Financial market products & services update

*Financial markets.

*Financial markets.

12 November 2015, Sweetcrude, Lagos – Local and international final markets products and services update.
NIGERIA: Nigeria will amend its long-awaited petroleum industry bill (PIB) and may remove the taxation element to speed its passage, the country’s new petroleum minister said on Wednesday.

Nigeria’s oil bill has been in the works for a decade. It is meant to change everything from taxes to overhauling the NNPC, environmental rules and revenue sharing, but its comprehensive nature has caused disputes between lawmakers. “There is a need to look at the PIB as it was submitted to the sixth assembly and try and tinker with that a bit,” Emmanuel Ibe Kachikwu said on Wednesday after being appointed petroleum minister, or junior oil minister.
“There are all kinds of issues … one of those is whether we need to yank out the fiscal terms and develop them into a different law relying on existing fiscal laws and amend those,” he said.

FIXED INCOME: Yields on the short-dated debt have plunged recently due to surging liquidity in the banking system. Despite the moves lower in bonds, street seemed a little cautious because of the auction. Sellers emerged but demand was still evident. Strong bond auction prints as expected – 5year at 10.249% yield (-286bps) and 10year at 10.01% yield (-386bps). Overall, liquidity seemed better as bid/offer spreads starting to narrow. Expect some patchy trading today as there will be some initial knee-jerk reaction to bond auction results. In T-bills, short dated paper (10 Dec 15) quoted and traded sub 1%.

FX: The CB maintained the Special auction rate at 196.98 yesterday after the Naira appreciated by 2kobo on Monday. 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 traded near the lowest close in more than two months before U.S. government data forecast to show crude stockpiles expanded for a seventh week in the world’s biggest consumer.
Futures were 0.6% higher in New York Thursday after sliding 10% since Nov. 3. Inventories probably increased by 1.3 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report. That would keep supplies more than 100 million barrels above the five-year seasonal average.

CHINA: China’s broadest measure of new credit fell in October, adding to evidence six central bank interest-rate cuts in a year haven’t spurred a sustained pick up in borrowing.
Aggregate financing was 476.7 billion Yuan ($75 billion), according to a report from the People’s Bank of China on Thursday. That compared to a projection by economists for 1.05 trillion Yuan and September’s reading of 1.3 trillion Yuan.
The data underscore the government’s challenge to spur an economic recovery even after boosting fiscal stimulus and continued monetary easing. Authorities have said they won’t tolerate a sharp slowdown in the next five years.

E.U: The ECB has yet to decide on further easing and isn’t committed to doing so next month, Executive Board member Benoit Coeure said.
“The decision isn’t taken,” he said in an interview published in Le Figaro newspaper that was confirmed by his office. “The debate is open.”
Coeure said the recovery in the euro area is “on track.” Data on Friday may show economic growth of 0.4% in the third quarter, matching the pace of the previous three months. Purchasing managers’ surveys indicate expansion continued in the current quarter. ECB President Mario Draghi, who will testify in the European Parliament on Thursday, has indicated that policy makers may ramp up stimulus again at their meeting next month, though not every Governing Council member has voiced support.

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                          12.7190                                                                                                   90 Days                          14.4483
180 Days                        16.2312

USD 1 Month                  0.1955
USD 2 Months                0.2760
USD 3 Months                0.3561
USD 6 Months                0.5917                                                                                               USD 12 Months              0.9248

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           11-Feb-16          01.76
182d         05-May-16        03.87
364d         20-Oct-16         04.30
2yr            31-Aug-17         07.51
3yr            30-May-18        08.38
5yr            13-Feb-20         10.16

Indicative Currency Exchange Rates
                         Bid           Offer
USDNG         197.50         199.48
EURUSD       1.0644        1.0846
GBPUSD       1.5052         1.5264
USDJPY        122.96         122.99
USDCHF       0.99885      1.0090
GBPEUR       1.4009          1.4214
USDZAR      14.0931        14.2979
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

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