Financial market update

Financial markets15 May 2013, Sweetcrude, Lagos – Local and international financial market services update.
NIGERIA: The Debt Management Office has set the nation’s borrowing limit at 40% of the Gross Domestic Product. The Director-General, DMO, Dr. Abraham Nwankwo, said this at the ‘Debt Sustainability Workshop’, which opened in Abuja on Monday. Nwakwo said despite the World Bank’s credit rating, which gave the country clearance to borrow up to 56 per cent of the GDP, the nation would limit its borrowing to 40 per cent.

EUROPE: The euro, which has fallen since the European Central Bank reduced the appeal of the shared currency by cutting interest rates earlier this month, is poised to rebound after a bullish monthly reversal in trading patterns. Traders have trimmed bets that the euro will weaken by almost half since early April, even as ECB President Mario Draghi pledged on May 2 to lower rates again if needed following a cut in the benchmark to 0.5 percent.

INDIA: Indian stocks climbed the most in a month after the central bank signalled slowing inflation may increase the authority’s scope to ease monetary policy. The S&P BSE Sensex advanced 1.7 percent to 20,056.25 at 10:44 a.m. in Mumbai, bound for the steepest gain since April 18. The pace of wholesale-price gains slowed to a 41-month low of 4.89 percent in April, a government report showed yesterday.

CHINA: Chinese stocks swung between gains and losses after Premier Li Keqiang signalled policy makers are reluctant to use stimulus to counter an economic slowdown. The Shanghai Composite Index added 0.1 percent to 2,219.74 at 1:33 p.m. local time after falling 0.2 percent.

Bonds – Slightly bearish in Tuesday’s market ahead of the bond auction on Wednesday. Yields up an average 6bps across the curve. Interest at the auction seems weak so it is possible that we will see some spike’s on the 30s especially.

Bills – Some selling yesterday as the market feels the squeeze in liquidity. No OMO activity from the Central bank. Rising yields brings some interest back into the market. No primary auctions this week, market is relatively stable.

Money Market – OBB and unsecured O/N rates up 100bps to 13.75% & 14.00% respectively as liquidity levels drop, market opened up N12billion. There is an OMO maturity on Thursday which will come in to boost liquidity levels in market push rates lower.

Indicative Currency Exchange Rates
Bid          Offer

EURUSD        1.2905        1.2915
GBPUSD        1.5225         1.5235
USDJPY         102.35         102.75
USDCHF        0.9693        0.9713
GBPEUR        1.1796         1.1806
USDZAR        9.2440        9.3440
USDNGN        156.75        157.50
JPYNGN         1.5315         1.5815
CHFNGN        161.71         165.71
EURNGN       202.29       206.29
GBPNGN       238.65        242.65
ZARNGN        16.96           18.96

Commodities
West Texas Intermediate crude traded near the lowest level in almost two weeks amid signs of rising supplies. WTI for June delivery was at $94.01 a barrel, down 20 cents, in electronic trading on the New York Mercantile Exchange at 3 p.m. Singapore time.

Interest rates
NIBOR (%)                       LIBOR (%)

O/N              14.2083          USD 1 month          0.1982
7 Day            14.4583          USD 2 month          0.2350
30 Day         14.6250          USD 3 month          0.2741
60 Day         14.8750          USD 4 month          0.3166
90 Day         15.1250           USD 6 month          0.4234
USD 12 month         0.6951
Y/Y Consumer Inflation March 2013 :               8.6%
FX Reserves: 10 May 2013 (USD bn)               48.601
MPR                                                                        12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

Fx
Hi               Low            Close          Prev.Close
USD/NGN
      157.50/60   157.20/30    157.20/30     157.35/45

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