Financial market update

10 September 2012, Sweetcrude, Lagos – Local and international financial market update. NIGERIA: The Federal government has approved N106 billion for the construction of 11 new international airport terminal buildings in Lagos, Kano, Abuja, Port Harcourt and Enugu, Aviation Minister, Stella Oduah announced on Thursday. The new international terminal projects are different from the ongoing remodeling and reconstruction of 11airports in the country Oduah added, the new projects will include five international terminals for commercial flights and six for perishable cargoes.

EUROPE: European stocks posted the largest weekly advance since June as European Central Bank President Mario Draghi outlined an unlimited bond-buying program to regain control of interest rates and stem the sovereign debt crisis. The benchmark Stoxx 600 increased 2.3 percent to 272.30 last week. The gauge has climbed 16 percent from this year’s low on June 4 amid speculation central banks around the world will take further measures to support an economic recovery.

CHINA: Enterprises from China and central and eastern Europe have signed many cooperation deals taking advantage of a specific credit of 10 billion U.S. dollars offered by China, a Foreign Ministry spokesman said Friday. China introduced a plan to proceed with the loans during a meeting of the Secretariat of China-Central and Eastern European Cooperation held earlier last week in Beijing, Hong said.

INDIA: Indian stocks advanced the most since June, tracking global equities, as the European Central Bank’s announcement of an unlimited bond-buying plan boosted demand for riskier assets. The BSE India Sensitive Index rose 2 percent to 17,683.73 at close in Mumbai on Friday, the most since June 29.

Bonds – Bonds continued to be bought across the curve on a steady yield dip on Friday. No floor in sight as of now as the trend remained sustained due to offshore interest irrespective of onshore liquidity condition.

Bills – Light correction on bill yields due to cut-off rate from Thursday’s OMO auction and yet another announcement in at the start of trading on Friday. Liquidity level is fast declining and as such demand is expected to reduce in the new week.

Money Market – Lending rates began to rise on Friday due to continuous OMO issuance last week. OBB up to 13.50% and O/N at 14.00%, a total of ngn185.08 bio was mopped up from the system via OMO issuance. Lending rates expected to rise further in the new week.

                            Hi                 Low              Close        Prev.Close
USD/NGN   157.78/88   157.00/10   157.45/55   157.70/80

Interest rates
NIBOR (%)                   LIBOR (%)
O/N                12.8750     USD 1 month         0.2280
7 Day              13.3750     USD 2 month         0.3230
30 Day           14.5000     USD 3 month        0.4078
60 Day           15.1250      USD 4 month        0.5099
90 Day           15.4167      USD 6 month         0.6947
USD 12 month       1.0240
Y/Y Consumer Inflation July 2012 :                12.8%
FX Reserves: 4 September 2012 (USD bn)     39.351
MPR                                                                        12.00%

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

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