Financial market update

11 March 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Federal Government, in collaboration with some international development partners, intends to set up a ‘wholesale’ financial institution, in a major drive to push down interest rates and provide an investment-friendly window for long-term funds to investors. Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who unfolded government’s plan during the 2013 budget breakdown in Abuja, Thursday, said the manufacturing sector, especially the small and medium enterprises (SMEs) cannot grow without reliable long-term sources of finance and affordable interest rates.

EUROPE: European stock futures were little changed, indicating the Stoxx Europe 600 Index will remain near 4 1/2-year high, as Fitch Ratings downgraded Italy. Futures on the Euro Stoxx 50 Index expiring this month slipped 0.1 percent to 2,725 at 7:16 a.m. in London. The Stoxx 600 rallied 2.3 percent last week, the biggest advance in two months, as employers in the U.S. increased payrolls more than forecast and optimism mounted that central banks will continue to stimulate their economies.

INDIA: Indian stocks swung between gains and losses as some investors judged last week’s rally may have outpaced the outlook for interest rate cuts by the central bank. The S&P BSE Sensex index gained less than 0.1 percent to 19,688.78 at 11:18 a.m. in Mumbai, after changing directions at least six times.

CHINA: China’s benchmark stock index fell in its longest losing streak in three months as the country’s industrial output had the weakest start to a year since 2009 and lending and retail sales growth slowed. The Shanghai Composite Index dropped 0.4 percent to 2,310.59 at the close, trimming its gain since last year’s Dec. 3 low to 18 percent.

Bonds – Bearish session to close the week, another 18bps upward move on the bond curve Friday. We have recorded about 60bps move this week due to the sell-off in the market. Monthly bond auction next week and available on offer is the 2017’s and 2022’s ngn35 bio each, yields expected to trade at this level and slightly higher on the 2018’s and 2019’s.

Bills – Yields up 35bps in Friday’s session due to the continued sell-off from Thursday. Another OMO auction announcement at the start of Friday’s session where ngn103.42 bio was issued and a total of ngn224.59 bio of OMO bills issued this week.

Money Market – OBB and ON rate maintained at 10.10% and 10.15%. Cash Market remains liquid though ngn103.42 bio was issued in OMO bills on Friday.

Indicative Currency Exchange Rates
Bid             Offer

EURUSD           1.3008            1.3018
GBPUSD            1.4932            1.4942
USDJPY              96.05              96.45
USDCHF            0.9510           0.9530
GBPEUR            1.1478             1.1488
USDZAR            9.0990           9.1990
USDNGN            157.70            158.45
JPYNGN            1.6419              1.6919
CHFNGN           165.83             169.83
EURNGN           205.14            209.14
GBPNGN           235.48            239.48
ZARNGN             17.33              19.33

West Texas Intermediate oil dropped from the highest price in more than a week as Saudi Arabia boosted output and industrial production slowed in China, the world’s secondbiggest consumer of crude. WTI for April delivery fell as much as 35 cents to $91.60 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.85 at 3:15 p.m. Singapore time.

Interest rates
NIBOR (%)                           LIBOR (%)

O/N               10.2417               USD 1 month              0.2022
7 Day             10.5917               USD 2 month              0.2405
30 Day          11.0417                USD 3 month             0.2801
60 Day          11.3750               USD 4 month              0.3326
90 Day          11.6250               USD 6 month              0.4474
USD 12 month            0.7335
Y/Y Consumer Inflation January 2013 :                   9.00%
FX Reserves: 4 March 2013 (USD bn)                       47.563
MPR                                                                                  12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

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