Financial market update

Financial-markets27 February 2014, Sweetcrude, Lagos – Local and international financial market products and sevices update.
NIGERIA: The Managing Director, Asset Management Corporation of Nigeria, Mr. Mustafa Chike-Obi, has disclosed that the agency will sell two of the three nationalized banks this year. Chike-Obi said Enterprise Bank should be sold in June and Mainstreet Bank by October, however the agency will have to ensure this is done properly. The rescued or bridge banks are Enterprise Bank Limited (formerly Spring Bank Plc); Mainstreet Bank Limited (Afribank Plc); and Keystone Bank Limited (Bank PHB Plc).

BONDS: Yields climbed marginally by 5bps yesterday as investors continue to trade cautiously.

BILLS: Although demand momentum softened in the Treasury bills market, yields traded marginally lower for the 3rd consecutive day yesterday, declining an average of 14bps. With no OMO auction announcement, trading was varied across maturities even as demand tilted towards the short end of the curve.

MONEY MARKET: OBB and O/N closed at 11.00% and 11.25% respectively.

COMMODITIES: West Texas Intermediate crude trimmed its monthly advance after rising the most in a week. WTI for April delivery dropped as much as 36 cents to $102.23 a barrel in electronic trading on the New York Mercantile Exchange

FX: The USDNGN opened at the 165 level to an initial USD sell-off on the back of supply from the previous day’s oil sales. Market later saw a rise in rates and the pair traded within a 30 points range of 164.90 -165.20 for majority of the day before a late CBN intervention ensured rates closed at about the same level as the prior day.

CBN RDAS: CBN offered $400 million and sold $398.78 million at yesterday’s RDAS auction with 21 banks in participation. Marginal rate was maintained at 155.75 (1% commission excluded) for the 11th consecutive auction.

US: French unemployment was at a record high in January, adding to the woes of François Hollande, the president, in the run-up to municipal elections next month. The number of jobseekers increased 0.3 per cent compared with December and swelled the ranks of the unemployed in the eurozone’s second-largest economy by 8,900 people. The latest figure, published on Wednesday by the labour ministry, brings the total number of unemployed to a record 3.32m – about 11 per cent of the workforce. The total number of those seeking a full-time job, including those in part-time work, reached 4.92m.

CHINA: China’s factory activity likely expanded only slightly in February, a Reuters poll showed, dropping to an eight-month low that would indicate a modest slowdown is continuing. China’s official manufacturing purchasing managers’ index (PMI) may slip to 50.1, down from January’s 50.5, according to the median forecast of 12 economists in the poll. A reading above 50 indicates expanding activity while one below that level points to a contraction.

Macro Economic Indicators
Inflation rate (yoy) for Jan. 2014       8%
Monetary Policy Rate current            12%
FX Reserves (Bn $) as at Feb. 25      40.560

Money Market Highlights

O/N                            11.5417
7 Day                          11.8333
30 Day                       12.0833
60 Day                       12.3333
90 Day                       12.5833
USD 1 Month             0.1545
USD 2 Months           0.1945
USD 3 Months           0.2333
USD 6 Months           0.3297
USD 12 Months         0.5505

Benchmark Yields
Tenor        Maturity         Yield (%)

91 days       29-May-14        12.84
182 days     04-Sep-14        12.76
364 days     19-Feb-15        14.14
2 years        23-Apr-15        13.81
4 years        31-Aug-17        13.27
5 years        30-May-18      13.27

Indicative Currency Exchange Rates
Bid          Offer

EURUSD             1.369        1.3740
GBPUSD              1.6667      1.6717
USDJPY               102.32     102.72
USDCHF              0.8898    0.8928
GBPEUR              1.2175       1.2185
USDZAR              10.79        10.94
USDNGN             164.15      164.45
JPYNGN              1.6043     1.6543
CHFNGN             184.48     188.48
EURNGN            224.72      228.72
GBPNGN             273.59     277.59
ZARNGN              15.21         17.21

Hi             Low            Close         Prev.Close
      165.80/90   164.30/40   164.65/75    164.50/60

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