22 November 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigeria – The Naira strengthened on inflows for purchases of fixed income securities after the central bank held its benchmark interest rate at a record high yesterday to check inflation and stabilize the local currency. Nigerian Bond yields remain attractive offshore investors with the inflows boosting dollar supply. CBN Governor Lamido Sanusi stated that the appreciation in the Naira could be traced to tight monetary conditions, improved supply of foreign exchange to the market by oil companies and increased inflows from portfolio investors.
India – Indian’s rupee traded at a two month low before the government seeks lawmaker’s approval for policy changes announced this quarter in the winter sessions of parliament that begins today. Prime Minister Manmohan Singh needs legislators support for plans to allow amore foreign investment in pension and insurance industries.
Europe – Moody’s down grade of French sovereign debt by one level to Aa1 and maintained its negative outlook citing what it said was a worsening growth outlook. S&P lowered its rating by one level to AA+ on Jan 13. French bonds have handed investors an 8.8% return since the S&P downgrade, more than double the 3.9% gain from AAA rated sovereign bonds. Top ranked German bonds returned 3.1% during the same period.
Bonds – The markets rallied to open on Wednesday as popular expectation and sentiment was that the auction would close significantly lower than secondary market levels. The profit takers pushed yields up to close the day but we can expect the markets to rally again tomorrow due to the low cut off particularly on the 22s.
Bills – Bullish markets still on Wednesday as the liquidity in the money markets put downward pressure on rates. Trend is expected to continue tomorrow unless the CBN comes out to mop up through OMO issuance
Money Market – OBB and unsecured O/N rates held stable today at 10.00% & 10.25%, the market still liquid from the FAAC flows which hit the system on Wednesday.
CBN WDAS – offered and sold $200mio, with the marginal rate now at 157.3176 [inc. the 1% commission], 1 point higher than the previous auction.
Indicative Currency Exchange Rates
EURUSD 1.2784 1.2794
GBPUSD 1.5960 1.5970
USDJPY 82.46 82.86
USDCHF 0.9378 0.9398
GBPEUR 1.2422 1.2432
USDZAR 8.9562 9.0562
USDNGN 157.60 158.10
JPYNGN 1.9112 1.9612
CHFNGN 168.05 172.05
EURNGN 201.48 205.48
GBPNGN 251.53 255.53
ZARNGN 17.60 19.60
Oil rose again for a second day after EIA data shows stockpiles declined for the first time in three weeks: WTI rose by $0.39 to $87.77/bbl, and Brent climbed higher by $1.03 to $110.86/bbl with the WTI-Brent benchmark premium at $23.48.
NIBOR (%) LIBOR (%)
O/N 10.5000 USD 1 month 0.2075
7 Day 10.8333 USD 2 month 0.2570
30 Day 11.9167 USD 3 month 0.3115
60 Day 12.4167 USD 6 month 0.5270
90 Day 13.0000 USD 12 month 0.8610
Y/Y Consumer Inflation September 2012 : 11.3%
FX Reserves: 15 November 2012 (USD bn) 43.37
Source: Reuters Guardian, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria
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USD/NGN 157.85/95 157.48/58 157.60/70 157.85/95