Financial market products & services update

Financial chart, currency notes and a compass.

Financial chart, currency notes and a compass.

10 April 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: In an effort to forestall another build up of non-performing loans (NPLs) in the banking industry, the Central Bank of Nigeria (CBN) and deposit money banks (DMBs) in the country yesterday disclosed plans to publish the names of new bank debtors.

In addition, the central bank said it might be compelled to stop such loan defaulters from accessing FX through the interbank FX market.

The Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, who disclosed this while briefing journalists at the end of the 321st Bankers’ Committee meeting in Lagos, said the names of those she described as “chronic debtors” would be published alongside the companies they represent, their directors, subsidiaries and other associates.

FX: Yesterday saw some decent sale from the CBN that cleared some outstanding demand. Estimated amount; $150m-$200m and intervention rate maintained at $/NGN 197.00. Some offshore inflow reported, mostly directed at the equities market.

Firm foot on T-bills as long end adjusts to Wednesday’s auction results. In bonds, one trader selling a particular paper leads to five or more dealers scrambling to adjust all quotes across the bond curve, causing even wider moves. We traded high 14% with some papers on the 15% handle just before close of market.

MARKET MONEY: Money market still fairly liquid (in excess of NGN200bn). CRR debit yesterday, actual figure debited by CBN will be confirmed today.

EUROPE: Quantitative easing may be helping Europe achieve its economic targets, but it’s also undermining the long-term viability of the euro by tarnishing its allure as a global reserve currency.

Central banks cut their euro holdings by the most on record last year in anticipation of losses tied to unprecedented stimulus. The euro now accounts for just 22% of worldwide reserves, down from 28% before the region’s debt crisis five years ago, while dollar and yen holdings have both climbed, the latest data from the International Monetary Fund show.

USA: The dollar was set for its first weekly gain in a month as investors focused on prospects for the Federal Reserve to increase interest rates as global peers ease policy.

A gauge of the greenback set its highest close in three weeks Thursday as traders raised bets that U.S. borrowing costs will climb this year, even as some Fed officials urge waiting until 2016. It hit a one-month low at the end of last week after a U.S. government report on nonfarm payrolls undershot even the most bearish of economists’ estimates.

COMMODITIES: Oil headed for the longest stretch of weekly gains since February 2014 as Iran disputed the framework for a nuclear deal with world powers that would allow the OPEC member to boost crude exports.

Futures were little changed in New York, and up 3.7% in its fourth weekly advance. Sanctions against Iran must be lifted as soon as an agreement is signed, the nation’s supreme leader said Thursday, contradicting U.S. and French descriptions of an accord announced on April 2. Prices are steadying amid stronger global demand, according to Ibrahim al-Muhanna, an adviser to Saudi Arabia’s oil minister.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   8.40%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     29.614

Money Market Highlights
O/N                                  18.4167
30 Days                           15.0722
90 Days                           16.0793
180 Days                         16.8703

USD 1 Month                 0.1800
USD 2 Months               0.2285
USD 3 Months               0.2759
USD 6 Months               0.4034
USD 12 Months             0.6944

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           02-Jul-15          13.41
182d         01-Oct-15          14.04
364d        24-Mar-16         13.43
2yr            27-Apr-17          14.86
3yr            29-Jun-19         14.91
5yr            13-Feb-20         14.89

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG         197.65       198.35
EURUSD      1.o532       1.0734
GBPUSD       1.4584       1.4786
USDJPY        120.47       120.50
USDCHF       0.97285    0.9830
GBPEUR       1.3710       1.3914
USDZAR      11.8755     12.0789
JPYNGN         N/A         N/A
CHFNGN        N/A         N/A
EURNGN        N/A         N/A
GBPNGN         N/A         N/A
ZARNGN         N/A         N/A

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