Financial market products & services update

*Financial markets.

*Financial markets.

02 March 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Senate yesterday, was told by the Islamic Development Bank, IDB, that Nigeria was spending 80 percent of its total revenues to service debts. It also ranked Nigeria as one of the countries in the world using the largest percentage of its revenues for debt payment. According to IDB, this act explains why the nation bleeds economically and this requires urgent expansion. Disclosing this yesterday when he visited the Chairman, Senate Committee on Foreign and Local Debts, Senator Shehu Sani, APC Kaduna Central, resident representative of IDB in Nigeria, Abdallah Kiliaki, said though Nigeria’s debt Gross Domestic Product, GDP, ratio was low at 17 percent, resources being used to pay the debts were enormous, going by percentages taken on a yearly basis.

FIXED INCOME: T-Bills and bonds opened tighter yesterday but were range-bound for most of the day. The demand seen in T-bills was in the short dates (<100days) as dealers invested excess cash. Following Monday’s OMO sale of the N101.8bn money market is still long N390bn. Overall, another dull day especially in bonds where volumes were even thinner compared to yesterday.
FX: The CBN announced its special auction for this week to hold on Thursday and intervention rate at $/NGN 197.00.

EU: Unemployment in the Eurozone fell for a third consecutive month in January, dropping to its lowest rate in August 2011. Eurostat, the EU’s statistical agency, said the jobless rate in the 19-country eurozone declined to 10.3% in January from 10.4% in December. The number of people unemployed in the eurozone fell by 105,000 to 16.65 million. The eurozone’s jobless rate hit a high of 12.1% during the first half of 2013. In the 28 member European Union, the unemployment rate fell to 8.9%. That was down from 9% in December and the lowest rate recorded since May 2009. The lowest unemployment rate in the eurozone was in Germany at 4.3%, while the highest rates were in Spain, at 20.5%, and Greece, at 24.6%.

CHINA: US rating agency Moody’s has cut its outlook for China from “stable” to “negative”. While reaffirming its current debt rating, the agency warned that reforms were needed to avoid a downgrade. Moody’s said the change in outlook was based on expectations that Beijing’s fiscal strength would continue to decline. The negative outlook comes on the heels of fresh data suggesting China’s economy is continuing to lose steam. Moody’s said it was concerned with China’s incomplete implementation of much-needed reforms.

COMMODITIES: Oil declined from the highest close in eight weeks as U.S. industry data showed crude stockpiles expanded amid a global glut. Crude is down about 8 percent this year on speculation a surplus will be prolonged amid brimming U.S. supplies and the outlook for increased exports from Iran after the removal of international sanctions. Russian oil producers met with President Vladimir Putin to pledge support for a plan agreed with Saudi Arabia and other nations to freeze output at January levels. Brent for May settlement was 9 cents higher at $36.90 a barrel on the London-based ICE Futures Europe exchange. The contract climbed 24 cents, or 0.7 percent, to $36.81 on Tuesday.

Macro Economic Indicators
Inflation rate (Y-o-Y) for January 2016               9.62%
Monetary Policy Rate current                               11.00%
FX Reserves (Bn $) as at February 29, 2016,    27.8240

Money Market Highlights
NIBOR (%)

O/N                              3.0383
30 Day                          7.4753
90 Day                          9.0140
180 Day                       10.5097
LIBOR (%)
USD 1 Month              0.4405
USD 2 Months            0.5218
USD 3 Months            0.6331
USD 6 Months            0.8859

Benchmark Yields
Tenor       Maturity       Yield (%)

91d             02-June-16       4.73
182d           01-Sep-16          7.54
364d          16-Feb-17           9.42
2y               27-Apr-17           9.52
3y              29-Jun-19         10.59
5y              13-Feb-20         11.92

Indicators Currency Exchange Rates
Bid           Offer

USDNGN     197.00         199.50
EURUSD      1.0766         1.0968
GBPUSD      1.3818          1.4020
USDJPY       114.37          114.40
USDCHF      0.99305      1.0032
GBPEUR      1.2707         1.2911
USDZAR      15.6062      15.8096
JPYNGN      173.9797    174.0803
CHFNGN     198.56        200.25
EURNGN     215.62        216.98
GBPNGN      276.29       277.69
ZARNGN      11.71           13.64

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