Financial market update

17 November 2011, Sweetcrude, Lagos – Local and international financial market update:
· USA – The USD fell against most of its 16 major counterparts before Federal Reserve Bank of New York President William Dudley speaks today amid speculation the US recovery isn’t fast enough to deter further monetary easing. Interest rate increases seem to be nowhere in sight as the employment levels are not moving as fast as the FED would like it to.

· INDIA – India’s food inflation slowed to a four week low as the cost of onions and wheat declined. Index measuring wholesale prices of agricultural products gained 10.63% in the week ending Nov 5 YoY. After 13 interest rate hikes, the RBI signalled last month that it may be nearing the end of monetary tightening.

· CHINA – China the largest foreign lender to the US boosted its longer term US Treasury holdings in September by the most since March 2010. They purchased USD20.7bn of US government notes and bonds, raising its total long term holdings to USD1.14 trillion. Overall, China’s holdings of US treasuries climbed 1.0% to USD1.15 trillion. The largest monthly increase since October 2010

· About $67 billion (N10.6trillion) would be required to fix Nigeria’s infrastructural deficit in the next four years. Minister of Finance, Dr. Ngozi Okonjo-Iweala, who disclosed this yesterday at the opening session of the Africa Regional Public- Private Partnership (PPP) Conference in Lagos, said the funds would be used to upgrade roads, fix bridges, channeled to the energy sector, the ports, hospitals and schools. The Information Technology sector also needs more investment among others, to create jobs and attract foreign direct investment

· Bonds – Auction day yesterday which translated into cautious and light trading and somewhat of a selloff in the market. The yield curve continues to be kinked especially on the expectation of 18/19% levels on the primary issues of the 7 & 8 year being offered.

· Bills – Most of the activity was concentrated around the longer dated maturities yesterday. A slight sell off seeing rates up between 15-20bps. Some selling also on the short dated Dec 11 bills which went up 30bps on the day.

· CBN offered $250mio and sold $333.82mio against a demand of $333.82mio, lowest intervention rate 156.0450(1% inclusive), maintaining the rate at the last auction.


                                  Hi                Low              Close                  Prev.Close

USD/NGN    159.40/50      157.80/90      158.70/80        157.30/40

NIBOR%                                           LIBOR (%)
O/N                          15.20830            USD 1 month           0.25170
7 Day                        15.75000            USD 2 month           0.35710
30 Day                     16.33330            USD 3 month           0.47110
60 Day                     16.66670            USD 6 month           0.67690
90 Day                     17.04170            USD 12 month          0.99700
Y/Y Consumer Inflation Oct 2011 :                                        10.50%
FX Reserves: 15 November 2011                           (USD bn) 33.01
MPR                                                                                             12.00%
Source: FMD and CBN

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