Financial market update

9 December 2011, Sweetcrude, Lagos – Local and international financial market update.

· JAPAN – Japanese stocks fell, sending the Nikkei 225 Stock Average to its biggest drop in two weeks, after the European Central Bank damped speculation it would step up debt purchases.

· EUROPE – European leaders added 200 billion Euros (US$267 billion) to their crisis-fighting warchest and tightened anti-deficit rules, seeking to lure the European Central Bank into stepping up its rescue operations. In an accord hailed by ECB President Mario Draghi, the leaders outlined a “fiscal compact” to prevent future debt run-ups, accelerated the start of a planned 500 billion-euro rescue fund and watered down bondholder loss-sharing provisions.

· CHINA – China’s inflation reached a 14-month low and industrial production rose less than forecast, bolstering the case for more stimulus measure to shore up growth in the world’s second largest economy. Consumer prices also rose 4.2 percent from a year earlier. Output gained 12.4 percent, the least since August 2009.

· Economic / Central Bank News
The Debt Management Office has said that the N3.14tn bonds offered by the Asset Management Corporation of Nigeria’s, which will mature in 2011 through 2013, have inherent refinancing risks. [Punch Newspaper]

· Bonds – Market activity continues to thin out in the absence of any major flows of developments. The last auction for the year comes up next Wednesday after which liquidity will likely dry out until the New Year. Some light selling across the shorter end of the curve in reaction to the one year bill at 16.40% at last Wednesday’s primary auction.

· Bills – Very volatile session yesterday. With a few investors losing out on the short end at the auction the demand fed into the secondary market pulling rates down about 40-50bps. The reverse was the case for the longer dated maturities which were sold as the one year surprised at the auction.

· Money Market – OBB and unsecured rates stable today at 14.50% and 16.50% respectively.”


                           Hi                     Low                Close                Prev.Close

USD/NGN   162.50/60          161.68/78          162.00/10          161.67/77

NIBOR(%)                                    LIBOR (%)
O/N                16.4167                 USD 1 month         0.2763
7 Day              16.7083                USD 2 month         0.3964
30 Day           16.9583                USD 3 month         0.5400
60 Day           17.2083                USD 6 month         0.7605
90 Day           17.4583                 USD 12 month       1.0822
Y/Y Consumer Inflation Oct 2011 :                              10.50%
FX Reserves: 2 December 2011                     (USD bn) 32.99
MPR                                                                                    12.00%
Source: CBN & FMD

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