Financial market update

18 July 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Approval of the newly-drafted Petroleum Industry Bill (PIB) by the Federal Government and hope of its speedy passage by the National Assembly have rekindled investors’ confidence in the Nigerian Oil and Gas sector, a source at the Petroleum Ministry told THISDAY at the weekend. Activities in the sector have been at very low ebb since 2009 due to delay in the PIB passage. Former Chairman, Senate Committee (Upstream), Lee Maeba disclosed last year that the industry had lost in excess of $28 billion in investments.

EUROPE: European stocks advanced after Federal Reserve Chairman Ben S. Bernanke late yesterday outlined options to stimulate the U.S. economy should it fail to spur more jobs growth. Asian shares and U.S. futures declined. The Stoxx Europe 600 Index gained 0.3 percent to 256.89 at 8:06 a.m. in London.

CHINA: A rebound in China’s M1 money-supply growth from the slowest pace since at least 1996 signals expansion in the world’s second-largest economy will accelerate this quarter, if history is any guide. The CHART OF THE DAY shows that M1, which includes money in circulation and demand deposits, leads adjustments in gross domestic product. The gauge’s growth accelerated in June for a second month after reductions in benchmark interest rates and bank reserve requirements. Also tracked is the real estate climate index compiled by the National Bureau of Statistics.

INDIA: Reserve Bank of India Governor Duvvuri Subbarao said yesterday the nation’s potential growth rate may have slowed to 7.5 percent as rainfall delays threaten to limit farm output that represents 15 percent of the economy and is key to cooling food costs. U.S. Federal Reserve Chairman Ben S. Bernanke signaled he’s concerned about the economic recovery and doesn’t view inflation as a hindrance to providing more stimulus.

Bonds – Demand recorded at the short end of the curve yesterday. This is a sharp turn from the trend recorded on Monday and market view into the auction today, higher cut off rates still expected at the auction due to weak demand for bonds at this time and uncertainty as to the prime rate decision next week when the monetary policy committee meets.

Bills – Traders interest on the buy side sustained in yesterday’s session pulling yields off another 10 – 15bps on traded maturities.

Money Market – OBB and O/N rate flat at 14.00% and 14.25%.

Hi             Low           Close          Prev.Close
USD/NGN   161.57/67  159.95/05  159.95/05  161.55/65


NIBOR (%)                       LIBOR (%)
O/N                 14.9667        USD 1 month       0.2468
7 Day               15.2083        USD 2 month       0.3398
30 Day            15.7500        USD 3 month       0.4551
60 Day            16.0417         USD 4 month      0.5531
90 Day            16.2917         USD 6 month       0.7284
USD 12 month     1.0660
Y/Y Consumer Inflation May 2012 :                   12.7%
FX Reserves: 16 July 2012 (USD bn)                  36.418
MPR                                                                           12.00%
Source: FMD and CBN

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