08 April 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: Nigeria plans to split state oil company NNPC into two to help ease a planned stake sale and wants to sell at least 40% of a newly created National Petroleum Co (NPC) in coming years, according to a draft of a long-awaited oil bill seen by Reuters.
The bill envisages the sale of at least 10% of NPC over five years and is targeting 40% or more over ten years, as Africa’s top oil exporter seeks to fix cash shortage that is hampering investment at NNPC and ends graft.
Parliament is to start debating within days the amended Petroleum Industry Bill, in the works for a decade and designed to change everything from taxes to environmental rules and revenue sharing, as well as overhauling NNPC.
FIXED INCOME: The strong auction print on the 1year and robust money market liquidity supported yesterday’s rally. Post funding for FX auction, money market liquidity now back to N405bn. The t-bill market was still well bid. The tone in bonds was also firm, but activities were tepid. Average bill yield closed –39bps at 7.33% and bonds –3bps at 11.57%. Depending on yesterday’s CRR entries, we could see the rally in T-bills lose some steam today. O/N rates remained at 4%.
FX: The CBN weekly special auction for this week held yesterday. The intervention rate was maintained at $/NGN 197.50.
U.S: Federal Reserve Chair Janet Yellen said she continues to see some slack remaining in the U.S. labor market even as the economy shows “tremendous progress” following the financial crisis and the worst recession since the Great Depression.
“We are coming close to our assigned congressional goal of maximum employment,” Yellen said Thursday in New York on a panel with three of her predecessors. Many measures of unemployment, she said, “really suggest a labor market that is vastly improved.”
Unemployment in the U.S. has been at or below 5% since October, down from 10% in October 2009. Jobless claims have been lower than 300,000 a week for more than a year; signaling firings remain at a very low level given the size of the labor force.
E.U: Banking watchdogs across Europe have begun checking whether lenders have ties to a massive document leak from Panama that showed how offshore companies are used to stash clients’ wealth.
Switzerland’s financial watchdog FINMA said on Thursday that banks must clamp down on money laundering, as the Geneva prosecutor opened a criminal probe.
Four decades of documents from Panamanian law firm Mossack Fonseca, which specializes in setting up offshore companies and has offices in Zurich and Geneva, showed widespread use of those instruments by global banks and triggered investigations across the world.
COMMODITIES: Oil is poised for a weekly gain as U.S. crude output continues to drop before a meeting between suppliers to discuss freezing production.
Futures climbed as much as 2.3% in New York, up 3.4% for the week. U.S. output slid for the 10th time in 11 weeks through April 1 as crude stockpiles fell, according to data from the Energy Information Administration on Wednesday. Major producers from Saudi Arabia to Russia will meet in Doha on April 17 to discuss a freeze in a bid to stabilize prices.
Macro Economic Indicators
Inflation rate (Y-o-Y) for February 2016 11.38%
Monetary Policy Rate current 12.00%
FX Reserves (Bn $) as at April 04, 2016 27.707
Money Market Highlights
30 Day 7.9364
90 Day 9.8114
180 Day 11.4062
USD 1 Month 0.4390
USD 2 Months 0.5225
USD 3 Months 0.6306
USD 6 Months 0.8972
Tenor Maturity Yield (%)
91d 30-June-16 6.53
182d 06-Oct-16 8.63
364d 16-Mar-17 9.85
2y 31-Aug-17 10.32
3y 30-May-18 10.48
5y 13-Feb-20 11.79
Indicative Currency Exchange Rates
USDNGN 197.50 199.50
EURUSD 1.1282 1.1484
GBPUSD 1.4007 1.4209
USDJPY 108.88 108.91
USDCHF 0.95125 0.9615
GBPEUR 1.2297 1.2502
USDZAR 14.9802 15.1834
JPYNGN 182.7197 182.8203
CHFNGN 207.32 209.01