Financial market products & services update

*Financial markets.

*Financial markets.

07 January 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Despite its prevailing economic crunch, the IMF yesterday, rated Nigeria’s economy high in the emerging market segment.
Speaking after meeting with bank executives and the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, in Abuja, Managing Director of the Fund, Ms Christine Largade, advised the Federal Government to put solid economic measures in place to strengthen the financial sector and to channel more resources to grow the real sector of the economy and the Small and Medium Enterprises (SMEs).
She disclosed that the IMF has had a series of meetings with the representatives of the banking industry and came out with strategic mechanism for sustaining the nation’s banking sector.

FIXED INCOME: T-Bill auction prints at yields of 4.04%, 7.24%, 8.75% on the 91, 182 and 364 days respectively. As bids tested for higher yields, rates were managed with only N55.84bn sold on the 1year vs N85.84bn offered. Balance of N30bn was then issued as 91 day T-bill.
In secondary market, T-bill market felt well bid especially on the March bills. On the other hand, it was more of the same in bonds – some selloff at open and then followed by some reversal from about midday. Overall, activity was skewed to the sellers in bonds.

FX: The CBN announced its special auction for today the 7th of January 2016. This is going to be the first for the year. Offering rate at $/NGN 197.00

COMMODITIES: Turmoil in China’s markets is pushing oil closer to $30 a barrel.
Futures slid as much as 4.3% in London on concern the economic slowdown in the world’s biggest commodity consumer is worsening. China’s central bank reduced the onshore Yuan’s fixing to the lowest since March 2011, triggering a selloff that led to the closure of Chinese stock exchanges. Brent oil will slump to $30 in the next 10 days, according Nomura Holdings Inc.

CHINA: China trading halted for the second day this week. The worst start for Chinese markets in two decades showed no signs of letting up after the central bank cut its Yuan reference rate by the most since August, sparking a selloff in stocks that forced the $6.6 trillion market to shut early.
China’s securities regulators called an unscheduled meeting after the CSI 300 Index plunged 7.2%, triggering a full-day trading suspension less than 30 minutes after exchanges opened. The onshore Yuan weakened 0.6% versus the dollar to a five-year low after the People’s Bank of China cut its reference rate on Thursday for an eighth straight day. The currency rallied in offshore trading amid suspected intervention.

U.K: Chancellor of the Exchequer George Osborne will say a “dangerous cocktail” of global threats faces the British economy this year as he warns that complacency is starting to take hold.
In a speech in Wales on Thursday, Osborne will identify the slowing economies of China, Brazil and Russia, the slide in commodity prices and escalating political tensions in the Middle East as potential hazards.
Osborne begins the new year amid signs that the U.K. economy is losing momentum with exports stagnating and domestic demand, the engine of growth since the financial crisis.

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          28.957

Money Market Highlights

O/N                               1.5000
30 Day                          8.4203
90 Day                          9.8291
180 Day                       11.2807
USD 1 Month              0.4220
USD 2 Months            0.5148
USD 3 Months            0.6171
USD 6 Months            0.8512

Benchmark Yields
Tenor      Maturity      Yield (%)

91d             07-Apr-16       4.17
182d          14-Jul-16         7.67
364d          15-Dec-16       8.45
2y               31-Aug-17       9.45
3y               30-May-18     9.97
5y               13-Feb-20      11.26

Indicative Currency Exchange Rates
Bid          Offer

USDNGN             197.00         199.50
EURUSD              1.0692        1.0894
GBPUSD              1.4514         1.4716
USDJPY               118.12         118.15
USDCHF             1.00005      1.0103
GBPEUR             1.3440         1.3644
USDZAR             15.8194       16.0234

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