Financial market update

14 December 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria is currently producing around 2.4m to 2.5m barrels per day and output should remain at similar levels next year, the oil minister said on Wednesday. A major fire at a Shell facility, an Exxon spill and severe flooding cut oil output by up to a fifth in October and November, and caused lengthy delays to exports. Diezani Alison-Madueke told reporters during a meeting of the OPEC oil-producing countries in Vienna that production had since recovered and should remain at current levels.

EUROPE: European Union chiefs pledged to seek a joint strategy for handling failing banks as German Chancellor Angela Merkel demanded taxpayers be spared the costs. Leaders agreed to start work next year on a single resolution mechanism for euro-area banks to complement the European Central Bank oversight role approved yesterday by European finance chiefs. Lenders should underwrite financial stability by repaying governments as needed, EU leaders said.

INDIA: India’s inflation unexpectedly eased in November, a moderation that may not spur the central bank to cut interest rates next week as price gains still remain above its comfort level. The wholesale-price index rose 7.24 percent from a year earlier, after climbing 7.45 percent in October, the Commerce Ministry said in a statement in New Delhi today.

CHINA: China’s stocks jumped the most in three years on speculation state-backed institutions were buying shares as a manufacturing survey added to optimism the world’s second-largest economy will rebound. The Shanghai Composite Index climbed 4.2 percent to 2,149.21 at 2:48 p.m.

Bonds – A relatively quiet day in the bond markets on Thursday, though yields opened the day higher than closing levels. To close yields were largely flat. The auction next week and the level of offshore participation will be a key indication of yield direction going into 2013.

Bills – Rates came off about 15bps yesterday due to the liquidity which came into the system, but the buying slowed down as a result of the OMO offering as most of the demand went into the auction. It is very likely that we will continue to see OMO offerings through to year end.

Money Market – OBB and unsecured O/N rates are stable at 13.25% and 13.50%. N171billion came into the system on Wednesday from maturing bills and the CBN mopped up that liquidity through OMO bills sold yesterday.

Indicative Currency Exchange Rates
                         Bid          Offer
EURUSD       1.3100        1.3110
GBPUSD        1.6129        1.6139
USDJPY         83.70         84.10
USDCHF        0.9222      0.9242
GBPEUR        1.2309       1.2319
USDZAR        8.6416       8.7416
USDNGN       157.45        157.95
JPYNGN         1.8811        1.9311
CHFNGN        170.73       174.73
EURNGN        206.26      210.26
GBPNGN        253.95       257.95
ZARNGN        18.22         20.22

Oil rose in New York, extending a weekly gain as a report signalled manufacturing may expand at a faster pace this month in China, the world’s second-biggest crude consumer. Crude for January delivery rose as much as 77 cents to $86.66 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.60 at 3:05 p.m. Singapore time.

Interest rates
NIBOR (%)                     LIBOR (%)

O/N              13.5417          USD 1 month             0.2090
7 Day            13.7917          USD 2 month             0.2550
30 Day         14.1667          USD 3 month             0.3080
60 Day         14.3750          USD 4 month             0.3610
90 Day         14.5833          USD 6 month             0.5130
USD 12 month            0.8460
Y/Y Consumer Inflation August 2012 :                   11.7%
FX Reserves: 28 September 2012 (USD bn)          44.567
MPR                                                                                12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria

Hi             Low          Close        Prev.Close
157.75/85   157.65/75   157.70/80     157.70/80

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