Financial market products & services update

Financial markets

Financial markets

07 July 2015, Sweetcrude, Abuja – Local and international financial market products and services update.

NIGERIA: Nigeria’s government plans to run down its oil savings to offset revenue shortfalls and pay debt, such as salaries for state workers. The Excess Crude Account, which has a balance of about $2 billion, will be drawn down by $1.7 billion to allocate to the federal, state and local arms of the government, Accountant- General Ahmed Idris told reporters on Monday in the capital, Abuja. Nigeria accumulates revenue in the ECA when the oil price exceeds the benchmark estimated in the budget. Those savings have dwindled from $21 billion in 2008, according to estimates from the International Monetary Fund.

FIXED INCOME: Some buying on the dips from PFAs after we saw some panic action yesterday in bonds. We continue to drift sideways but overall weaker. Bond yields closed anywhere from 10 – 15bps wider. Brent on the $57 handle could cause even more pressure on Nigeria rates if it continues to slide lower. Same story in bills. Short end moving another 100bps with bills < 30days trading average 7% yield. O/N rates closed unchanged at 8% with liquidity in money market in excess of N200bn.

FX: No significant change in the market as the two way quote FX market remains shut. Special auction funds remained at 195.95/196.95.

COMMODITIES: Brent oil slid below $60 a barrel for the first time since April amid mounting concern about economic stability in Europe and Asia. Brent for August settlement declined $2.68, or 4.4 percent, to $57.64 a barrel on the London-based ICE Futures Europe exchange, at 12:52 p.m. in New York. Futures dropped as much as $2.81 to $57.51, the lowest since April 13.

INDIA: Indian stocks advanced, with the benchmark gauge trading near a 12-week high, amid speculation a drop in crude prices will benefit the oil-importing nation. The S&P BSE Sensex rose 0.2 percent to 28,266.49 at 10:41 a.m. in Mumbai, poised for its highest close since April 17. U.S. oil futures slumped 7.7 percent Monday, the most since Feb. 4, and are trading near the lowest levels since April amid a deepening debt crisis in Greece and indications a glut is persisting. India imports about 80 percent of its crude oil. A decline in crude would give the Indian government more room to boost growth through spending on infrastructure.

U.K: U.K. industrial production unexpectedly rose in May as oil and gas output surged the most in more than a year, offsetting a drop in factory output. Total production rose 0.4 percent from April, when it increased 0.3 percent, the Office for National Statistics said in London on Tuesday. Oil and gas extraction rose 7.3 percent, the most since Feb. 2014. Factory output unexpectedly fell 0.6 percent. The increase in oil production may have been due to a tax cut announced in March, the statistics office said. The drop in manufacturing highlights the struggle facing producers as the Greek crisis hangs over the euro region and the strong pound weighs on exports. With factory output still 4.6 percent below its pre-recession peak, Britain is at risk of a “two-tier” economy with growth increasingly depending on consumers, the British Chambers of Commerce said in a report today.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   9.00%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     29.157

Money Market Highlights
O/N                                   5.1250
30 Days                           14.1547
90 Days                           15.5823
180 Days                         16.3288

USD 1 Month                 0.1865
USD 2 Months               0.2311
USD 3 Months               0.2842
USD 6 Months               0.4447
USD 12 Months             0.7618

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           24-Sep-15         11.89
182d         07-Jan-16         13.87
364d        02-Jun-16         14.44
2yr            27-Apr-17         14.83
3yr            29-Jun-19        14.94
5yr            13-Feb-20        14.91

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         196.00      199.45
EURUSD       1.0959      1.1161
GBPUSD       1.5453      1.5655
USDJPY        122.59      122.62
USDCHF       0.93905   0.9492
GBPEUR       1.3961      1.4165
USDZAR      12.3099     12.5133
JPYNGN      162.2797   162.3803
CHFNGN       213.02     214.71
EURNGN       222.96    224.32
GBPNGN        306.63   308.02
ZARNGN          15.09      17.01

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