Financial market update

14 May 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria is planning to set up its own pipeline industry to boost domestic employment and also to enhance GDP, according to the Executive Secretary and CEO of the Nigerian Content Development and Monitoring Board (NCDMB) Ernest Nwapa. The Board is also spearheading the country’s bid to bring more of the local population into the industry and build domestic capacity in line with the terms of the Nigerian Content Act (NCA), which became law in 2010.

EUROPE: Greece’s possible exit from the Euro area moved to the centre of Europe’s debt crisis debate, with officials beginning to weigh the fallout of a withdrawal even as authorities in Athens struggled to form a government. Meetings between the Greek President are set to continue today after Syriza, the largest anti-bailout party rejected a unity government.

INDIA: India’s benchmark bonds advanced the most in more than a week as economists predicted the government will report today the slowest inflation since November 2009. Yields on the most traded debt due 2021 fell as a decline n the costs of crude oil to a five month low added to optimism consumer price gains will decelerate. Yield on this bonds stands at around 8.54 as of this morning in Mumbai.

CHINA: China’s stocks rose the most in a week on speculation the central bank will ease monetary policy to bolster the economy after cutting lenders’ reserve requirements for a third time since November.

Bonds – Market closed on Friday with Flat yield curve maintained, trend to be sustained into the new week until after the auction.

Bills – Friday saw an early bullish run recorded on the long dated bills despite the new listing of the new 1yr t-bill, the 182dy bill corrected towards midday after been sold up 50bps. Active markets ahead this week as no supply is expected via OMO bills and interests from offshore is sustained.

Money Market – OBB and O/N both maintained at 14.00%. debit of ngn22 bio for the FX auction wasn’t significant enough to move lending rates, markets to remain illiquid in the new week.

NIBOR (%)                       LIBOR (%)

O/N            14.2917             USD 1 month               0.2388

7 Day          14.7083            USD 2 month               0.3458

30 Day       15.0833             USD 3 month              0.4669

60 Day        15.4167             USD 6 month              0.7299

90 Day        15.7917             USD 12 month             1.0527

Y/Y Consumer Inflation March 2012 :                     12.1%

FX Reserves: 10 May 2012                       (USD bn) 36.85

MPR                                                                                12.00%

Source: FMD and CBN


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