Nigerian Financial Markets Weekly

Nigerian Financial Markets Weekly

Nigerian Markets

Key Events this week:

Global equities market appreciated week-on-week, with most benchmark indices gaining ca +0.50% to +4.50% this week. This came after the release of the minutes of the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve Bank (Fed) meeting held in January, further emphasizing the Fed’s current dovish monetary stance and indication of a possible halt to the reduction of its current asset holding of ca $3.8 trillion government treasuries before the end of 2019. This also comes despite the release of weak economic data with the Philadelphia Federal Reserve business index dropping to negative at -4.1pts, its lowest since May 2016, IHS Markit manufacturing purchasing managers’ index dropping to a 17-months low at 53.7 in February and the Conference Board’s leading economic index declined for a 2nd consecutive month, its first since 2016.

We expect the release of weak U.S. economic data and increasing expectation of a negative impact on the U.S. economic growth for 2019 to further dampen investors’ expectation of global growth in 2019. We also expect this to keep the U.S. Federal Reserve Bank on the watch to maintain its current dovish monetary stance for a longer period in 2019.

Other Events this week included:

  • Global crude oil prices also rallied to its highest since November 2018 and new year-to-date high this week, with Brent crude oil price rising to ca $67.20 per barrel on Friday. This can be attributed to continued investors’ optimism of a positive outcome to the U.S/China trade negotiations, with the expectation of an extension to the 01 March deadline for a deal to be reached. We expect current optimistic sentiments of U.S./China trade negotiations to keep investors’ interest in risk assets of developed economies higher vs Q4 2018, and on the back of rising expectation of continued dovish monetary policy stance by the U.S. Federal Reserve Bank for a better part of 2019.
  • Trading activities in Nigeria’s fixed income markets declined to its lowest in 2019 on Monday, with only ca ₦73 billion worth of trades vs ₦381 billion averaged daily year-to-date. This comes on the back of the postponement of the nation’s general elections the week-end before, by 1 week and can be attributed to a gradual rise in political uncertainties. However, sell-offs was more evident in the nation’s equities market, with highly capitalized equities declining week-on-week and the Nigerian Stock Exchange All Share Index losing ca -0.61% week-on-week. We expect subdued reaction by investors to the political uncertainties, supported by Brent crude oil price at its highest in 2019 at ca $67.20 per barrel and on better than expected GDP and inflation data released by the Nigerian Bureau of Statistics last week.




Liquidity in the banking system opened the week positive at ca ₦65bn. Inflows of ca ₦578bn from maturing Open Market Operations (OMO) treasury bills on Thursday improved system liquidity with the Central Bank of Nigeria (CBN) conducting 2 OMO auctions on either side of a bond’s primary market auction. System liquidity was expected to open the last trading day of the week on a negative note after debits for both bonds and OMO auctions.

Treasury Bills

A very bullish trading week in the treasury bills market for a 3rd consecutive week, particularly after the no-sale on the first Open Market Operations (OMO) in the week and improved banking system liquidity from inflow maturing OM treasury bills. The Central Bank (CBN) conducted another OMO auction on Thursday to tighten system liquidity, takin out ca ₦688bn. Average rates declined ca -52bps week-on-week. Please find below the summary of the OMO auctions held this week:

Open Market Operations (OMO) – 18 February 2019
Tenor 101-Days 178-Days 353-Days
Maturity Date: 30-May-19 15-Aug-19 06-Feb-20
Amount Offered: ₦ 5.00 billion 10.00 billion  15.00 billion
Subscription: ₦ 3.15 billion  10.57 billion  114.05 billion
Amount Allotted: No sale No sale No sale
Range of bids: 11.9000% – 11.9000% 13.5000% – 15.0000% 15.0000% – 15.0000%
Stop Rates Nil Nil Nil


Open Market Operations (OMO) – 21 February 2019
Tenor 98-Days 189-Days 364-Days
Maturity Date: 30-May-19 28-Aug-19 20-Feb-20
Amount Offered: ₦ 50.00 billion  100.00 billion  400.00 billion
Subscription: ₦ 7.91 billion  53.06 billion  725.61 billion
Amount Allotted: ₦ 7.91 billion  53.06 billion   627.22 billion
Range of bids: 11.9000% – 11.9000% 13.5000% – 15.0000% 14.980% – 15.0000%
Stop Rates 11.9000% 13.5000% 15.0000%


Bank Placements

Open Buy back (OBB) and Overnight (O/N) rates closed at 18.83% and 20.25% from 15.83% and 17.50% 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.


Continued demand was seen in the bonds secondary market this week, with activities still at the mid-to-long end of the curve. Average yield lost -4bps week-on-week, particularly the July 2034 maturity which lost -32bps week-on-week. Please find below the summary of the results of the primary market auction (PMA) held this week:


1 20-Feb-19 27-Apr-23 ₦ 50.00 billion ₦ 1.50 billion 14.52000%
2 20-Feb-19 21-Mar-25 ₦ 50.00 billion ₦ 28.85 billion 14.7999%
3 20-Feb-19 28-Feb-28 ₦ 50.00 billion ₦ 136.25 billion 14.9390%



The equities market declined week-on-week, after 2 consecutive weeks of gains, on sell-offs by investors after the postponement of the general elections last week. The Nigerian Stock Exchange All Share Index (NSE ASI) lost -0.61% week-on-week to close at 32,515.52pts, with market’s year-to-date returns at +3.45%. This was largely attributed to price decline in Dangote Cement Plc (-0.82%) and Nigerian Breweries Plc (-3.61%).

The Naira depreciated further against the dollar at the interbank market window, at ₦306.80/$1 from ₦306.75/$1. At the parallel market, the Naira appreciated against the U.S. Dollar, Pound Sterling and Euro at ₦360/$1, ₦470/₤1 and ₦408/€1 from ₦362/$1, ₦472/₤1 and ₦410/€1, respectively. The Naira also appreciated week-on-week at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.44/$1 from ₦361.54/$1.

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
21-Mar-19 27 9.50% 9.57%
09-May-19 76 11.35% 11.62%
01-Aug-19 160 11.95% 12.61%
07-Nov-19 258 14.25% 15.85%


Select Macro-economic Indices
Inflation % (December 2018) 11.44 (-25.57% ytd)
PMI (January 2019) 58.50
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 67.18 (+2.46% w/w)
External Reserve (US$’billion) 42.69 (-0.93% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 32,515.52 (-0.61% w/w; +3.45% ytd)
Market Capitalisation (₦’Trillion) 12.13


Top 5 Equitiy Advancers
Name (Symbol) Close(N) Gain(N) % Change
JAPAULOIL 0.25 0.05 +25.00%
ABCTRANS 0.52 0.10 +23.81%
IKEJAHOTL 2.13 0.32 +17.68%
PRESCO 75.00 9.00 +13.64%
MCNICHOL 0.51 0.06 +13.33%
Top 5 Equity Decliners
Name (Symbol) Close(N) Gain(N) % Change
LIVESTOCK 0.58 -0.14 -19.44%
WEMABANK 0.84 -0.19 -18.45%
VITAFOAM 4.00 -0.78 -16.32%
TRANSCORP 1.45 -0.26 -15.20%
UNITYBANK 0.99 -0.15 -13.16%

Nigerian Financial Markets Weekly Update – 22 February 2019

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