Financial market update

19 January 2012, Sweetcrude, Lagos – Local and international financial market update.
GLOBAL: the International Monetary Fund (IMF) is proposing to raise its lending capacity by as much as $500 bn to insulate the global economy against Europe’s debt crisis. The IMF is looking at ways to expand the war-chest which currently stands at $385 bn. The Euro zone nations have pledged to contribute $192bn but the US has stated that it has no intention to seek additional resources for the IMF.

INDIA: Indian stocks rose to a six week high after the IMF said it plans to expand its lending resources to counter Europe’s debt crisis. The BSE Sensex advanced 7.5% this month set for its best January since 2001 when it rose 8.9% as foreign funds bought $855 million of stocks erasing last years outflows.

CHINA: China is allowing the nations five biggest banks to increase first quarter lending and weighing a plan to relax capital requirements as economic growth cools. The CBN will let the larger lenders increase new loans by a maximum of about 5% from an year earlier.

NIGERIA: The Governor of the CBN has said that the Monetary Policy Rate may remain unchanged after a general increase in the prices of commodities. Sanusi, who declared that he was not speaking for the Monetary Policy Committee, said it might be “counterproductive” to raise interest rates in response to the jump in fuel prices that would probably push up inflation in the country. December inflation dropped to 10.30% from 10.50% in November.

Bonds – Some light demand filtering into the market yesterday seeing yields down across the curve an average 10bps. With the FAAC funds coming in we might continue to see a little buying pressure.

Bills – The demand spread to the longer dated maturities yesterday as rates dipped about 40bps on average as liquidity continues to return to the markets. Next Wednesday’s auction has been shifted to Thursday to allow for the facilitation of the Bond auction.

Money Market – OBB & unsecured rates are 14.00% & 14.50% respectively, liquidity opened up N73billion today though the FAAC flows are expected in before the week’s end as N559bio has been approved to be shared between the states. ”

WDAS : CBN offered & sold $250mio, lowest intervention rate is 158.4185 (1% inclusive) representing 15kobo depreciation from last auction.

                             Hi                   Low              Close            Prev.Close
USD/NGN      162.57/67        161,30/40      161.45/55       162.60/70

NIBOR(%)                       LIBOR (%)
O/N              14.0833      USD 1 month
7 Day            14.4583      USD 2 month
30 Day         15.1250       USD 3 month
60 Day         15.5417       USD 6 month
90 Day         15.8750      USD 12 month
Y/Y Consumer Inflation November 2011 :           10.50%
FX Reserves: 4 January 2012                  (USD bn) 33.09
MPR                                                                              12.00%
Source: FMD and CBN

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