Financial market update

31 July 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: THE Islamic Equity Index debut on the floor of the Nigerian Stock Exchange (NSE) as part of strategies to boost the breadth of the Nigerian market. Already, the management of NSE has signed a Memorandum of Understanding (MoU) with Lotus Capital Limited for the development and management of certified Sharia compliant Index. The “NSE Lotus Islamic Index” (NSE LII) will consist of companies which conform with the principles of Shari’ah.

EUROPE: European stocks declined, even as the Stoxx Europe 600 Index headed for its second successive monthly rally, as companies including BP Plc and UBS AG reported earnings that missed forecasts. The Stoxx 600 fell 0.3 percent to 263.06 at 8:11 a.m. in London today.

INDIA: India’s rupee dropped, erasing a monthly gain, after the central bank kept interest rates unchanged and raised its inflation estimate. India’s currency declined 0.3 percent to 55.7725 per dollar as of 12:21 a.m. in Mumbai, according to data compiled by Bloomberg, taking losses in July to 0.2 percent.

CHINA: China’s stocks fell to the lowest level in more than three years amid concern the slowing economy will hurt earnings growth. The Shanghai Composite Index fell 0.3 percent to 2,103.64 at the close yesterday, the lowest since March 2009. The gauge, Asia’s worst-performing gauge this month with a 5.5 percent loss, has tumbled 14.5 percent from this year’s high on March 2.

Bonds – Bond yields increasingly attractive at current levels with another 20 – 30bps off in Monday’s session, though yields are at high levels demand witnessed currently is short term as it isn’t expected to be sustained into the coming weeks.

Bills – Demand returns to the bills market as yields approach pre MPC meeting levels, despite the cash withdrawal to comply with new cash reserve requirement there seem to be increased demand just after the auction last week.

Money Market – Lending rates remain volatile with O/N rate back up 150bps to 15.50% and OBB rate up 100bps to 13.75%, some stability expected in the cash market later in the week.



                            Hi                 Low            Close          Prev.Close

USD/NGN    161.03/13      160.47/57     160.65/75     160.98/08

NIBOR (%)                     LIBOR (%)
O/N                 14.6250      USD 1 month           0.2457
7 Day               15.0000     USD 2 month           0.3393
30 Day            15.7086      USD 3 month           0.4446
60 Day            15.9583      USD 4 month           0.5481
90 Day            16.3333      USD 6 month           0.7264
USD 12 month         1.0585
Y/Y Consumer Inflation June 2012 :                   12.9%
FX Reserves: 25 July 2012 (USD bn)                   36.403
MPR                                                                             12.00%
Source: FMD and CBN

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