Financial Markets Today

Financial Markets Today

All of us at AIICO Capital wish you all the Happiness in the New Year.

Crude oil prices rose sharply today, with Bent crude oil price rising ca 2% day-on-day at ca $62.06 per barrel as U.S. jobs report for January 2019 released today, indicated an impressive rise of 304,000 month-on-month vs market analyst expectation of 165,000. This comes as a Reuters report indicated a drop of ca 890,000 barrels in crude oil output from the Organisation of Petroleum Exporting Countries (OPEC) in January 2019 at ca 30.98 million barrels per day (mbpd) vs 31.87 mbpd in December 2018, on implementation of the an OPEC led production-cut agreement.

We expect this to have positive impact on investors optimism of risk assets, particularly in developed economies, with the 10yr U.S. treasury yield rising to +2.686%. However, we expect a rise in volatility in global financial markets on expectation of sub-par Q4 2018 and Q1 2019 economic growth in the world’s largest economies and continued uncertainties of current U.S./China trade negotiations.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today, at ca ₦662.17bn. There was no Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
A relatively more active trading day in the treasury bills secondary market, with continued demand seen at the short-end of the curve. Average rate lost ca -27ps day-on-day, with the 07 March 2019 maturity trading the most to close at 11.00% from 11.71%.

Tenor 112-Days 203-Days 364-Days
Maturity Date: 23-May-19 22-Aug-19 30-Jan-20
Amount Offered: ₦ 50.00billion ₦ 150.00billion ₦ 350.00 billion
Subscription: ₦ 82.96billion ₦ 46.62billion ₦270.97 billion
Amount Allotted: ₦ 82.96billion ₦ 46.62billion ₦ 270.97 billion
Range of bids: 11.7500% – 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 rose to 11.07 % and 11.86% from 10.29% and 11.36%. 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.

Bonds
A very active and bullish trading day in the bonds secondary market today, with demand seen across the curve, particularly on mid-dated maturities. Activities remained focused on the February 2028 maturity which dropped to 15.04% and 15.20%. Average yields declined ca -9bps day-on-day.

Equities
The Nigerian equities market appreciated today, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.26% day-on-day to close at 30,pts, with market’s year-to-date returns at -2.78%. This was majorly due to gains in Guaranty Trust Bank Plc (+0.75%), Zenith Ban Plc (+2.00%) and Stanbic IBTC Holdings Plc (+0.22%).

The NSE Banking index gained ca +195bps day-on-day, while the NSE Consumer Goods, Oil & Gas and Industrial indices declined ca -20bps, -42bps and -297bps respectively. Guaranty Trust Bank Plc led both the volume and value charts with 65.22m units traded at ₦2.20bn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.75/$1. In the parallel market, it remained stable against the Dollar, Pound Sterling and Euro at ₦361/$1, ₦472/₤1 and ₦411/€1. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.68/$1 from ₦362.71/$1.

Crude oil prices rose for a 4th consecutive day today, as U.S. jobs data released today indicated a steeper rise 304,000 in payrolls added in January, and on continued impact of U.S. sanctions on Venezuela. Brent crude oil price rose ca +1.94% at $62.02pb, while WTI crude also rose ca +1.62% at $54.66pb, as at report time. Spot gold dropped ca -0.20% day-on-day at $1,322.60 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
UACN 9.20 0.80 +9.52%
FCMB 2.15 0.18 +9.14%
MCNICHOLS 0.36 0.03 +9.09%
FIDELITYBK 2.40 0.20 +9.09%
LASACO 0.31 0.02 +6.90%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
UNIONDAC 0.27 -0.03 -10.00%
CORNERST 0.20 -0.02 -9.09%
SUNUASSUR 0.20 -0.02 -9.09%
CCNN 22.00 -2.00 -8.33%
CHIPLC 0.29 -0.02 -6.45%
Benchmark T-Bills Discount Rates
01-Feb-19 31-Jan-19 Change in Rates
76Days 11.48% 11.48% 0.00%
167Days 12.96% 12.96% 0.00%
314Days 14.79% 14.90% -0.11%
Source: FMDQ DQL for 01 February 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
01-Feb-19 31-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 13.52% 13.63% -0.11%
5 yrs: 15.54% 13-Feb 2020 15.23% 15.22% 0.01%
10 yrs: 16.29% 17 Mar 2027 15.91% 15.18% -0.27%
20 yrs: 16.25% 18-Apr 2037 15.00% 15.09% -0.09%
Source: FMDQ DQL for 01 February 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.15% 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 27 10.90% 10.99%
21-Mar-19 48 9.40% 9.52%
01-Aug-19 181 12.70% 13.55%
07-Nov-19 279 14.45% 16.24%

 

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 62.02 (+1.94% d/d)
External Reserve (US$’billion) 43.17 (+0.11% ytd)
GDP % (Q3 2018) +1.81% (Q2 2018: +1.50% y/y)
NSE All Share Index (ASI) 30,636.36 (+0.26% d/d; -2.53% ytd)
Market Capitalisation (₦’Trillion) 11.42
 Financial Markets Update – 01 February 2019
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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.
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