Financial market products & services update

*Financial markets.

*Financial markets.

19 November 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: President Muhammadu Buhari, on Wednesday sent a supplementary budget of N465,636,926,857 to the two chambers of the National Assembly for appropriation. The President also proposed an upward review of the initial N882.1bn borrowing limit in the 2015 budget to N2.103tn. Buhari, in a letter addressed to the Senate President, Bukola Saraki, and the Speaker of the House of Representatives, Yakubu Dogara, said N413.363bn out of the N465.6bn supplementary budget proposal had been earmarked for the payment of subsidy on petrol. Also included in the recurrent component was N10.6bn for the payment of outstanding severance gratuity and allowances to members of the National Assembly and their aides. Others captured under the recurrent component were the Nigerian Army (N17bn); Nigerian Air Force (N8bn); and another N4bn set aside for “Nigerian Army’s outstanding balance from 2015 second quarter.”

FIXED INCOME: Market saw a reversal in the selling trend yesterday, the shorter end on the tbill curve was well bid and market were better buyers of bonds too. Tbill yields dropped 51bps and bond yields dropped 24bps. The average yields are now 4.29% and 11.41% for bills and bonds respectively. Tbill auction result showed decent subscription size, but at expected market wanted higher stop rates. CBN sold 32bn 91-day at 5.41%, 22bn 182- day at 7.52% and 64bn 364-day at 9.29%. O/N closed at 1%.

USA: US Federal Reserve officials appear more confident that the economic conditions needed to trigger an interest rates rise are near. Minutes of the Fed’s October meeting showed that the conditions may “well be met” by the next gathering in December. Fed officials saw the jobs market improving and inflation starting to move towards their 2% annual target. The US looks to have weathered turbulence in global markets without signs of stress, the minutes said.

EUROPE: The European Central Bank’s decision on whether to inject fresh stimulus into the euro area next month may swing on a judgment over what’s causing a slide in oil prices. Both ECB President Mario Draghi and Executive Board member Peter Praet, the institution’s chief economist, have signaled concern that cheaper energy is a warning sign. While tumbling prices have until now been seen as a consequence of oversupply, to the benefit of companies and households, officials are now considering if they increasingly reflect a deteriorating economic outlook.

COMMODITIES: Oil traded near the lowest level in almost three months as U.S. government data showed crude stockpiles expanded for an eighth week in the world’s biggest consumer. WTI for December delivery, which expires Friday, was at $40.79 a barrel on the New York Mercantile Exchange, up 4 cents.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   9.30%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     30.349

Money Market Highlights
O/N                                  1.0033
30 Days                          12.7746                                                                                     90 Days                          14.4616
180 Days                        15.3685

USD 1 Month                  0.2025
USD 2 Months                0.2825
USD 3 Months                0.3671
USD 6 Months                0.6018                                                                                     USD 12 Months              0.9308

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           18-Feb-16          01.94
182d         26-May-16        06.16
364d         20-Oct-16         06.93
2yr            27-Aug-17         09.04
3yr            29-Jun-19         11.67
5yr            13-Feb-20         12.07

Indicative Currency Exchange Rates
                         Bid           Offer
USDNG         197.60         198.30
EURUSD      1.0578          1.0780
GBPUSD       1.5105          1.5309
USDJPY        123.17          123.20
USDCHF       0.01295      1.0231
GBPEUR       1.4197          1.4401
USDZAR      14.0055        14.2089
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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