Financial market update

27 August 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Central Bank of Nigeria has finally confirmed that it has almost concluded arrangements to restructure the currency which would see the entire notes redesigned with new features and introduce a high denomination of N5,000. The newly designed currency is expected to be launched early 2013, according to the governor of CBN Sanusi Lamido Sanusi, who briefed journalists on the new development in Abuja on Thursday.

EUROPE: Chancellor Angela Merkel said that Germany will stand behind the Greek government as it struggles to overhaul the economy, rebuffing European critics who advocate Greece’s exit from the euro. Merkel speaking at a joint press conference with Greek Prime Minister Antonis Samaras in Berlin on Friday, said the conditions for Greece’s international bailouts remain in force and she is ‘deeply convinced’ he will make every effort to solve the country’s problems.

US: U.S. stocks rose, paring the Standard & Poor’s 500 Index’s first weekly decline in almost two months, as Federal Reserve Chairman Ben S. Bernanke said the central bank has the ability to take additional steps to boost the economy. The S&P 500 added 0.5 percent to 1,409.42 as of 1:06 p.m. in New York ON Friday.

INDIA: The Indian government may exceed its budget-deficit target because of higher spending on petroleum subsidies and a weak economic growth outlook that could lead to a tax shortfall, the Reserve Bank of India said.

Bonds – Calm session to end the week matched with a slowdown in demand for bonds across the curve as against what has been witnessed in previous sessions. Yields still expected to dip further across the curve.

Bills – Yields continued to drop across board on Friday due to current market liquidity and strengthened demand from all stakeholders. Trend to be sustained into the coming week except we see some mop-up moves by the CBN via OMO bills.

Money Market – Cash market remains liquid with OBB off 100bps to 10.50% and O/N rate to 11.00%.

                          Hi              Low          Close        Prev.Close
USD/NGN  158.25/35   157.77/87   158.25/35   158.25/35
Interest Rates

NIBOR (%)                   LIBOR (%)
O/N               11.2500      USD 1 month       0.2345
7 Day             12.3333      USD 2 month      0.3300
30 Day          15.2500      USD 3 month      0.4249
60 Day          15.8333       USD 4 month      0.5324
90 Day          16.5000      USD 6 month      0.7122
USD 12 month    1.0365
Y/Y Consumer Inflation June 2012 :             12.9%
FX Reserves: 16 August 2012 (USD bn)        37.021
MPR                                                                      12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

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