Financial market products & services update

*Financial markets.

*Financial markets.

09 November 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Chairman, Nigeria Agribusiness Group (NABG), Mr. Sani Dangote, said at the weekend that the group was in firm support of the Central Bank of Nigeria (CBN) foreign exchange policy restriction as well as the refusal of the CBN to devalue the naira as is being suggested by international finance institutions and multi-lateral agencies.
The CBN in the past few months has been under pressure over the decision to ban sourcing of foreign exchange for the importation of 41 items for which Nigeria has comparative advantage as well as its resistance to international pressure for the devaluation of the nation’s currency.
The NABG chairman stressed that his group believes that the CBN forex policy especially as it affects commodities like tomato puree, rice, palm oil and other agricultural produce is the correct step to save the nation’s economy from impending crisis and return it to the path of sustainable growth.

FIXED INCOME: Strong rally was seen last week and Yields kept testing year lows in both bonds and T-bills. Prices gapped further in bonds despite some attempted profit taking. Street pricing in auction expectations fuelling the rally. Also, looks like some players beginning to price in probability of a rate cut at the November MPC.

FX: The CBN quoted the special auction rate at 197.50 yesterday. Gross FX reserves on a 30 day moving average now at $30.308bn (5th Nov 2015) from $30.192 as at 30 Oct 2015.

COMMODITIES: Oil halted its three-day decline near $45 a barrel as Saudi Arabia sees low prices spurring demand growth.
Futures rose as much as 1.2% in New York after falling 7.5% through the three days ended Friday. Demand will soon reflect the “attractiveness” of current price levels, according to Ali al-Naimi, Saudi Arabia’s oil minister. Money managers’ net-long position in West Texas Intermediate rose the most in seven months in the week ended Nov. 3, data from the U.S. Commodity Futures Trading Commission showed.
Oil has slumped 42% the past year amid speculation the global oversupply will persist as the Organization of Petroleum Exporting Countries continue to pump more than their collective quota.

INDIA: India’s rupee fell the most since August, while stocks and bonds retreated, on concern an election defeat for Prime Minister Narendra Modi’s party in the country’s third-most-populous state will hamper his ability to push through policies to strengthen the economy.
The rupee declined 0.9% to 66.3475 a dollar as of 12:13 p.m. in Mumbai, prices from local banks compiled by Bloomberg show. The S&P BSE Sensex index dropped 1.2%, headed for its biggest loss since Sept. 22. The Yield on India’s 10-year government bonds rose four basis points to 7.72%, the highest since Sept. 28, according to prices from the Reserve Bank of India’s trading system.

U.S The blowout U.S. jobs report for October means the Federal Reserve may be weeks away from raising interest rates. For U.S. savers earning next to nothing on $2.6 trillion of money-market mutual funds, the move will barely register.
The reason is that there’s an unprecedented shortfall in the safest assets, especially Treasury bills — a mainstay of money funds and traditionally the government obligations that are most sensitive to changes in Fed policy. The shortage means some key money-fund rates will probably remain near historic lows even if the central bank increases its benchmark from near zero next month.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   9.40%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     30.308

Money Market Highlights
O/N                                 01.0000
30 Days                          13.1161                                                                                                   90 Days                          14.9446
180 Days                        16.5550

USD 1 Month                  0.1945
USD 2 Months                0.2600
USD 3 Months                0.3414
USD 6 Months                0.5708                                                                                             USD 12 Months              0.9012

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           04-Feb-16          03.12
182d         05-May-16         05.17
364d         20-Oct-16         06.14
2yr            31-Aug-17         10.28
3yr            30-May-18        10.71
5yr            13-Feb-20         11.03

Indicative Currency Exchange Rates
                         Bid           Offer
USDNG         197.50         199.50
EURUSD       1.0669        1.0874
GBPUSD       1.4975         1.5176
USDJPY        123.39         123.42
USDCHF       0.99575      0.0059
GBPEUR       1.3894          1.4098
USDZAR      14.1077        14.3118
JPYNGN      161.8497      161.9503
CHFNGN       204.99       206.68
EURNGN       217.24        219.60
GBPNGN        309.40      310.79
ZARNGN          14.69         16.61

About the Author