Financial market update

6 December 2011, Sweetcrude, Lagos – Local and international financial market update.
· EUROPE – Angela Merkel and Nicolas Sarkozy strengthened their push for new rules to tighten euro area economic cooperation after Standard & Poor’s said it may downgrade credit ratings across the region. Germany and France risk losing their AAA ratings in a review of 15 euro nations for possible downgrades.

· CHINA – China’s stocks fell sending the benchmark index to its lowest level since March 2009 on concern a property slowdown will hurt growth and after S&P put 15 European nations on a ratings watch.

· ASIA – Asian Development Bank states that Asia may face much greater downside risk on the possibility of a US recession and an unstable Euro zone.

· Strong indications emerged at the weekend that the House of Representatives Committee on Capital Markets and Institution was planning to partner the SEC and the NSE, in its efforts to woo multinational telecommunications (telcos), oil and gas companies, operating in the country to list on the Exchange. The absence of the major players in the nation’s economy from the Exchange is said to be one of the reasons, the market is not as attractive to foreign investors.

· Bonds – Bearish to open on Monday but yields quickly retraced to close just below the open. Activity will likely slow in the run up to the end of the year unless we see some players trying to position into next year. The last auctions for the year comes up next week after which the market will likely slow down ahead of the year end.

· Bills – With yet another N150billion in OMO bills on offer on Monday, the market sold lightly with most of the demand for bills feeding into the OMO auctions which are closing between 16.00-16.40%.

· Money Market – With the FAAC flows hitting the system on Monday, OBB dipped 100bps to 14% while unsecured rates dipped about 300bps to close at 16.00%. The CBN who has been trying to suck out liquidity since last week continued again today offering OMO bills of N150billion.

· NGN: CBN offered and sold $200mio, total demand was $229.14mio. lowest successful bid was at 158.0650 [inc. the 1% commission] signifying 19 points depreciation against the previous auction.


                              HI          Low          Close          Prev.Close

USD/NGN     161.55/65   161.15/25   161.20/30   161.35/45

NIBOR (%)                        LIBOR (%)
O/N             15.9170          USD 1 month           0.2741
7 Day           16.1250          USD 2 month          0.3917
30 Day        16.6250         USD 3 month           0.5339
60 Day        17.0000        USD 6 month           0.7543
90 Day        17.2500         USD 12 month         1.0740
Y/Y Consumer Inflation Oct 2011 :                     10.50%
FX Reserves: 24 November 2011           (USD bn) 33.06
MPR                                                                           12.00%

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