Financial market products & services update

*Financial markets.

*Financial markets.

20 June 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Nigeria’s economy attracted $76.89 billion foreign investments between 2010 and 2015 just as analysts have said the new flexible foreign exchange policy will boost foreign investments in the near term. Data from the National Bureau of Statistics (NBS) showed that the investments comprise of foreign direct investments (FDIs), foreign portfolio investments (FPIs) and others. In 2010 the country attracted $6 billion investments, made up of $0.73 billion FDIs, $3.87 billion FPIs and others $1.40 billion. The value of investments rose to $7.90 billion in 2011 with FDIs accounting for $1.75 billion, FPIs $4.51 billion and others $1.64 billion. The value jumped by 110 per cent in 2012 rising to $16.62 billion. Out of this amount, FDIs was $2.0 billion, FPIs stood at $13.49 billion while others stood at $1.13 billion.

FX: All eyes are on the market today as the new FX regime starts today.
FIXED INCOME: With CBN’s public announcement of the special OMO auction, market opened softer. Special OMOs are floated to aggressively mop up excess cash. The last time this happened was in 2013 but the bills were non-tradable and non-transferable. A yield of 15.59% was offered by the CBN for Friday’s special OMO with the features of the bills more palatable and also now comparable to existing T-bills. Bid yields adjusted higher across the entire curve because of the ‘high advertised OMO rate’ while offers were slightly unchanged from Thursday. Demand eventually filtered into both markets (mostly short covering) but all eyes remain on the details of the new FX regime to start today. N206bn was mopped up at the advertised 15.59% yield. Post special OMO and bond auction debits, money market is now long. N750bn with O/N rates unchanged at 1%.

U.K: The pound has strengthened sharply against the dollar in early trading, bouncing back from last week’s losses. A short while ago the pound was more than two cents higher against the dollar at $1.4595 and at one point was trading as high as $1.4621. Traders are reacting to the latest polls which indicate a shift towards a vote to stay in the European Union; However, the picture remains unclear.

E.U: A UK exit from the European Union could mean the UK misses out on up to 5.6% of GDP growth by 2019, the IMF has warned. Brexit is the “largest near-term risk” to the UK economy, the IMF said in its annual UK economic outlook. It added that the net economic effects would probably be “negative and substantial”. But economists for the Brexit campaign said the consensus that a UK exit would be bad for the economy was “based on flawed EU-centric models”. Meanwhile, Russian President Vladimir Putin has accused UK Prime Minister David Cameron of holding the referendum to “blackmail” and “scare” Europe, and France’s economy minister says Britain would become as significant as Guernsey if it voted to leave.

COMMODITIES: Oil gained for a second day, extending its advance from a one-month low reached last week as equities rose and the dollar slipped on speculation the U.K. will vote to remain in the European Union. Brent for August settlement climbed as much as $1.08, or 2.2 percent, to $50.25 a barrel on the London-based ICE Futures Europe exchange.

Macro Economic Indicators
Inflation rate (Y-o-Y) for May 2016,         15.60%
Monetary Policy Rate current                    12.00%
FX Reserves (Bn $) as at Jun 16, 2016,    26.443

Money Market Highlights

O/N                            2.1500
30 Day                       8.0578
90 Day                     12.3375
180 Day                   13.8931
USD 1 Month          0.4478
USD 2 Months        0.5358
USD 3 Months        0.6444
USD 6 Months        0.9247
USD 12 Months      1.06675

Benchmark Yields
Tenor      Maturity      Yield (%)

91d            22-Sep-16        9.37
182d         15-Dec-16         9.79
364d         01-Jun-17        12.10
2y              27-Apr-17        11.23
3y              29-Jun-19       14.39
5y              13-Feb-20       14.21

Indicative Currency Exchange Rates
Bid          Offer

EURUSD      1.1227           1.1429
GBPUSD       1.4538          1.4740
USDJPY        104.62          104.65
USDCHF       0.95605       0.9662
GBPEUR       1.2821          1.3025
USDZAR       14.7400       14.9434

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