Financial market products & services update

*Financial markets.

*Financial markets.

13 May 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: The Federal Government on Thursday said it would review the current tax laws in the country in order for them to keep pace with the rapid changes in business practices. It said most of the tax codes in the country had become outdated, adding that with the government’s objective of driving the economy through revenue from non-oil sources, there was a need to carry out a thorough review of the tax codes.
The Minister of Finance, Mrs. Kemi Adeosun, who disclosed these during the 18th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria, said the Federal Government would work with the National Assembly to expedite action on the review of the laws.

FIXED INCOME: Macro conditions weighed in heavily (as against Wednesday’s bond auction results) on yesterday’s trading. With the 67% fuel price hike taking effect immediately, expectations are for inflation to race north in coming months. The expected rally in bonds lost steamed almost immediately it started. Sellers emerged as street appetite to hold assets has reduced even further. The 5, 10 and 20-year papers offered at Wednesday’s auction traded well above the auction stop rates.

FX: The CBN weekly Special intervention for this week held yesterday. The intervention rate was maintained at $/NGN 197.00.

CHINA: China’s broadest measure of new credit rose less than expected last month, suggesting that the central bank is starting to temper a flood of borrowing amid warnings from officials about potential side effects of the debt binge.
Aggregate financing was 751 billion Yuan ($115 billion) in April, the People’s Bank of China said, compared with the median forecast of 1.3 trillion Yuan in a Bloomberg survey. New Yuan loans were 555.6 billion Yuan, compared with an estimate of 800 billion Yuan.

U.S: The dollar hit a two-week high against a basket of currencies on Friday, posting its best fortnightly performance since February, bolstered by the view that the U.S. Federal Reserve is still on track to raise rates before any other major central bank.
The greenback suffered a sharp sell-off since the start of the year, hitting a 16-month low earlier this month, as market expectations have faded that there would be at least two Fed rate hikes in 2016.
But as fears about the global economy and market turbulence have subsided somewhat, some analysts say there are signs the tide could be turning for the dollar and that investors.

COMMODITIES: Oil pared its weekly advance as investors weigh supply reductions from the U.S. to Nigeria amid the return of some output from Canadian producers after wildfires eased.
Futures slid as much as 1.4% in New York after climbing 7.5% the previous three sessions. Militant attacks have cut Nigerian output by as much as 600,000 barrels a day while U.S. production has decreased for a ninth week. Enbridge Inc. is readying its oil-sands pipelines for startup after the blaze in Alberta, according to Chief Executive Officer Al Monaco. Iran is pumping crude at pre-sanctions levels, the International Energy Agency said Thursday.

Macro Economic Indicators
Inflation rate (Y-o-Y) for March 2016            12.80%
Monetary Policy Rate current                          12.00%
FX Reserves (Bn $) as at May 10, 2016,         26.787

Money Market Highlights

O/N                             6.9200
30 Day                        7.8033
90 Day                      11.2010
180 Day                    12.5363
USD 1 Month           0.4346
USD 2 Months         0.5174
USD 3 Months         0.6266
USD 6 Months         0.9049
USD 12 Months       1.06675

Benchmark Yields
Tenor    Maturity    Yield (%)

91d          11-Aug-16       8.04
182d       17-Nov-16      10.13
364d       04-May-17    12.47
2y           31-Aug-17      12.37
3y           30-May-18    12.95
5y           13-Feb-20     13.68

Indicative Currency Exchange Rates
Bid        Offer

USDNGN    197.72       198.42
EURUSD     1.1249       1.1451
GBPUSD     1.4313        1.4515
USDJPY      108.70       108.72
USDCHF     0.96555    0.9756
GBPEUR     1.2598       1.2802
USDZAR    15.0267      15.2388

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