Financial market update

Financial markets 104 April 2014, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, said the World Bank’s “extreme poor nation’’ rating of Nigeria was based on the large number of poor people living in the country. Okonjo-Iweala made the clarification when she interacted with journalists in Abuja yesterday. World Bank President, Dr Jim Kim, on Wednesday in Washington, said Nigeria was among the world’s extremely poor countries. The other countries that were also rated alongside Nigeria were India, China, Bangladesh, Democratic Republic of Congo, Indonesia, Pakistan, Tanzania, Ethiopia and Kenya. Kim had stated that two-thirds of the world’s extreme poverty is concentrated in just five countries: India, China, Nigeria, Bangladesh and the Democratic Republic of Congo.

FIXED INCOME: Bullish run in the bond market was sustained for the fourth consecutive day this week as yields compressed further, though not as aggressive as Wednesday’s. Trading was more focused on the short dated papers while the long end of the curve traded flat. Bills market traded relatively flat as we saw mixed performance across the curve. Yields rose slightly by 2bps to 13.11%. As expected, the CBN announced the fourth OMO auction this week, offering NGN50billion on the 112DTM (14th August 2014), however no sale was made. O/N and OBB rate closed flat at 10.75% and 10.50% respectively.

COMMODITIES: West Texas Intermediate was stable on signs of slower demand. WTI for May delivery declined as much as 55 cents to $99.07 a barrel in electronic trading on the New York Mercantile Exchange.

FX: USDNGN further strengthened intraday yesterday, trading a low of 163.30/40 as the anticipation of significant dollar sales from the state owned Oil Company pushed rates south to continue Wednesday’s bearish momentum. Market had a spike in volatility at open, with rates trading about 70 points range in the first few minutes, before settling at the 163.45-65 range, with the 163 level being the new range for the pair given the recent boost in USD liquidity. Some late demand pushed rates further up to close at about previous level of 163.78/88.

US: The U.S. economy likely created jobs at the fastest pace in four months in March as it shifted into a higher gear after being held back by a brutally cold winter. Employers are expected to have added 200,000 new jobs to their payrolls last month after adding 175,000 in February, according to reports. The jobless rate likely dipped one-tenth of a percentage point, returning to the five-year low of 6.6 percent reached in January.

INDIA: India’s high-profile central bank governor is likely to come under political pressure to retreat from his hawkish stance on inflation if opposition leader Narendra Modi wins power in the country’s general election. Strategists in Modi’s Bharatiya Janata Party (BJP), confident that his jobs-first policy pitch will secure a strong voter mandate, suggest that they would prefer to have one of their own at the helm of the Reserve Bank of India (RBI).

Macro economic Indicators
Inflation rate (yoy) for Feb. 2014              7.7%
Monetary Policy Rate current                     12%
FX Reserves (Bn $) as at Mar. 28         37.803

Money Market Highlights

O/N                             10.7500
7 Day                           11.0000
30 Day                         11.3750
60 Day                         11.7083
90 Day                         11.9583
USD 1 Month              0.1525
USD 2 Months            0.1928
USD 3 Months           0.2304
USD 6 Months           0.3280
USD 12 Months          0.5551

Benchmark Yields
Tenor               Maturity               Yield

91d                      03-Jul-14                 12.94
182d                   04-Dec-14                13.26
364d                  05-Mar-15                 14.01
2y                       23-Apr-15                 13.55
4y                       31-Aug-17                 12.93
5y                       30-May-18               12.98

Indicative Currency Exchange Rates
Bid           Offer

EURUSD     1.3649        1.3751
GBPUSD      1.6533       1.6635
USDJPY      103.845     103.955
USDCHF     0.8877       0.8980
GBPEUR     1.1931         1.2033
USDZAR     10.5445    10.7505
USDNGN    163.48       164.18
JPYNGN      1.5707      1.7207
CHFNGN     187.26     192.86
EURNGN    227.56      232.76
GBPNGN     273.06     278.26
ZARNGN      14.32       18.12

                            Hi              Low           Close       Prev.Close
USD/NGN  164.05/15   163.30/40   163.78/88   163.90/00

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