Financial market products & services update

*Financial markets.

*Financial markets.

11 February 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: Minister of Finance, Mrs. Kemi Adeosun, tuesday disclosed that the federal government would suspend all withdrawals by ministries, departments and agencies (MDAs) from the Treasury Single Account (TSA) at the end of March.
The minister, who made the disclosure while defending the budget of her ministry before the Senate Committee on Finance chaired by Senator John Eno, was responding to questions by the committee on irregular balances in TSA account. She said money was going in and out of the account on a daily basis.
According to her, the ministry was working hard to determine the figures in the account which represented liabilities with the intention to know what will be brought forward to fund the 2016 budget.

FIXED INCOME: Strong tone in bonds yesterday as street positioned for the auction. Bond auction prints eventually came in stronger than last auction – this was a little surprising for the Jan 2026s. Yields came in at 12.19% (-5bps) and 12.39% (- 11bps) on the 5year and 10 year respectively. T-Bill market continues to see demand as money market liquidity remains supportive.

FX: The CBN weekly Special auction for this week will hold today and the intervention rate was maintained at $/NGN 197.00.

COMMODITIES: Gold rallied above $1,200 an ounce after Federal Reserve Chair Janet Yellen signaled that the U.S. central bank may delay further interest-rate rises should the turmoil in global markets continue, burnishing the investment case for the metal that’s been the best performing commodity in 2016. Bullion for immediate delivery gained as much as 1.5% to $1,214.64 an ounce, the highest level since May 22, according to Bloomberg generic pricing. The metal, which traded at $1,206.39 at 1:48 p.m. in Singapore, is heading for a ninth gain in 10 days. Miners’ shares jumped.

U.S: Investors were pleased on Wednesday when Federal Reserve Chair Janet Yellen said weakening stock prices pose a risk to the economy, convinced she won’t rush into more rate hikes. But how should everyone else feel with stocks down 10% in a year?
While far from definitive, evidence exists that equity prices hold clues to the economy, either portending or influencing future growth. A study by the research firm CXO Advisory Group LLC in July 2014 found that changes in gross domestic product only “very slightly” forecast the Standard & Poor’s 500 Index over the next few quarters, while stock signals for the economy are more robust. Bloomberg data shows that since 1929, bear markets have come on average nine months before the start of recessions.

U.K Britain’s economy could be thrown off track by the planned referendum on European Union membership, according to the country’s biggest business lobby.
Household spending and business investment will continue driving the expansion in 2016, the Confederation for British Industry said on Thursday, though risks including the ‘Brexit’ referendum, weak productivity and global turmoil are darkening the outlook. Alongside its comments, the CBI cut its 2016 growth forecast to 2.3% from 2.6% and lowered its 2017 projection to 2.1% from 2.4%.

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 09, 2016      27.894

Money Market Highlights
NIBOR (%)

O/N                               2.9300
30 Day                           7.8276
90 Day                           8.8520
180 Day                        10.5788
LIBOR (%)
USD 1 Month               0.4285
USD 2 Months             0.5155
USD 3 Months             0.6205
USD 6 Months             0.865

Benchmark Yields
Tenor       Maturity       Yield (%)

91d              05-May-16        3.87
182d            11-Aug-16          7.30
364d           02-Feb-17         9.43
2y                31-Aug-17        10.45
3y                30-May-18      10.65
5y                13-Feb-20       12.20

Indicative Currency Exchange Rates
Bid        Offer

USDNGN        197.00       199.50
EURUSD         1.1209       1.1411
GBPUSD         1.4363       1.4563
USDJPY          111.82        111.86
USDCHF         0.96485    0.9749
GBPEUR         1.2682       1.2886
USDZAR         15.8789     16.0825

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