07 August 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Managing Director/Chief Executive Officer, Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, has said the operations of the tier 1 banks will not be affected by the recent hike in the cash reserve requirements (CRR), due to the cheap funds available to them. The FDC boss made the declaration in his monthly economic news and views, presented at the Lagos Business School’s executive breakfast meeting.
US: U.S. stocks rose, sending the Standard & Poor’s 500 Index to a three-month high, as German Chancellor Angela Merkel’s government backed the European Central Bank’s bond-buying plan and earnings beat forecasts. More than two stocks advanced for each that fell on U.S. exchanges at 2:34 p.m. in New York yesterday. The S&P 500 rose 0.6 percent to 1,398.82, gaining 2.5 percent in two days.
INDIA: Indian stocks climbed to the highest level in more than three weeks, tracking Asian equities, as higher-than-forecast data for U.S. payrolls and the services industry boosted prospects for exports to the biggest economy. The BSE India Sensex, jumped 1.3 percent to 17,412.96 at close on Monday, the highest level since July 11. Data on Aug. 3 showed U.S. payrolls rose in July, boosted by a pickup in employment at automakers, even as the jobless rate unexpectedly gained.
Bonds – Light demand recorded on the 5yr – 7yr tenor bracket, traded off another 15 – 20bps in two consecutive sessions, buying interest perceived to be from institutional investors and corporate clients as demand is not reflective of current interest rate direction.
Bills – Light demand recorded on the short tenured bills trading 30bps off opening levels yesterday. This trend isn’t sustainable given the direction of the cash market and indicative re-discounting rates of the CBN for banks to raise liquidity if the need arises.
Money Market – Cash market remains illiquid, lending rates trading at high levels of 17.50% and 18.50% respectively on OBB and O/N. The CBN announced rates for its bill rediscounting window to the market today ranging from 15.50% to 16.25% on 1dy – 32dy bills.
CBN WDAS AUCTION
AMOUNT ON OFFER – $ 250MIO
AMOUNT SOLD – $ 250MIO
MARGINAL RATE – $/NGN 155.86
CBN WEIGHTED AVERAGE RATE – $/NGN 155.90
Hi Low Close Prev.Close
USD/NGN 161.83/93 161.45/55 161.60/70 161.55/65
NIBOR (%) LIBOR (%)
O/N 7.9167 USD 1 month 0.2433
7 Day 18.1667 USD 2 month 0.3388
30 Day 18.5417 USD 3 month 0.4389
60 Day 18.8333 USD 4 month 0.5454
90 Day 19.0417 USD 6 month 0.7242
USD 12 month 1.0472
Y/Y Consumer Inflation June 2012 : 12.9%
FX Reserves: 03 August 2012 (USD bn) 36.579
Source: FMD and CBN