29 April 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Apprehension heightened in the equities market yesterday as the deadline for the withdrawal of Morgan Stanley Capital International, MSCI, foreign investment index from the Nigerian Stock Exchange, NSE, expires today. The US-based provider of equity, fixed income, and hedge fund stock market indexes, announced earlier in the month that it was considering yanking off Nigeria from its MSCI Emerging market index. Though a decision is expected to be announced today, April 29, 2016, feelers from the NSE indicated that MSCI authorities may postpone the decision while keeping close watch on the
Investment climate in Nigeria.
FIXED INCOME: Following yesterday’s OMO maturity of N96.4bn, N49bn of 224 day paper (same 8 Dec 2016 bill auctioned on Wednesday) was successfully mopped up via another OMO auction yesterday. The stop rate of 10.09% yield was unchanged from Wednesday. In secondary market, sentiments still remain weak and any attempt at a rally in bonds is usually short-lived. Rates on the long end of the bill curve continue to move higher in anticipation of higher stop rates at next week’s bill auction.
FX: The CBN weekly intervention held yesterday and results are expected on Tuesday next week. The rate was maintained at $/NGN 197.00.
CHINA: China’s central bank responded to an overnight tumble in the dollar by strengthening its currency fixing the most since a peg was dismantled in July 2005.
The reference rate was raised by 0.6% to 6.4589 per dollar. A gauge of the dollar’s strength slid 1% on Thursday after the Bank of Japan’s decision to unexpectedly keep monetary policy unchanged sent the yen surging. The offshore Yuan was little changed at 6.4831 after gaining 0.3% in the last session.
While the change in the fixing is extreme relative to the small moves of recent years, analysts said it reflects increased volatility in the dollar against other major exchange rates rather than a policy shift by the People’s Bank of China.
U.S : U.S. economic growth braked sharply in the first quarter to its slowest pace in two years as consumer spending softened and a strong dollar continued to undercut exports, but a pick-up in activity is anticipated given a buoyant labor market.
Gross domestic product increased at a 0.5% annual rate, the weakest since the first quarter of 2014, the Labor Department said on Thursday in its advance estimate. Growth was also held back by businesses stepping up efforts to reduce unwanted merchandise clogging up warehouses.
Cheap oil, which has pressured the profits of oil field companies like Schlumberger (SLB.N) and Halliburton (HAL.N), remained a drag, sending business spending tumbling at its quickest pace.
COMMODITIES: Oil is poised for the biggest monthly advance in a year as U.S. production slumped to the lowest level since October 2014.
Futures are up about 21% this month in New York, set for a third monthly gain and the largest increase since April 2015. Output declined for a seventh week, according to data Wednesday from the Energy Information Administration. Venezuela is still working to boost prices that are too low, President Nicolas Maduro said on state television.
Macro Economic Indicators
Inflation rate (Y-o-Y) for March 2016 12.80%
Monetary Policy Rate current 12.00%
FX Reserves (Bn $) as at April 27, 2016, 27.149
Money Market Highlights
30 Day 8.0295
90 Day 10.4097
180 Day 11.8627
USD 1 Month 0.4377
USD 2 Months 0.5225
USD 3 Months 0.6343
USD 6 Months 0.9119
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 28-July-16 8.24
182d 27-Oct-16 9.40
364d 20-Apr-17 11.57
2y 31-Aug-17 11.47
3y 30-May-18 11.77
5y 13-Feb-20 12.71
Indicative Currency Exchange Rates
USDNGN 197.50 199.50
EURUSD 1.1283 1.1484
GBPUSD 1.4501 1.4704
USDJPY 107.00 107.03
USDCHF 0.95785 0.9681
GBPEUR 1.2724 1.2928
USDZAR 14.1090 14.3123
JPYNGN 185.9597 184.2103
CHFNGN 203.44 205.13
EURNGN 224.51 225.88
GBPNGN 285.77 287.17