Financial market update

(Updated) 13 July 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Treasury bill yields declined to the lowest in more than six weeks at an auction yesterday with bids being made for more than threefold the 95.6 billion naira put on sale./ The Central Bank of Nigeria sold 30.159 billion naira of 91 day bills at a yield of 13.75%, 65.403 billion naira of 181 day bills at a yield of 14.88%.

Nigeria’s Foreign Affairs Minister Olugbenga Ashiru says China investment in Africa has totalled about USD10 billion and calls for ties as he plans to attend the next Ministerial conference of the Forum on China-Africa Cooperation (FOCAC) slated for July 19-20 in Beijing.

US: US mortgage rates dropped with 30 year loans reaching a record low for the fourth straight week amid signs of improvement in the housing market. The average rate for a 30 year fixed rate mortgage fell to 3.56%.

EUROPE: Investors are relinquishing the sanctuary of AAA bonds as yields near or below zero on German, Dutch and Finnish debt drives them to seek higher returns on Belgian and French securities. Italy became the latest euro member to be downgraded after Moody’s today cut the nations bond rating by two steps of Baa2 from A3. Banks in the euro region more than halved their deposits at the ECB according to figures released yesterday when they parked Euro 324.9 billion with the ECB. Down from 808.5billion Euros the previous day.

CHINA: China’s growth slowed for a sixed quarter to the weakest pace since the global financial crisis putting pressure on Premier Wen Jiabao to boost stimulus to secure a second half economic rebound. GDP expanded 7.6% last quarter from a year earlier compared to the previous quarter of 8.1% This data saw the yuan weaken for a third day and headed for the biggest weekly decline in six weeks.

INDIA: Indian stocks rebounded from their biggest decline in six weeks after Tata Consultancy Services the nation’s largest software exporter, reported profits that bean estimates. The BSE rose 0.5 percent to 17321.44. One of out of 3, Sensex companies that reported earnings for the June quarter so far has missed analysts estimates according to data compiled by Bloomberg. Profits at 30% of the companies in the measure trailed forecasts in the March Quarter compared with 47% in the period ended December. The Sensex has advanced 12% this year and trades at 13.5 times estimated earnings compared with the MSCI Emerging Markets Index’s 10 times.

NIBOR (%)                        LIBOR (%)
O/N                   15.7083    USD 1 month      0.2488
7 Day               16.1250      USD 2 month      0.3408
30 Day             16.4167     USD 3 month       0.4551
60 Day             16.5833     USD 4 month       0.5541
90 Day             16.7500    USD 6 month       0.7294
USD 12 month     1.0685
Y/Y Consumer Inflation May 2012 :               12.7%
FX Reserves: 10 July 2012 (USD bn)                36.497
MPR                                                                                12.00%
Source: FMD and CBN

About the Author