04 June 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Two bills being proposed in the National Assembly which would give lawmakers powers to vet the Central Bank of Nigeria’s (CBN) budget and appoint its board, are a serious menace to the bank’s independence and the nation’s economic reforms if passed, its governor, Sanusi Lamido Sanusi, told Reuters. Bola Ahmed Tinubu, former governor of Lagos state has also called on the lawmakers not to tamper with the autonomy of the apex bank.
UK: U.K. stocks tumbled to a six-month low as the nation’s manufacturing shrank at the fastest pace since 2009. A gauge of factory output, based on a survey by Markit Economics and the Chartered Institute of Purchasing and Supply, dropped to 45.9 from 50.2 in April. The benchmark FTSE 100 fell 60.67 points, or 1.1 percent, to 5,260.19 at the close in London on Friday, the lowest since Nov. 25.
CHINA: China led a slowdown in manufacturing across Asia that adds to risks for the global economy as Europe’s sovereign-debt crisis roils markets and drags down confidence. The Purchasing Managers’ Index fell to 50.4 in May from 53.3 in April, China’s statistics bureau and logistics federation said on Friday in Beijing. In China, the reports signal a deepening economic slowdown, raising chances Premier Wen Jiabao will take more-aggressive steps to sustain expansion after he pledged a sharper focus on stabilizing growth.
INDIA: India’s rupee completed a ninth weekly decline, the longest losing streak since October 2008, after a government report showed the economy grew at the slowest pace in nine years. The currency fell to a record low on Thursday as data showed Asia’s third-largest economy expanded 5.3 percent in the first quarter from a year earlier, compared with a median estimate of 31 economists surveyed by Bloomberg News for a 6.1 percent gain. The rupee slid 0.4 percent this week to 55.5850 per dollar in Mumbai, according to data compiled by Bloomberg
Bonds – Activity picked up on Friday with some selling on the short end and a fairly stable long end. Rates went up an average 18bps on the short end and held stable on the long end. Volumes are still very low.
Bills – Another OMO offering on Friday, it appears the Central Bank want to squeeze the liquidity significantly as the offering comes even with liquidity levels very low.
Money Market – OBB and unsecured O/N rates are up another 200bps to 14.00% & 14.50% as the Central bank has succeed in mopping up the liquidity which came in early last week.
CBN WDAS RESULT
AMOUNT ON OFFER – $ 300MIO
AMOUNT SOLD – $ 300 MIO
BID RATE – $/NGN 155.80
SCB RATE – $/NGN 155.82
Hi Low Close Prev.Close
USD/NGN 160.58/68 159.90/00 160.50/60 159.80/90
NIBOR (%) LIBOR (%)
O/N 14.4583 USD 1 month 0.2398
7 Day 14.7500 USD 2 month 0.3468
30 Day 15.0833 USD 3 month 0.4679
60 Day 15.4583 USD 4 month 0.5681
90 Day 15.7500 USD 6 month 0.7379
USD 12 month 1.0707
Y/Y Consumer Inflation April 2012 : 12.9%
FX Reserves: 30 May 2012 (USD bn) 37.682
Source: FMD and CBN