Financial market update

22 January 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Central Bank of Nigeria left its benchmark interest rate unchanged for an eighth consecutive meeting as inflation exceeded the bank’s target. Eight members of the Monetary Policy Committee voted to keep the policy rate at 12 percent, Governor Lamido Sanusi told reporters yesterday in the capital, Abuja. Inflation, which slowed to 12 percent in December, is still above the central bank’s target of less than 10 percent.

EUROPE: Euro-area finance ministers staked out their turf in a brewing battle over bank rescues amid German and Austrian warnings that direct bailouts won’t be widely available. Ministers seek an agreement in the first half of this year on how and when the 500 billion-euro ($666 billion) European Stability Mechanism can bypass governments and provide direct help to banks.

INDIA: Indian stocks advanced for a fourth day as the government took further measures to lower the fiscal deficit and amid signs corporate earnings are improving. The BSE India Sensitive Index, or Sensex, rose 0.2 percent to 20,134.17 at 10:10 a.m. in Mumbai.

CHINA: China’s stocks fell for the first time in three days, led by property developers, after valuations for the benchmark index approached eight-month highs. The Shanghai Composite Index slid 0.6 percent to 2,315.14 at the close. The index is valued at 12.8 times reported profit, near the highest level since May, data compiled by Bloomberg show.

Bonds – Bullish session yesterday as some expectation of a cut of the MPR or some downward adjustment in the asymmetric corridor lead to some buying across the curve. The market will now look to Wednesday’s auction for short term direction for rates. The liquidity in the market also likely to play a role in yield direction as the significant bond maturities in Q1 are also likely to add some downward pressure.

Bills – Views on possible downward adjustment in the MPR and the asymmetric corridor lead to a very bullish session in the markets yesterday. The money markets are also very liquid and in the absence of OMO activity the market bought bills mostly short dated.

Money Market – OBB and unsecured O/N rates holding stable at 10.15% and 10.25%. Markets being kept liquid by the liquidity injections coming from the FAAC inflow and maturing bills from last week.

CBN WDAS AUCTION: CBN offered and sold $100mio with the marginal rate at 157.2873 [inc. 1% commission] just 1 point higher than the last marginal rate.

Indicative Currency Exchange Rates
Bid             Offer

EURUSD        1.3354          1.3364
GBPUSD        1.5848           1.5858
USDJPY         88.89            89.29
USDCHF        0.9302          0.9322
GBPEUR         1.1866           1.1876
USDZAR         8.8425          8.9425
USDNGN        157.00           157.75
JPYNGN         1.7662            1.8162
CHFNGN        168.78           172.78
EURNGN        209.66           213.66
GBPNGN        248.81            252.81
ZARNGN         17.76              19.76

Oil traded near a four-month high in New York as Japan’s central bank said it will expand asset purchases to lift the world’s third-biggest crude consumer out of its third recession in five years. WTI for February delivery, which expires today, was at $95.70 a barrel, up 14 cents, in  electronic trading on the New York Mercantile Exchange at 2 p.m. Singapore time.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N              10.4583         USD 1 month              0.2047
7 Day            11.0833         USD 2 month              0.2495
30 Day          12.1250        USD 3 month               0.3020
60 Day          12.5833        USD 4 month               0.3521
90 Day          12.9583        USD 6 month              0.4835
USD 12 month             0.8090
Y/Y Consumer Inflation December 2012 :              12.00%
FX Reserves: 10 January 2013 (USD bn)                 44.678
MPR                                                                                 12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

                              Hi             Low            Close       Prev.Close
USD/NGN   157.18/28    156.92/02    157.00/10   157.05/15

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