17 February 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The projected net borrowings in the federal government’s 2016 budget proposals will increase the government’s debt stock by a further 1.8%, taking Nigeria’s total debt to 12.8 of gross domestic products (GDP).
The latest report from the Debt Management Office (DMO) showed that the federal government’s domestic debt at N8.84 trillion ($44.9 billion) at end-December 2015, equivalent to 8.9% of estimated 2015 GDP.
When we add the federal government’s external debt (at $10.72 billion equivalent to 2.1% of estimated 2015 GDP), we arrive at a burden representing 11.0% of GDP, the DMO noted in the report.
FIXED INCOME: The T-bills market opened yesterday with a bearish sentiment but quickly changed with demands going through the market mainly on the short end of the curve.
Money Market liquidity opened at about 1.1trn, but closed at 5% following FX auction funding requirements. Most of the activities in bonds were on the 20s and the newly introduced 26s with buying interest going through that market too. PMA today and we expect the auction to be well bid.
FX: The CBN as its custom announced the weekly Special auction for this week to hold on Thursday and the intervention rate at $/NGN 197.00.
COMMODITIES: The first coordinated decision on oil output between OPEC and producers outside the group in fifteen years isn’t going to revive crude prices, according to Goldman Sachs Group Inc.
The agreement between Saudi Arabia and Russia to freeze production will have “little impact on the oil market as proposed, while there remains high uncertainty that it even materializes,” analysts including Jeffrey Currie said in a note e-mailed Wednesday.
INDIA: India’s benchmark stock index slid to a one-week low as the rupee weakened toward a record low amid outflows by overseas investors.
Coal India Ltd., the world’s largest producer of the fuel, dropped for a second day, while Gail India Ltd., a state-run supplier of natural gas, was the worst performer on the S&P BSE Sensex. Bajaj Auto Ltd., a two-wheeler maker, and Larsen & Toubro Ltd., the nation’s most valuable engineering company, declined for a second day.
The S&P BSE Sensex lost 0.2% at 11:15 a.m. in Mumbai, extending Tuesday’s 1.5% retreat. Overseas investors sold a net $165 million of Indian stocks on Feb. 15, taking this year’s outflow to $2.3 billion as they turn averse to riskier emerging-market assets. The rupee is Asia’s worst-performing currency over the past month.
CHINA: The Yuan headed for the biggest two-day decline in more than a month as the central bank’s fixing for the currency tracked an overnight advance in the dollar and official media voiced concern that capital outflows will increase.
Yuan depreciation expectations will accelerate outflows this year, a researcher with the State Information Center wrote in the Shanghai Securities News. This will constrain the use of monetary tools such as cuts to interest rates and bank reserve-requirement ratios, the researcher said. China’s foreign-exchange reserves shrank by $99.5 billion in January, the second-biggest decline on record. The Yuan fell 0.12% to 6.5259 against the greenback as of 10:38 a.m. in Shanghai today according to China Foreign Exchange Trade System prices.
Macro Economic Indicators
Inflation rate (Y-o-Y) for December 2015 9.55%
Monetary Policy Rate current 11.00%
FX Reserves (Bn $) as at February 15, 2016 27.812
Money Market Highlights
30 Day 8.2498
90 Day 9.9500
180 Day 11.4530
USD 1 Month 0.4295
USD 2 Months 0.5158
USD 3 Months 0.6182
USD 6 Months 0.8636
Tenor Maturity Yield (%)
91d 26-May-16 3.50
182d 18-Aug-16 7.32
364d 02-Feb-17 9.29
2y 31-Aug-17 10.65
3y 30-May-18 10.83
5y 13-Feb-20 11.91
Indicative Currency Exchange Rates
USDNGN 197.00 199.50
EURUSD 1.1060 1.1262
GBPUSD 1.4167 1.4369
USDJPY 113.85 113.87
USDCHF 0.98255 0.9926
GBPEUR 1.2683 1.2887
USDZAR 15.7643 15.9679