Financial market update

24 September 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s naira headed for its first weekly drop in four after the central bank sold the least amount of foreign exchange in a month. The currency of Africa’s biggest oil producer weakened less than 0.1 percent to 157.70 per dollar on the interbank market as of 12:16 p.m. in Lagos on Friday, the commercial capital, poised for 0.4 percent decline this week. The Central Bank of Nigeria sold $309.42 million at its two regular foreign-currency auctions this week.

EUROPE: The euro gained against the dollar and yen after Italian and Spanish leaders agreed to keep working to stabilize regional financial markets. The 17-nation currency was buoyed earlier amid speculation Spanish and European Union officials were working on plans to trigger European Central Bank bond purchases to boost Spain’s economy. The common European currency added 0.1 percent to $1.2982 at 10:58 a.m. New York time on Friday.

CHINA: China’s economic slowdown may persist into next year amid a lack of funding for approved infrastructure projects, according to an academic adviser to the nation’s central bank. Expansion will be 7.3 percent to 7.4 percent in the fourth quarter and 7 percent to 7.5 percent in the first half next year, Song Guoqing, a Peking University professor, said Thursday in a brief interview in Beijing.

US: U.S. stocks rose, erasing most of a weekly drop, and oil climbed as investors watched developments in Europe’s debt crisis and Apple Inc. began selling its new iPhone. The Standard & Poor’s 500 Index added 0.3 percent to 1,464.03 at 12:09 p.m. in New York on Friday.

Bonds – Clear selling interest across the curve on Friday as demand seemed to slowdown finally, though we expect a reversal in trend this week as we approach the start date of the bond inclusion on the index. Liquid cash markets also should boost demand in the new week.

Bills – Illiquid session on Friday due to volatility from continued selloff across board, OMO auction conducted at the start of trading but no sale recorded. Trend expected to slowdown in the new week due to improved liquidity conditions.

Money Market – Lending rates recline for the second straight day to 10.50% on OBB and ON rate, FAAC allocation disbursed.

                           Hi              Low          Close         Prev.Close
USD/NGN  157.82/92   157.58/68   157.70/80   157.58/68

Interest rates
NIBOR (%)                       LIBOR (%)
O/N              10.8750           USD 1 month          0.2165
7 Day            11.4583            USD 2 month          0.2968
30 Day         13.6667            USD 3 month          0.3693
60 Day         14.2917            USD 4 month          0.4699
90 Day         14.8333           USD 6 month          0.6554
USD 12 month        0.9845
Y/Y Consumer Inflation July 2012 :                    12.8%
FX Reserves: 18 September 2012 (USD bn)      40.811
MPR                                                                           12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

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