Financial market products & services update

*Financial markets.

*Financial markets.

21 January 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Nigeria’s difficulty to import refined petroleum products, particularly, Premium Motor Spirit, PMS, also known as petrol, has worsened as foreign suppliers have blacklisted Nigeria from further business until such transactions are dollar cash backed.
The development is further compounded with the deferment of about 5.4 million litres PMS daily production, as the Nigerian National Petroleum Corporation, NNPC, yesterday, announced the shutdown of Port Harcourt and Kaduna refineries. The announcement came four days after the plants were closed. NNPC, in a statement by its Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe, said the shutdown of the refineries was as a result of crude oil supply challenges arising from the recent attacks on vital crude pipelines by militants in the Niger Delta.

FIXED INCOME: An aggressive open in bonds yesterday with offers being lifted; after yields tested sub 12%, gains gradually reversed till close of trading. Auction expectations weighed in more as whispers had began to fly around. Stop rates came out late afternoon at 12.243% on the 5year and 12.50% on the new 10year. T-Bill auction prints at 4.34%, 7.89% and 10.29% yield on the 91, 182 and 364 day respectively with full allotments done on all tenors. We expect yields on long dated bills to push up today.

FX: The CBN announced its weekly Special Intervention to hold today and the intervention rate at $/NGN 197.00.

COMMODITIES: Brent oil extended its decline from the lowest close in more than 12 years as rising U.S. crude stockpiles added to a swelling global glut.
Futures slid as much as 1.2% in London after falling 3.1% Wednesday to settle at the lowest level since November 2003. Inventories rose by 4.6 million barrels last week, according to industry data, while official U.S. government figures Thursday are forecast to show a second weekly advance. It’s the third consecutive year supply exceeds demand, according to Fatih Birol, executive director of the International Energy Agency.

CHINA: China’s central bank is putting its money where its mouth is.
Having spent years outlining the move toward a price-based monetary framework and away from directly channeling credit, the People’s Bank of China is turning to market-based liquidity measures to ease a pre-Chinese New Year cash squeeze and offset capital outflows stemming from its support for the falling Yuan. Net injections totaling more than 1 trillion Yuan ($152 billion) since mid-January add about the same as a 1 percentage point cut to banks’ required reserve ratios — the traditional way to boost liquidity.

U.S: U.S. equity index futures dropped after a rally in Asian stocks reversed, pushing a gauge of global equities back to the brink of a bear market. Oil fell and the ruble tumbled to a record low. European shares rose in early trading.
Benchmark share measures in Tokyo, Shanghai and Manila slumped at least 2.8%, while Standard & Poor’s 500 Index contracts erased early gains to slide 0.6%. European shares climbed after the region’s stocks plunged the most since August on Wednesday. China’s equities fell despite a drop in money-market rates as the PBOC injected the most cash via open-market operations since 2013. The yen approached a one-year high reached Wednesday.

Macro economic Indicators
Inflation rate (Y-o-Y) for December 2015              9.60%
Monetary Policy Rate current                                 11.00%
FX Reserves (Bn $) as at January 19, 2016         28.421

Money Market Highlights

O/N                                     2.8500
30 Day                                8.0387
90 Day                                9.7336
180 Day                             11.0787
USD 1 Month                   0.4250
USD 2 Months                 0.5138
USD 3 Months                 0.6243
USD 6 Months                 0.8577

Benchmark Yields
Tenor      Maturity      Yield (%)

91d            21-Apr-16        4.04
182d          14-Jul-16         7.25
364d         05-Jan-17        8.00
2y              31-Aug-17      10.23
3y              30-May-18    10.78
5y              13-Feb-20     12.26

Indicative Currency Exchange Rates
Bid           Offer

USDNGN         197.00         199.50
EURUSD          1.0788         1.0991
GBPUSD          1.4082         1.4284
USDJPY           117.00          117.05
USDCHF          1.00045      1.0108
GBPEUR          1.2921         1.3123
USDZAR          16.6212       16.8246

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