Financial market update

07 March 2012, Sweetcrude, Lagos – Local and international financial market update.

NIGERIA: The Treasury Single Account (TSA) project which seeks to establish a unified structure of government bank accounts, could be the single most effective mechanism for dealing with corruption in cash management in ministries and agencies. The initiative is being championed by the Ministry of Finance with the office of the accountant- general of the federation serving as the implementing agency, in active collaboration with the Central Bank. The project is inspired by global best practices long established by countries across the world and has a proven record of enhancing oversight and control of government cash resources.

EUROPE: European stocks declined, with the Stoxx Europe 600 Index dropping the most since November, as a report confirmed a contraction in the euro-area economy and investors weighed Greece’s chances of getting bondholders to accept a debt swap. The Stoxx 600 declined 2.5 percent to 258.92 at 4:30 p.m. in London yesterday.

CHINA: Chinese dollar bonds returned more than 10 percent this year, the most in Asia, as Premier Wen Jiabao outlined measures to deflate the property market without derailing the world’s second-biggest economy. Wen told the annual meeting of parliament that income-tax breaks, wage increases and residency-rule changes will support demand, even as curbs on property investment stay in place.

INDIA: Tata Steel Ltd., India’s biggest producer of the alloy, increased prices for the second consecutive month in March amid improving demand outlook from housing and construction.

07 March 2012, Sweetcrude, Lagos – Local and international financial market update.
Bonds – Yields came off an average 17bps on the long end of the curve as the market finally saw some sizeable positioning with sentiment beginning to emerge that we might have seen the top in terms of yields on government securities for the time being. With the MPC set to meet in two weeks, early indications are that the benchmark will hold and as confidence grows in this regards we will see rates dip slightly.

Bills – The short end was the focus of most market activity yesterday with the 90 day and slightly over bills dipping an average 30bps as the market positions for today’s primary.

Money Market – OBB & unsecured rates were stable at 14.50% & 15.50% respectively, rates back up as liquidity dried up.

                                   Hi              Low              Close           Prev.Close
USD/NGN       157.80/90     158.80/90  157.48/58  157.70/80

 NIBOR(%)                                      LIBOR (%)


O/N  15.2500  USD 1 month  0.2428 
7 Day  15.6250  USD 2 month  0.3520 
30 Day  16.0833  USD 3 month  0.4746 
60 Day  16.3750  USD 4 month  0.5839 
90 Day  16.7250  USD 6 month  0.7432 
USD 12 month  1.0544 
Y/Y Consumer Inflation January 2012 :  12.60% 
FX Reserves: 01 March 2012 (USD bn)  34.705 
MPR  12.00% 
Source: FMD and CBN 
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