11 December 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigeria – The FG is set to restart the privatization of the Afam Generating Company (GENCO) and Kaduna Distribution Company (DISCO) . The National Council on Privatization (NCP) had earlier cancelled the Afam GENCO privatization after the discovery that former Power Minister, Bart Nnaji, had a direct interest in one of the consortia that bid for the plant, while the Kaduna GENCO privatization was inconclusive because none of the prior bidders met the technical qualification criteria. [BusinessDay]
USA – Economists expect the Federal Reserve will amplify record accommodation tomorrow by announcing $45 bn in monthly Treasury buying that will push its balance sheet almost to $4 trillion. This is an increased from the $40 bn that was currently being spent and which is expected to go on until the labor market sees significant improvement.
India – The rupee rose toward a one month high before a report that economists predict will show factory output rebounded in November Industrial production climbed 5% in Oct (YoY) after contracting 0.4% in Sep. Factory output which also increased in China during Nov is being seen as Asian economies once again improving.
Bonds – Very bullish session on Monday as a surge of demand hit the market pulling yields down across the curve. Most of the focus was on the higher priced 10.70% May 18s and the less liquid 7.00% Jun 19s which came off about 20bps. Expectation is that yields will head lower across year end.
Bills – In reaction to an OMO offer of N150 billion the market was bearish on Monday as some players took profit on low rates and tried to switch for better at the auction. Rates went up as much as 70bps on the longer dated maturities close to 364 days.
Money Market – OBB and unsecured O/N rates dipped to open the week at 10.25% and 10.50% as liquidity levels received a boost from of about N200bio being a special FAAC release payment.
CBN WDAS – CBN offered $80mio and sold $66.05mio. The marginal rate was maintained at 157.3176 [1% commission included]. 6 banks bid at the auction.
Indicative Currency Exchange Rates
EURUSD 1.2948 1.2958
GBPUSD 1.6083 1.6093
USDJPY 82.35 82.75
USDCHF 0.9332 0.9352
GBPEUR 1.2420 1.2430
USDZAR 8.6600 8.7600
USDNGN 157.00 157.50
JPYNGN 1.9065 1.9565
CHFNGN 168.24 172.24
EURNGN 203.28 207.28
GBPNGN 252.50 256.50
ZARNGN 18.13 20.13
Oil declined for a fifth day in New York on concern a leadership change in Italy will disrupt efforts to curb Europe’s debt crisis. Brent bounced back briefly to $108.54/bbl pre New York hours before retracing down later. Technically speaking
$106.70/bbl is an important level on Brent
NIBOR (%) LIBOR (%)
O/N 11.2083 USD 1 month 0.2120
7 Day 11.6667 USD 2 month 0.2560
30 Day 12.5417 USD 3 month 0.3105
60 Day 12.9167 USD 6 month 0.5180
90 Day 13.2000 USD 12 month 0.8530
Y/Y Consumer Inflation October 2012 : 11.70%
FX Reserves: 30 November 2012 (USD bn) 44.47
Source: Reuters Guardian, Bloomberg, Central Bank of Nigeria,
Financial Market Dealers Association Standard Chartered Bank Nigeria.
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USD/NGN 157.05/15 156.80/90 157.05/15 157.00/10