Financial market update

15 February 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Poverty in Nigeria is rising, with 112 million (60.9% of the 163 million population poor, despite 7.6 gross domestic product (GDP) growth recorded in Africa’s second largest economy in 2011, data from National Bureau of Statistics showed on Monday. The percentage of Nigerians living in abject poverty – those who can afford only the bare essentials of food, shelter and clothing – rose to 60.9 percent in 2010. [BUSINESSDAY]

US: U.S. stocks declined, pulling benchmark indexes down from near three-year highs, and Treasuries advanced as slower-than-forecast growth in retail sales damped optimism about the economy. The Standard & Poor’s 500 Index lost 0.4 percent to 1,346.9 at 12:46 p.m. on Tuesday in New York

INDIA: India’s rupee weakened for the first time in three days after Moody’s Investors Service cut debt ratings for six European nations, damping demand for riskier assets. The rupee declined 0.4 percent to 49.3681 per dollar in Mumbai, according to data compiled by Bloomberg.

EUROPE: European officials jacked up the pressure on the Greek government to deliver budget cuts in exchange for a second bailout, while insisting that default is not an option. Two years after pledging to pull Greece back from the brink, European leaders are torn between pouring more aid into the slumping economy or risking an unprecedented national bankruptcy that might force the country out of the euro and prompt renewed tumult in European markets.

Bonds – With the DMO postponing this month’s bond auction the market turned bullish yesterday. Yields dipped across the whole curve, the long end came off about 30bps while the short to medium end dipped an average 20bps. we can expect a lot of volatility going forward as the uncertainty will make rate direct quite uncertain in the very short term.

Bills – Bullish in the markets yesterday, the last 364day bill was listed in trading, and it opened at 19.54% and came off 56bps to close the day at 18.98% which is 133bps down from where it was originally issued.

Money Market – OBB & unsecured rates stable yesterday at 14.00% & 15.50% respectively as liquidity remains thin.

                              Hi                   Low                 Close              Prev.Close
USD/NGN     159.00/10     158.26/36   158.50/60   159.05/15

NIBOR(%)                       LIBOR (%)
O/N                 14.5833    USD 1 month               0.2475
7 Day             14.9750    USD 2 month               0.3640
30 Day          15.6467     USD 3 month               0.4976
60 Day          16.0333     USD 6 month               0.7536
90 Day          16.4167     USD 12 month             1.0676
Y/Y Consumer Inflation December 2011 :       10.30%
FX Reserves: 14 February 2012          (USD bn) 35.036
MPR                                                                                   12.00%
Source: FMD and CBN

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