Financial market products & services update

*Financial markets.

*Financial markets.

11 January 2016, Sweetcrude, Houston —Local and international financial market products and services update.
NIGERIA: BUA Group, one of Nigeria’s largest foods and infrastructure conglomerates, has announced the divestment of its flour business to Olam International, a leading agri-business company operating in several countries, in a $275 million deal.
Speaking at the signing ceremony over the weekend, billionaire industrialist and founder, BUA Group, Mr. Abdulsamad Rabiu, said: “This signing marks a major milestone in our medium-term strategy. Over the years, we have run one of the largest and most efficient flour milling businesses in Nigeria and are confident in the value it will add to the buyer’s operations.
“Our group’s strategic focus will now be to diversify to business areas with greater potential for exports where the sourcing and utilization of foreign exchange is less and most of the materials needed for production can be sourced locally whilst also positioning our current line of foods and infrastructure businesses for market leadership.”

FIXED INCOME: Demand filtered back into both the bond and T-bill market at the close of last week as the refund from the FX auction brought in some respite. Bulk of this demand was from locals and was on the March 2024s (N11.5bn traded). Q1 bond auction calendar was released late on Friday and the Calendar shows significant increase in borrowing (approximately 81%) and new issuances – new 10year from Jan auction and new 20 year from March auction. Whispers of this had filtered into the market and fuelled the selloff seen last week but we still expect a weak start this week.
FX: The CBN had its first special intervention last week and the offered rate was at $/NGN 197.00. The demand for USD continues to surpass its supply.

COMMODITIES: Investors hoping a Saudi Arabian Oil Co. IPO will provide a chance to buy a stake in the world’s largest crude producer may have to wait. The company says one option is to sell shares in its refining assets rather than the parent.
While that would lock private capital out of the world’s biggest oil fields, it still offers an immense global business with plants spread from Louisiana to Japan, processing more than 3.1 million barrels a day.

ASIA: Asian stocks extended last week’s global rout, oil dropped and the South African rand led a slump in emerging-market currencies as China-fueled risk aversion stoked demand for government bonds. The Yuan gained as the central bank kept its reference rate steady.
The rand tumbled 9% to a record low in offshore trading before paring its slide. Oil sank to its lowest since 2003 and copper futures declined. Investments regarded as offering more safety found support, with sovereign yields falling in Japan, Australia and New Zealand.

U.S: U.S. index futures slid, signaling little respite for the Standard & Poor’s 500 Index after the measure’s worst week since 2011, as concern about turmoil in China’s markets deepened. March contracts on the S&P 500 slid 0.5% to 1,901.25 as of 9:53 a.m. in Shanghai, as China’s equity gauges tumbled and the nation’s central bank kept the daily Yuan fixing stable for a second day. With Japan shut for a holiday Monday, futures on the Nikkei 225 Stock Average slumped as much as 3.1% in Singapore amid demand for the yen as a haven.

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      28.931

Money Market Highlights

O/N                               1.2917
30 Day                          8.1071
90 Day                          9.2819
180 Day                      10.8948
USD 1 Month              0.4238
USD 2 Months            0.5149
USD 3 Months            0.6211
USD 6 Months            0.8508

Benchmark Yields
Tenor      Maturity        Yield (%)

91d            07-Apr-16         4.04
182d         14-Jul-16            7.86
364d        15-Dec-16           8.14
2y             31-Aug-17          10.89
3y             30-May-18        11.15
5y             13-Feb-20         11.54

Indicative Currency Exchange Rates
Bid         Offer

USDNGN    197.00        199.50
EURUSD     1.0815        1.1017
GBPUSD     1.4430        1.4632
USDJPY      117.34         117.31
USDCHF     0.98915     0.9993
GBPEUR     1.3209       1.3413
USDZAR     16.6356     16.8387

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