Financial market products & services update

*Financial markets.

*Financial markets.

04 January 2016, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: President Muhammadu Buhari and two leading Ni¬gerian economists have en¬dorsed the central bank’s for¬eign exchange management policy. This is coming on the heels of strong criticism of the CBN forex policy of capital controls as against Naira de¬valuation.
The President noted dur¬ing the just-concluded Presi¬dential media chat that there was no strong conviction on the need to devalue the Naira and therefore, would not sup¬port devaluation, a position which is in alignment with the stance of the Central Bank of Nigeria. President Buhari pointed out that he needs to be convinced that there is need for the country to devalue the Naira, while stressing that Ni¬geria, as a nation, has foreign exchange policy priorities, which is to provide money to fund the projects which the CBN has highlighted and not to waste the nation’s resources on those who want hard cur¬rency to import textile and toothpick.

FIXED INCOME: Quiet end to the year 2015 as broadly expected. Few buyers seen in bonds and T-bills flattish for most of the last trading day for 2015.
Quick recap of 2015 shows a year of extremes – from bond highs of 17% to lows of 9%, O/N highs of 100% to lows of 0.5%. With Brent still expected to remain under pressure, reckon 2016 won’t smooth sailing. The market is expected to resume with some cautious to any liquidity mop.

COMMODITIES: Oil gained for a second day as Saudi Arabia cut ties with Iran a day after its embassy in Tehran was attacked to protest the Saudis’ execution of a prominent Shiite cleric. Futures rose as much as 3.5% in New York, extending Thursday’s 1.2% advance. Iran’s Supreme Leader Ayatollah Ali Khamenei warned of repercussions and protesters armed with rocks and firebombs attacked the Saudi embassy in Tehran on Saturday and set parts of the building on fire. The Middle East accounted for about 30% of global oil output in 2014, according to the Energy Information Administration.

CHINA: The worst-ever start to a year for Chinese shares triggered a trading halt in more than $7 trillion of equities, futures and options, putting the nation’s new market circuit breakers to the test on their first day.
Trading was halted at about 1:34 p.m. local time on Monday after the CSI 300 Index dropped 7%, according to data compiled by Bloomberg. An earlier 15-minute suspension at the 5 percent level failed to stop the retreat, with shares extending losses as soon as the market re-opened. Traders said the halts took effect as anticipated without any major technical problems.

U.K: More than 10,000 new homes will be built on public land through Government direct commissioning in a plan David Cameron hailed as a “huge shift”.
The Prime Minister will announce the proposal on Monday, claiming it marks the biggest of use of such a policy since Margaret Thatcher and Michael Heseltine started the regeneration of London’s Docklands in the Eighties. Downing Street said the move will see homes being built at a faster rate with smaller building companies that cannot take on big projects able to begin construction on Government sites which already have planning permission.

Macro Economic Indicators
Inflation rate (Y-o-Y) for November 2015            9.37%
Monetary Policy Rate current                               11.00%
FX Reserves (Bn $) as at December 17, 2015    29.101

Money Market Highlights
NIBOR (%)
O/N                             1.0000
30 Day                        8.9539
90 Day                       10.6781
180 Day                     12.7629
LIBOR (%)
USD 1 Month          0.4295
USD 2 Months        0.5149
USD 3 Months        0.6127
USD 6 Months        0.8461

Benchmark Yields
Tenor       Maturity     Yield (%)
91d              31-Mar-16       3.47
182d            30-Jun-16      7.22
364d            15-Dec-16      8.46
2y                 31-Aug-17      8.89
3y                30-May-18     9.46
5y                13-Feb-20    10.86

Indicative Currency Exchange Rates
                           Bid        Offer
USDNGN       197.00      199.50
EURUSD        1.0836     1.1039
GBPUSD        1.4657      1.4859
USDJPY         118.84      118.87
USDCHF        0.98835  0.9986
GBPEUR        1.3391      1.3595
USDZAR        15.5387   15.7421

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