Financial market products & services update

*Financial markets.

*Financial markets.

11 March 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The two chambers of the National Assembly have disagreed with the Minister of State for Petroleum Resources, Ibe Kachikwu, over the restructuring of the Nigerian National Petroleum Corporation.
While the Senate has backed the reforms, saying the minister’s action did not contravene any known law, the House of Representatives insists that the restructuring of the national oil firm is illegal.
Kachikwu appeared before the Senate Joint Committees on Petroleum Resources (Upstream, Downstream and Gas) in Abuja on Thursday to explain the reasons for the restructuring.
Before going into a closed session with the senators that lasted about one hour, the minister explained that his action was in the best interest of the country, but regretted not holding necessary consultations with the National Assembly before announcing the restructuring.

FIXED INCOME: Bond market yesterday was somewhat quiet but there was decent 2-way interest. Initially, bond yields opened higher but this quickly met buyers. As the day progressed, the profit takers emerged again and slowly the yields moved lower again to close the day. Real money demand was whispered to be behind the Jan 2026s. In the T-bill market, it was more of the same. The weak tone persisted as money market conditions remain unchanged.

FX: The CBN weekly special auction for this week to held yesterday and the intervention rate at $/NGN 197.00.
JAPAN: The Bank of Japan’s new negative rate is the most likely tool for any expansion of stimulus, with a majority of economists in a survey forecasting additional easing by July.
Eighty percent of analysts see a further cut to the negative rate, as the most likely action for Governor Haruhiko Kuroda, and almost 90% see more easing coming at one of the four meetings through the end of July. Only five of 40 economists expect additional stimulus at the meeting ending on March 15, according to the survey by Bloomberg.

E.U: The European Central Bank move to cut benchmark rates 50 bps to zero could further lower corporate bond yields in the eurozone. The decision to step up purchases of investment-grade bonds from non-bank corporates could boost demand for EU utilities-issued euro-denominated debt. The lower benchmark rate will reduce EU utility payments on existing floating-rate debt and, if rates rise, will decrease borrowing costs for floating-rate debt that was replaced with a fixed coupon. The European Central Bank’s decision to cut the benchmark interest rate to zero and step up purchases of corporate bonds could boost demand for debt issued by utilities.

COMMODITIES: Oil headed for the longest run of weekly gains since May amid signs of rising U.S. fuel demand and easing crude production.
Futures gained as much as 2.7% in New York and are set for a fourth weekly advance. Gasoline consumption the past four weeks was at the highest level since September, while crude output remained near the least since November 2014, according to data from the Energy Information Administration Wednesday. Stockpiles still remain at the most since 1930. A measure of price volatility Thursday closed near the lowest in two months.

Macro Economic Indicators
Inflation rate (Y-o-Y) for January 2016          9.62%
Monetary Policy Rate current                          11.00%
FX Reserves (Bn $) as at March 09, 2016     27.882

Money Market Highlights

O/N                         5.0983
30 Day                    7.8136
90 Day                    9.2168
180 Day                11.0593
USD 1 Month      0.4380
USD 2 Months    0.5210
USD 3 Months    0.6346
USD 6 Months    0.8984

Benchmark Yields
Tenor      Maturity      Yield (%)

91d             09-June-16     5.77
182d           08-Sep-16       7.95
364d          02-Mar-17      8.99
2y               31-Aug-17       9.41
3y               30-May-18     9.78
5y               13-Feb-20     11.27

Indicative Currency Exchange Rates
Bid         Offer

USDNGN       197.50       199.50
EURUSD        1.1014       1.1216
GBPUSD        1.4166       1.4368
USDJPY         113.77        113.80
USDCHF        0.98245   0.9926
GBPEUR        1.2733       1.2937
USDZAR        15.1813     15.3846
JPYNGN        174.8797  174.9803
CHFNGN       198.26      199.95
EURNGN       216.98      218.34
GBPNGN       281.14       282.53

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