Financial market update

30 August 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Nigerian government on Wednesday said the sudden resignation of Prof Barth Nnaji as Minister of Power would not affect the ongoing privatization program of the nation’s power sector. Minister of Information Labaran Maku told reporters in Abuja shortly after the weekly Federal Executive Council (FEC) meeting which was presided over by President Goodluck Jonathan, that Nnaji’s resignation was to give credibility to the power sector reform program of the government.

US: The U.S. economy continued to expand “gradually” in July and early August as improving housing and retail sales helped outweigh a weakness in manufacturing, the Fed said yesterday in its Beige Book business survey. The S&P 500 Index snapped a two-day drop yesterday after a government report showed the U.S. economy expanded at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent.

CHINA: China’s stocks fell, dragging the benchmark index down for a fourth straight month, after companies from China Cosco Holdings Co. to China Shipping Container Lines Co. reported first-half losses. The Shanghai Composite Index dropped 1 percent to 2,033.64 as of 1:30 p.m. local time, heading for its lowest close since February 2009 and a 3.3 percent monthly retreat. Signs that China’s economic slowdown is deepening have dragged the Shanghai Composite down 8.6 percent this quarter.

INDIA: Indian stocks dropped for the fifth day before a gross domestic product data report tomorrow and as concern mounted the government will find it difficult to carry out measures to revive growth. The BSE India Sensitive Index, or Sensex, lost 0.4 percent to 17,422.74 at 12:24 p.m. in Mumbai

Bonds – Sustained bullish run witnessed yesterday across the curve as yields continue to dip. Yields expected to dip further on the bond curve.

Bills – Volatile and illiquid session on Wednesday in the bills market due to increased and sustained demand from all stakeholders in the market, current liquidity levels expected to boost buying interest into the new week except there is an intervention by the CBN.

Money Market – Lending rates up 50bps t0 12.50% and 13.00% on O/N and OBB rates respectively, market remains liquid with expected inflow of ngn34 bio from a maturing t-bill today.

CBN CUT- OFF RATE – $/NGN 155.80

                             Hi           Low         Close         Prev.Close
USD/NGN   158.33/43  158.00/10  158.05/15   158.15/25

Interest rates
NIBOR (%)                   LIBOR (%)
O/N               13.5833      USD 1 month        0.2315
7 Day             14.0417      USD 2 month        0.3295
30 Day          15.2500      USD 3 month        0.4218
60 Day          15.8750      USD 4 month        0.5294
90 Day          16.2500      USD 6 month        0.7092
USD 12 month       1.0340
Y/Y Consumer Inflation June 2012 :               12.9%
FX Reserves: 28 August 2012 (USD bn)          38.504
MPR                                                                        12.00%

Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

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