Financial market products & services update

*Financial markets.

*Financial markets.

24 February 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The International Monetary Fund, IMF, yesterday, said it was supportive of the Federal Government’s ongoing efforts at promoting targeted and core infrastructure in power, integrated transport network, housing; reduce business environment costs through greater transparency and accountability and promote employment of youths and female populations.
It also said that “adopting a sound Petroleum Industry Bill, applying the anti-money laundering/combating the financing of terrorism framework, will help.
The IMF team that visited Nigeria in January 2016 in a statement released, yesterday, in Washington said: “In the light of the significant macroeconomic adjustment that is needed to address the permanent terms-of-trade shock, it will be important for Nigeria to put in place an integrated package of policies centered around: fiscal discipline; reducing external imbalances; further improving efficiency of the banking sector; and fostering strong implementation of structural reforms that will enhance.”

FIXED INCOME: Fixed income market remained well bid as OMO maturity of N257bn expected on Thursday. FAAC meeting still awaited. Oil prices have recently changed the fixed timing of the meeting seen in previous years. Given the huge liquidity in the system, we expect the buy sentiments to continue.

FX: The CBN announced its weekly special auction to hold on Thursday the 25th Feb 2016 and the intervention rate at $/NGN 197.00.

COMMODITIES: Oil extended declines after Iran said a proposal by Saudi Arabia and Russia for producers to freeze output was “ridiculous” as the Persian Gulf nation seeks to boost exports after years of sanctions. Futures slid as much as 2.5% in New York. The proposal to cap output at January levels puts “unrealistic demands” on Iran, Oil Minister Bijan Namdar Zanganeh said Tuesday, according to the ministry’s news agency Shana. Ali Al-Naimi, his counterpart from Saudi Arabia, said at a conference in Houston high-cost producers should bear the burden of reducing the current surplus and reaffirmed the kingdom’s commitment to last week’s accord.

E.U: Mario Draghi has two weeks left to decide how to ramp up stimulus in a way that doesn’t upset either his colleagues or investors.
When European Central Bank policy makers meet in Frankfurt from March 9-10, they’ll consider whether negative interest rates and 60 billion Euros ($67 billion) a month of debt purchases is enough to revive consumer prices. With another rate cut priced in by markets, the biggest question mark hangs over how to customize quantitative easing.

CHINA: China’s Yuan fell for a fourth day as the central bank cut its daily fixing and a report suggested outflows persisted in January.
The People’s Bank of China set its reference rate at the lowest level in almost three weeks after figures from the nation’s foreign-exchange regulator released Tuesday afternoon showed banks net sold overseas currencies to their clients for a seventh straight month in January. The data indicate outflows were still significant but not as rapid as some had feared, Goldman Sachs Group Inc. economists in Hong Kong wrote in a note. The Yuan fell 0.08% to 6.5319 a dollar as of 10:24 a.m. in Shanghai, 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 18, 2016 27.806

Money Market Highlights

O/N 4.2500
30 Day 7.3180
90 Day 8.5960
180 Day 9.9224
USD 1 Month 0.4335
USD 2 Months 0.5197
USD 3 Months 0.6246
USD 6 Months 0.8815

Benchmark Yields
Tenor Maturity Yield (%)

91d 26-May-16 3.74
182d 18-Aug-16 6.38
364d 16-Feb-17 8.50
2y 31-Aug-17 9.16
3y 30-May-18 9.78
5y 13-Feb-20 11.59

Indicative Currency Exchange Rates
Bid Offer

USDNGN 197.00 199.50
EURUSD 1.0905 1.1104
GBPUSD 1.3882 1.4083
USDJPY 112.09 112.12
USDCHF 0.98875 0.9989
GBPEUR 1.2607 1.2811
USDZAR 15.1272 15.3319

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