01 February 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Nigeria’s government is in talks for concessionary loans worth $3.5 billion from the World Bank and African Development Bank to help finance a planned record budget this year, Finance Minister Kemi Adeosun said.
While discussions are going on, a formal request hasn’t yet been made to the World Bank for $2.5 billion and the AfDB for $1 billion, Adeosun said by telephone on Sunday. The government plans to tie them to specific capital projects, she said. A request hasn’t been made for assistance from the IMF.
President Buhari’s government is seeking to spend its way out of an economic crisis triggered by a collapse in oil prices.
FIXED INCOME: Bond market opened unchanged to a couple bps tighter on Friday. Demand came in trickles on the Feb 2020s and March 2024s. OMO auction announcement and money market long N460.52bn because of FAAC inflows worked against the demand. O/N rate inched up to close at 4% because the auction is expected to drain more liquidity. T-Bill yields moved +19bps because of that also to close at 6.16%.
FX: The CBN weekly Special auction for last week held on Thursday and rate was maintained at $/NGN 197.00.
COMMODITIES: Oil’s longest rally this year faltered on signs industrial activity in the world’s biggest energy consumer is deteriorating and as OPEC pumps a record amount of crude.
Futures lost as much as 2.1% in New York to snap a four-day advance. China’s purchasing managers index dropped in January to a three-year low, with the official factory gauge signaling contraction for a record sixth month. Output from the OPEC Countries rose to 33.11 million barrels a day last month as Indonesia’s membership to the group was reactivated, data compiled by Bloomberg show.
SOUTH AFRICA: Hammered by rising inflation, a currency slump and credit downgrades, South African bonds suffered the worst year on record in 2015. That makes them a bargain now, according to investors including Global Evolution.
Government securities gained 3% in January, outperforming stocks and cash, according to data compiled by Bloomberg. That’s a turnaround from last year, when rand bonds lost 3%, the most since at least 1998, when records began, and only the second time since then that they didn’t make money, according to Bank of America Merrill Lynch indexes. In dollar terms, the loss was 28%, the most out of more than 30 emerging-markets after Brazil.
U.K: The U.K.’s 43-year membership in the European Union comes into sharper focus in February as Prime Minister David Cameron discovers whether the rest of the bloc will offer him sufficient concessions to convince the British people it’s worth staying.
The U.K’s relationship with the EU, troubled by decades of anxiety over waning national power, the euro area’s threat to London’s financial clout, subsidies to French farmers and, more recently, mass migration, may come down to the next few weeks of deal-making. Any accord must offer enough special treatment to allow Cameron to claim victory before an in-out referendum as early as June, without prompting a revolt from other members of the 28-nation club.
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 28, 2016 28.189
Money Market Highlights
30 Day 7.9286
90 Day 09.1406
180 Day 10.4241
USD 1 Month 0.4250
USD 2 Months 0.5206
USD 3 Months 0.6126
USD 6 Months 0.8603
Tenor Maturity Yield (%)
91d 28-Apr-16 4.47
182d 28-Jul-16 7.22
364d 19-Jan-17 8.29
2y 31-Aug-17 10.20
3y 30-May-18 10.46
5y 13-Feb-20 12.00
Indicative Currency Exchange Rates
USDNGN 197.00 199.50
EURUSD 1.0753 1.0955
GBPUSD 1.4187 1.4388
USDJPY 121.11 121.41
USDCHF 1.01605 1.0262
GBPEUR 1.3058 1.3262
USDZAR 15.8540 16.0570