Financial market products & services update

*Financial markets.

*Financial markets.

18 February 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: President Muhammadu Buhari has ordered the complete purge of the Budget Office because of the discrepancies and padding of the 2016 budget.
News media gathered on Wednesday that the President handed down the directive following the embarrassment that the budget discrepancies had attracted to his government.
It will be recalled that Buhari had on Monday sacked Mr. Yahaya Gusau as the Director-General of the Budget Office for the same reason and approved the appointment of Mr. Tijjani Mohammed Abdullahi as his replacement.

FIXED INCOME: The T-bills auction result for yesterday is expected to bring some demand to markets today. Yields cut at 4.91% (- 10bps), 7.58% (-73bps) and 9.86% (-62bps) on the 91, 182 and 364 day respectively – N142.436bn was offered and sold. It was also quiet in the bond market – yields closed lower but on the back of very little activity. The new Jan 2026s continues to outperform compared to the rest of the bond curve.

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

COMMODITIES: Oil extended gains above $31 a barrel as Iran supported a proposal by Saudi Arabia and Russia to freeze production at near-record levels, without saying whether it would curb its own output.
Futures climbed as much as 3.5% in New York after rising 5.6% Wednesday. Iran backs any measures to stabilize markets including the output cap, Oil Minister Bijan Namdar Zanganeh said after talks with Qatar, Iraq and Venezuela, according to a report from the Shana news service. U.S. crude stockpiles are forecast to have increased by 3.5 million barrels last week. according to a Bloomberg survey before government data Thursday.

MIDDLE EAST: The United Arab Emirates central bank’s foreign assets fell by $12 billion in January from the previous month as the Arab world’s second-biggest economy grapples with falling oil prices and bets against its currency.
Foreign assets declined to 296.9 billion dirham’s ($81 billion) from 341.1 billion dirham’s, according to data posted on the central bank’s website. Cash, bank balances and deposits with banks abroad dropped almost 30% to 122.2 billion dirham’s, while investments in held-to-maturity foreign securities and other foreign assets increased, according to the data.

CHINA: The Yuan rose for the first time in three days amid optimism that China’s central bank is allowing market forces greater sway after sparking turmoil earlier this year with a series of surprise fixings.
The monetary authority has followed the direction of the dollar’s move in setting the Yuan’s reference rate this week, and allowed its currency to surge the most in a decade when onshore markets reopened after the Lunar New Year holidays. Bearish forecasts on the Yuan are beginning to see a slight reduction in pessimism, with analysts projecting a 3.4% decline by year-end, compared with 4.2% two weeks ago.
The Yuan strengthened 0.18% to 6.5174 a dollar as of 11:44 a.m. in Shanghai, according to China Foreign Exchange Trade System prices. The currency’s Hong Kong rate was 0.04% weaker than the onshore level, after sinking last month to a record 2.9% discount as global investors bet on depreciation.

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 16, 2016    27.805

Money Market Highlights
NIBOR (%)

O/N                            4.0800
30 Day                       8.2189
90 Day                       9.8072
180 Day                    11.5007
LIBOR (%)
USD 1 Month          0.4295
USD 2 Months        0.51605
USD 3 Months        0.6182
USD 6 Months        0.8658

Benchmark Yields
Tenor      Maturity     Yield (%)
91d            26-May-16      3.50
182d          18-Aug-16       7.08
364d          02-Feb-17      9.29
2y               31-Aug-17     10.54
3y               30-May-18   10.77
5y               13-Feb-20    12.02

Indicative Currency Exchange Rates
Bid        Offer

USDNGN      197.00       199.50
EURUSD       1.1030       1.1231
GBPUSD       1.4181        1.4383
USDJPY        113.85        113.87
USDCHF       0.98675    0.9969
GBPEUR       1.2729       1.2933
USDZAR       15.3738     15.5849

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