Financial market products & services update

*Financial markets.

*Financial markets.

15 December 2015, Sweetcrude, Houston – Local and international financial market products and services update.

NIGERIA: World Bank has projected that Nigeria’s economic outlook would remain difficult in the short run due to the persistent low price of crude oil in the international market. The World Bank in its Nigeria Economic Report 3, released recently in Abuja, stated that for the country’s economy to survive within this period, fiscal adjustment will be of critical importance, warning that even if oil prices recover, government oil revenues should continue to decline in the medium term relative to the size of the Nigerian economy.

FX: CBN intervention rate remained at $/NGN 197.00.

FIXED INCOME: Headline inflation edged higher to 9.4% y/y in November from 9.3% in October. This was not enough to spur activity in the fixed income market. Bonds and bills started the week continuing last week’s dull tone. There were a few sellers in bonds but overall still quiet. Bill yields remained relatively flat for most of the day. Money market conditions remain unchanged.

SOUTH AFRICA: South Africa’s new Finance Minister Pravin Gordhan said he’ll shore up public finances to regain market trust and show credit-rating companies the government is serious about managing debt. On Sunday, Gordhan was named the country’s third finance minister in less than a week, replacing little-known lawmaker David van Rooyen, who was sworn in Thursday following the dismissal of Nhlanhla Nene from the post. The surprise decision to fire Nene sent the rand plunging to record lows and fueled speculation the country’s bonds may be cut to junk.

CHINA: China’s Yuan weakened for an eighth day, the longest run of losses since June, on increased capital outflows and speculation that the central bank is guiding the currency lower to help an economy growing at the slowest pace in 25 years. The People’s Bank of China cut the yuan’s reference rate for the seventh day in a row after a barometer of capital flows posted the second-biggest drop on record. This followed the authority’s move on Friday to play down the currency’s recent losses by saying its performance shouldn’t be measured against the dollar alone. While the PBOC was seen propping up its exchange rate in the past few months, it has allowed declines on all but one day since winning International Monetary Fund reserve status on Nov. 30.

COMMODITIES: Oil held gains after rebounding from the lowest price since February 2009 as the U.S. Congress sought to advance on a deal to allow unfettered crude exports for the first time in 40 years. WTI for January delivery was at $36.14 a barrel on the New York Mercantile Exchange, down 17 cents.

Macro Economic Indicators
Inflation rate (Y-o-Y) for November 2015              9.40%
Monetary Policy Rate current                                  11.00%
FX Reserves (Bn $) as at December 11, 2015       29.5180

Money Market Highlights

O/N                            0.9917
30 Day                       9.3218
90 Day                      11.1704
180 Day                    13.1351
USD 1 Month          0.3305
USD 2 Months        0.4240
USD 3 Months        0.5120
USD 6 Months        0.7465

Benchmark Yields
Tenor      Maturity      Yield (%)

91d             3-Mar-16        1.01
182d          2-Jun-16         5.12
364d          1-Dec-16         5.85
2y             27-Apr-17         7.23
3y             29-Jun-19        9.76
5y             13-Feb-20        11.00

Indicative Currency Exchange Rates
                               Bid         Offer
USDNGN          196.00        199.50
EURUSD          1.0927         1.1129
GBPUSD          1.5048         1.5250
USDJPY           120.95         120.98
USDCHF          0.97695      0.9871
GBPEUR          1.3635         1.3839
USDZAR           14.9514      15.1548

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