (February 2019) | 11.31 (-1.14% ytd) |
| PMI (March 2019) | 57.40 |
| MPR (%) | 14 (-5%/+2% around mid-point) |
| CRR (%) | 22.5 |
| Brent Crude Price US$ pbbl | 68.40 (-0.86% d/d) |
| External Reserve (US$’billion) | 44.04 (+2.14% ytd) |
| GDP % (Q4 2018) | +2.38% (Q3 2018: +1.81% y/y) |
| NSE All Share Index (ASI) | 31,041.42 (+0.67% d/d; -1.24% ytd) |
| Market Capitalisation (₦’Trillion) | 11.67 |
Financial Markets Update – 29 March 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.
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