All of us at AIICO Capital wish you all the Happiness in the New Year.
Global financial markets enjoyed a 2nd consecutive positive trading day, after yesterday’s dovish tone of the U.S. Federal Reserve Bank in pledging to be patient in raising its benchmark interest rate further, while maintaining it at 2.25% – 2.50% at the close of its meeting. Most benchmark equity indices gained day-on-day as the price of Gold rose to its highest since April 2018, further lifting the gains recorded in the month of January. Benchmark equity indices gained day-on-day, with the U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ and FTSE all gaining ca +0.16%, +0.86%, +1.37% and +0.39% respectively, to close the month of January 2019 with gains of +7.06%, +7.70%, +9.79% and +3.58% respectively. Global commodity prices also appreciated month-on-month, with both Brent crude oil price and Gold gaining ca +15% and +3.44% respectively.
We expect the U.S. Federal Reserve Bank (Fed) to maintain its current dovish monetary stance in the near term, on the back of possible slowdown in economic growth in the U.S. in 2019. We also expect other Central Banks of developed economies to take a cue from the hold-off stance of the U.S. Fed and keep monetary policies unchanged in the near term.
Banking system liquidity opened on a positive note today, at ca ₦541.68bn. There was an Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN) today, in line with its current tight monetary stance.
A very bullish trading day in the treasury bills secondary market, with demand seen at the short end of the curve. Average rate lost ca -20ps day-on-day, with the 07 February and 07 March 2019 maturities trading the most to close at 13.64% and 11.71%. Pease find below a summary of the results of today’s Primary Market (PMA) auction:
|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%|
Open Buy Back (OBB) and Overnight (O/N) rates rose to 10.29% and 11.36% from 3.83% and 4.50%. 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.
A relatively active day in the bonds secondary market today, with activities focused on the February 2028 maturity. Average yields declined ca -8bps day-on-day, with the February 2028 maturity trading the most to close at 15.20% from 15.39%.
The Nigerian equities market declined for a 4th consecutive trading day, largely due to price depreciation in highly capitalized stocks as Dangote Cement Plc (-2.06%), Guaranty Trust Bank Plc (-1.62%), Nigerian Breweries Plc (-5.13%), Zenith Ban Plc (-2.17%) and Stanbic IBTC Holdings Plc (-3.83%). This pulled own the Nigerian Stock Exchange All Share Index (NSE ASI) which lost ca -1.89% day-on-day to close at 30,557.20pts, with market’s year-to-date returns at -2.78%.
The NSE Banking, Oil & Gas and Industrial indices gained ca +10bps, +140bps and +23bps day-on-day, while the NSE Consumer Goods index declined -76bps. United Bank for Africa Plc led both the volume and value charts with 123.71m units traded at ₦859.28mn.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.75/$1. In the parallel market, it appreciated against the Dollar at ₦361/$1 from ₦363/$1, depreciated against the Pound Sterling at ₦472/₤1 from ₦469/₤1, while remaining stable against the Euro at ₦411/€1. The Naira depreciated further at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.71/$1 from ₦362.68/$1.
Crude oil prices rose for a 3rd consecutive day today, buoyed by continued impact of expected reduced supply from Venezuela on sanctions imposed by the U.S. Brent crude oil price rose ca +0.71% at $62.09pb, while WTI crude also rose ca +1.57% at $55.08pb, as at report time. Spot gold was up ca +0.76% day-on-day at $1,325.70 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.15% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (December 2018)||11.44 (-25.57% ytd)|
|PMI (December 2018)||61.10|
|MPR (%)||14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||62.09 (+0.71% d/d)|
|External Reserve (US$’billion)||43.16 (+0.11% ytd)|
|GDP % (Q3 2018)||+1.81% (Q2 2018: +1.50% y/y)|
|NSE All Share Index (ASI)||30,557.20 (-1.89% d/d; -2.78% ytd)|
|Market Capitalisation (₦’Trillion)||11.39|