Financial market products & services update

*Financial markets.

*Financial markets.

15 March 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said that Nigeria will begin to export refined petrol and other petrochemical products within the next four years if plans to ramp up the country’s domestic refining capacity work out well.
Kachikuwu stated this recently in Abuja when he briefed journalists on his plans for the country’s petroleum sector.
He noted that if the plans to co-locate new refinery investments within the country’s existing refinery complexes in Kaduna, Warri and Port Harcourt become successful, and the private refinery owned by the Dangote Group comes on stream, Nigeria will produce more petrol than she needs and then export the excess.

FIXED INCOME: Money market liquidity down to N156.75bn. This lower system liquidity strengthened the bearish sentiments yesterday. T-bills and bonds moved +35 and +12bps respectively. The pressure on bills expected to continue until some respite is seen in the money market. At the primary market, both bill and bond auction prints to still come in lower than the last because of the smaller issue size. However, the 91day paper could come in higher because of the poor performance of short-dated papers in the secondary market.

FX: The CBN weekly special auction for last week held on Thursday and the intervention rate at $/NGN 197.00. Results expected today.

JAPAN: The Bank of Japan refrained from bolstering its record monetary stimulus as policy makers gauge the impact of the negative interest-rate strategy they adopted in January.
Governor Haruhiko Kuroda and his board kept the target for increasing the monetary base unchanged, and left their benchmark rate at minus 0.1%, the BOJ said in a statement on Tuesday. The decision was forecast by 35 of 40 economists surveyed by Bloomberg. The central bank reiterated that it will add easing if necessary.

CHINA: China’s central bank has drafted rules for a tax on foreign-exchange transactions that would help curb currency speculation, according to people with knowledge of the matter.
The initial rate of the so-called Tobin tax may be kept at zero to allow authorities time to refine the rules, said the people, who asked not to be identified as the discussions are private. The tax is not designed to disrupt hedging and other foreign-exchange transactions undertaken by companies, they said.

COMMODITIES: Brent dropped for a second day as Russia signaled Iran won’t join major producers in freezing output to manage a global glut.
Futures lost as much as 1.3% in London after falling 2.1% Monday. Iran has “reasonable arguments” for not joining an alliance to cap production now, Russian Energy Minister Alexander Novak said after meeting with his Iranian counterpart. Talks on the freeze are most likely to occur in Qatar’s capital Doha next month, according to Gulf OPEC delegates. U.S. stockpiles probably expanded last week, keeping supplies at the most since 1930.

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 11, 2016,   27.876

Money Market Highlights
NIBOR (%)

O/N                             5.0983
30 Day                        7.8136
90 Day                        9.2168
180 Day                     11.0593
LIBOR (%)
USD 1 Month           0.4362
USD 2 Months        0.5204
USD 3 Months        0.6338
USD 6 Months        0.9055

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     1.1006        1.1208
GBPUSD      1.4147        1.4350
USDJPY       113.11         113.14
USDCHF      0.98245    0.9926
GBPEUR      1.2726        1.2932
USDZAR      15.5766      15.7796
JPYNGN      174.8797    174.9803
CHFNGN     198.26       199.95
EURNGN     216.98       218.34
GBPNGN     281.14        282.5

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