Financial market update February 2014, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: Nigeria’s central bank said it has adequate reserves to keep defending the naira as the slumping currency prompted a sell-off of the country’s stocks, with the all-share gauge posting the world’s worst performance on Friday. Sarah Alade, Central Bank of Nigeria Deputy Governor reiterated the need to defend the currency to prevent volatility and said the CBN will intervene whenever they see the need to do so.

BONDS: More selloff was seen at Friday’s session as yields rose aggressively. We continue to see a lot of impact on short dated maturities as the 2015s rose by 53bps. Liquidity dried up towards the close of Friday trading and yields closed up day on day between 28-56bps across the curve.

BILLS: The CBN on Friday offered NGN50bn OMO bills on the 146D. Total subscription was NGN12bn approximately and nothing was sold.

MONEY MARKET: OBB and ON rate spiked higher on Friday by 175bps to 13.50% and 13.75% respectively.

FX: There were gains for Naira on Friday with another CBN intervention helping to restore some calmness after another volatile move by the USDNGN. The pair, still under pressure, traded a high of the 164 level before CBN intervened to crash rates to the 161 level for the first time this month. Market eventually closed at the 162 level.

COMMODITIES: West Texas Intermediate crude rose for the first time in three days as an improved U.S. economy bolstered the demand outlook in the world’s biggest oil consumer. WTI for March delivery increased as much as 74 cents to $101.04 a barrel in electronic trading on the New York Mercantile Exchange.

US: Prices on U.S. imported goods rose by slightly more than expected in January, data showed on Friday, yet underscoring how inflationary pressures remained largely dormant. The Labour Department reported that import prices ticked up by 0.1 percent last month, the third consecutive month of gains. Economists in a consensus survey expected January import prices to fall by 0.2 percent, against the prior month’s unchanged reading.

JAPAN: Japan’s economy grew at a much slower pace than expected at the end of last year, posing a challenge to policymakers as massive government stimulus efforts showed few signs of sparking momentum in consumption and exports. The data showing disappointing private consumption, business investment and shipments came as the Bank of Japan met to review its ultra-easy policy, with markets widely expecting the central bank to hold firm to the current pace of bond-buying stimulus.

Macro Economic Indicators
Inflation rate (yoy) for Jan. 2014       8%
Monetary Policy Rate current           12%
FX Reserves (Bn $) as at Feb. 13    41.907

Money Market Highlights

O/N                       11.2917
7 Day                     11.7083
30 Day                  12.0833
60 Day                  12.3750
90 Day                  12.6250
USD 1 Month       0.1545
USD 2 Months    0.1988
USD 3 Months    0.2359
USD 6 Months    0.3390
USD 12 Months  0.5508

Benchmark Yields
Tenor          Maturity        Yield (%)

91 days         15-May-14        12.61
182 days      07-Aug-14        12.81
364 days      05-Feb-15        13.74
2 years         23-Apr-15         13.46
4 years         31-Aug-17         13.41
5 years         30-May-18        13.41

Indicative Currency Exchange Rates
Bid          Offer

EURUSD          1.3714        1.3764
GBPUSD          1.6790        1.6840
USDJPY           101.59        101.99
USDCHF          0.8905      0.8935
GBPEUR          1.2243       1.2253
USDZAR          10.808      10.958
USDNGN         162.50       162.80
JPYNGN          1.5996       1.6496
CHFNGN         182.48      1.8648
EURNGN         222.85      226.85
GBPNGN          272.84      276.84
ZARNGN          15.04         17.04

Hi              Low             Close        Prev.Close
164.55/65   161.20/30  162.10/20   163.00/10

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