Financial market update

NIGERIA: The Asset Management Corporation of Nigeria on Tuesday said it might list the three banks that were nationalized as part of a bail-out in 2009, instead of selling them to rivals, as it seeks to determine fair value for the banks. Managing Director, AMCON, Mr. Mustapha Chike Obi, said the corporation would need to find financial advisers before finalizing its decision on whether to list directly or sell to competitors.

EUROPE: European Central Bank President Mario Draghi may take a giant leap in monetary policy tomorrow for limited economic gain. ECB officials meeting in Frankfurt will not only take the benchmark interest rate below 1 percent for the first time to a record low of 0.75 percent, they will also cut the deposit rate to zero, according to Bloomberg News surveys of economists. The easing will do little to aid an economy sliding into recession and may fuel speculation about what the ECB can do after its conventional policy options are spent, some economists said.

INDIA: Indian stocks advanced, tracking regional peers, on speculation central banks in the world’s largest economies will ease monetary policy to spur growth. The BSE India Sensitive Index added 0.2 percent to 17,462.81 at the close yesterday. The 30-stock gauge posted two straight quarters of gains for the first time since the three months ended Dec. 31, 2010.

Bonds – Slowdown in activity and yield direction on bonds recorded in Wednesday’s session, profit taking moves witnessed around midday at the long end of the curve, as expected the initial buying interest isn’t sustainable given cash markets tight liquidity conditions and weak demand for bonds from institutional investors.
05 July 2012, Sweetcrude, Lagos – Local and interntional financial market update.
Bills – T-bill yields continued to dip yesterday in a sustained rally since the start of the week, the last issued 1yr t-bill was also listed in the secondary market today closing 82bps lower than opening levels, expectation is yields hit profit taking levels soon given the tight liquidity in the cash market.

Money Market – OBB and unsecured O/N rates trading flat at 15.00% and 15.50% respectively, market liquidity remains relatively square as the CBN continues to effectively manage liquidity.

Offered: 350mio Sold: 251.09mio
Marginal rate: 155.90
Weighted average: 155.99
No. of Banks: 17

Hi                   Low               Close             Prev.Close
   163.15/25     162.50/60   162.60/70    163.15/25


NIBOR (%)                                 LIBOR (%)
O/N                   15.7500            USD 1 month           0.2458
7 Day                16.1250             USD 2 month           0.3418
30 Day             16.2500             USD 3 month           0.4596
60 Day            16.5833               USD 4 month           0.5621
90 Day            16.8750              USD 6 month           0.7364
USD 12 month         1.0695
Y/Y Consumer Inflation May 2012 :                            12.7%
FX Reserves: 03 July 2012 (USD bn)                            36.566
MPR                                                                                            12.00%
Source: FMD and CBN

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