Financial market products & services update

*Financial markets.

*Financial markets.

14 July 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Federal Government of Nigeria on Wednesday said its earnings had declined by 40% as a result of the drastic fall in oil prices, as well as the persistent attacks on oil installations in the Niger Delta. Against this backdrop, it said the N6.06 trillion budget for this year will only be partially implemented.

Making this disclosure while appearing before the joint Senate Committee on Ethics, Privileges and Public Petitions, and Appropriation and Finance, the Secretary to the Government of the Federation (SGF), Mr. Babachir David Lawal, blamed the decline on activities of the militant group, the Niger Delta Avengers, which has claimed responsibility for the wave of attacks on oil installations in the oil-rich region.
The SGF had been summoned by the Senate on Tuesday to appear before the committee over a comment credited to him that the federal government would not implement constituency projects as provided in the 2016 budget.

FX: The current momentum of the interbank market still maintained. Traded range widen yesterday $/NGN 282.00 – 284.25.

FIXED INCOME: Fixed income markets opened weak yesterday. After an initial selloff in bonds, it was a dull day till close with the CBN system glitch making things unclear. Traders awaited guidance on the bond auction which hopefully will be conducted today. Bond auction results are still expected to give the direction in bonds. In T-bills, client flows and a bit of short covering brought about some reversal of the week’s losses. Today’s OMO maturity (N40bn) will only give temporary relief to the money market as bond auction debits are still going to be.

CHINA: Chinese stocks retreated from a three-month high, with materials and energy companies leading the drop, amid signs that recent gains by the market were excessive.
The Shanghai Composite Index halted a three-day advance after trade data signaled sluggish consumer demand in the world’s second-largest economy. Jiangxi Copper Co. paced metal shares lower after rising to this year’s highest level. The mainland benchmark gauge’s 14-day relative-strength index surpassed 70 on Wednesday for the first time since just before last summer’s $5 trillion rout.

U.K: The pound advanced as traders awaited the Bank of England’s first rate decision since the U.K. voted to leave the European Union in a referendum on June 23.
Sterling strengthened against all except two of its 16 major peers, approaching its highest level in more than a week versus the dollar. The U.K. currency’s rally came even amid rising speculation that the central bank will cut its benchmark rate for the first time since 2009 to support the U.K. economy from the fallout of Brexit. Futures pricing shows the chance of a rate cut at this meeting has climbed to 83%, compared with 11% on the day of the EU referendum.

COMMODITIES: Oil rebounded after closing at the lowest level in two months as investors weighed U.S. data that showed crude stockpiles slid and fuel inventories unexpectedly grew.
Futures gained as much as 1.5% in New York, paring Wednesday’s 4.4% slump. U.S. supplies fell on the eighth week, the longest losing streak since June 2015, according to the Energy Information Administration. Gasoline inventories rose further above their five-year average, while analysts had forecast a decline.

Macro Economic Indicators
Inflation rate (Y-o-Y) for May 2016,       15.60%
Monetary Policy Rate current                  12.00%
FX Reserves (Bn $) as at Jul 12, 2016,   26.374

Money Market Highlights

O/N                             18.9167
30 Day                        15.2417
90 Day                        15.7597
180 Day                      16.7052
USD 1 Month            0.4793
USD 2 Months          0.5627
USD 3 Months          0.6733
USD 6 Months          0.9660
USD 12 Months        1.06675

Benchmark Yields
Tenor       Maturity       Yield (%)

91d              13-Oct-16        12.24
182d            05-Jan-17       11.37
364d            06-Jul-17       15.63
2y                 30-May-18     14.71
3y                 29-Jun-19      14.25
5y                 13-Feb-20      14.53

Indicative Currency Exchange Rates
Bid        Offer

USDNGN     281.00       284.00
EURUSD      1.1000       1.1202
GBPUSD       1.3134       1.3336
USDJPY        105.58      105.60
USDCHF       0.97815    0.9883
GBPEUR       1.1820       1.2023
USDZAR       14.2558     14.4588
JPYNGN       267.4497   267.5503
CHFNGN      286.62       288.30
EURNGN      311.93        313.29
GBPNGN       286.94       288.34

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