Financial market products & services update

*Financial markets.

*Financial markets.

04 February 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The monthly oil and gas operational report of the Nigerian National Petroleum Corporation (NNPC) for 2015 has shown that the corporation posted a cumulative operational loss of N267.138 billion last year.
While four of its subsidiaries — the NNPC Retail, Nigerian Petroleum Development Company (NPDC), Integrated Data Services Limited (IDSL) and the Nigerian Gas Company (NGC) —made profits of N5 billion, N16 billion, N2 billion and N34 billion respectively, its seven other subsidiaries made losses with the Corporate Headquarters recording the highest loss of N162.736 billion. NNPC’s product supply and distribution arm, the Pipelines and Products Marketing Company (PPMC), posted a loss of N62 billion, and all the three refineries made a combined loss of N82 billion in the year under consideration.

FIXED INCOME: It was a quiet start for both T-bills and Bonds yesterday. Late afternoon brought some selloff in both markets. T-Bill auction yesterday may have triggered that. Buy side client also seen offloading risk in decent size on the short end of the bond curve. Outlier in yesterday’s trading was the 11 Feb bills which moved down 210bps (for liquidity management reasons) to close at 0.63%. T-Bill auction prints at 5.01%, 8.31% and 10.48% yield on the 91, 182 and 364 day respectively. N50bn more was sold on the 182day paper.
FX: The CBN weekly Special auction for this week will hold today and the intervention rate maintained at $/NGN 197.00.

COMMODITIES: Oil extended its rally after the biggest drop in almost seven years as a sliding U.S. dollar and speculation over an emergency producer meeting whipsaw prices.
Futures climbed as much as 2.1% in New York after advancing 8 percent the previous session. The Bloomberg Dollar Index, which tracks the currency against major peers, fell 1.7% Wednesday, the most since March 2015, making commodities priced in the U.S. currency more attractive to investors.

CHINA: Chinese stocks climbed to a one week high as commodity producers rallied and the central bank stepped up efforts to ease a cash shortage before mainland markets close for the lunar New Year holidays next week.
The Shanghai Composite Index rose 1.5% to 2,781.02 at the close, the highest level since Jan. 25.
The People’s Bank of China injected 80 billion Yuan ($12 billion) into the banking system using 14-day reverse repurchase agreements Thursday as demand for cash rose in the run up to the weeklong Chinese holidays starting on Feb. 8. The monetary authority raised the Yuan’s fixing by the most since Dec. 4. Mainland markets will be closed all next week.

U.K: The pound fell against the dollar, paring its biggest jump since October, before Bank of England officials announce their latest interest-rate decision and economic forecasts.
With all 41 analysts in a Bloomberg survey predicting the BOE will hold its official rate at a record-low 0.5%, investors’ focus is on the economic projections in the central bank’s quarterly Inflation Report for any hints on the bank’s assessment of the U.K.’s rate path. After a rout in global equities and commodities in January, forward contracts based on the sterling overnight index average, or Sonia, aren’t fully pricing in a quarter-point increase to the official bank rate until after March 2017.

Macro economic Indicators
Inflation rate (Y-o-Y) for December 2015          9.60%
Monetary Policy Rate current                              11.00%
FX Reserves (Bn $) as at February 02, 2016    28.091

Money Market Highlights

O/N                                 5.1250
30 Day                            8.7306
90 Day                           10.2206
180 Day                         11.5914
USD 1 Month                0.4285
USD 2 Months              0.5196
USD 3 Months              0.6192
USD 6 Months              0.8648

Benchmark Yields
Tenor       Maturity       Yield (%)

91d              05-May-16      4.59
182d            04-Aug-16      7.87
364d            19-Jan-17       8.45
2y                 31-Aug-17     10.51
3y                 30-May-18   10.78
5y                 13-Feb-20     12.22

Indicative Currency Exchange Rates
Bid         Offer

USDNGN        197.00       199.50
EURUSD         1.0980      1.1183
GBPUSD          1.4464      1.4667
USDJPY           118.00      118.03
USDCHF          1.00085   1.0110
GBPEUR          1.3038      1.3242
USDZAR          15.9068    16.108

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