Financial market update

28 May 2012, Sweetcrude, Lagos – Local and international financial market update.
EUROPE: Stocks rose in Europe and Asia while the Euro strengthened for the first time in five days as Greek opinion polls showed growing support for the parties backing a bailout plan. Greece’s New Democracy placed first in all six opinion polls published on May 26 as campaigning continued for the general election on June 17.

CHINA: China’s stocks rose for the first time in four days on speculation the government will take more steps to bolster economic growth and concern eased that Greece will leave the euro bloc. China’s state council said on May 23 that downside risk to growth are increasing and the government will intensify “fine tuning” policies as needed, signaling it may take more aggressive steps to support the nation’s expansion.

INDIA: The Indian Rupee rose to an almost one week high after Greek opinion polls showed voters backed parties that support a European Union led bailout easing concern regional debt crisis will worse. The rupee advanced 0.6 percent to 55.0550 per united states dollar as of 9.22am n Mumbai according to data compiled by Bloomberg. The currency touch an all time high of 56.3875 last week and has lost 7.6 percent this quarter. Reserve Bank of India governor said on May 24 that the central bank is monitoring the market and will do whatever is necessary within the scope of its policy to stabilize the exchange rates.

Bonds – Still very light trading in the bond market. Yields remained flat across the curve.

Bills – The CBN came out to offer N150billion again today in the 5th July and 19th July maturities in OMO bills in a continued attempt to mop up liquidity. They only sold N3.4billion very likely as a result of the high bids received.

Money Market – OBB and unsecured O/N rates dropped another 75bps to 10.50% as the system is awash with liquidity on the back of the inflows from the bond maturity of N245billion on Tuesday, FAAC of approximately N280billion and N50billion in matured on Friday. Expectation is that the CBN will keep coming out to offer OMO in an attempt to mop up this liquidity.

                          Hi               Low          Close       Prev.Close
USD/NGN  160.35/45  159.60/70  159.60/70  159.90/00

NIBOR (%)                           LIBOR (%)

O/N               11.4583          USD 1 month           0.2388

7 Day             12.0417          USD 2 month           0.3458

30 Day          12.8750          USD 3 month          0.4669

60 Day          13.1667           USD 6 month          0.7364

90 Day          13.5000          USD 12 month         1.0692

Y/Y Consumer Inflation April 2012 :                      12.9%

FX Reserves: 22 May 2012                     (USD bn) 37.482

MPR                                                                            12.00%

Source: FMD and CBN


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