Financial market products & services update

*Financial markets.

*Financial markets.

29 July 2016, Sweetcrude, Lagos — Local and international financial markets products and service update.
NIGERIA: The Federal Government has pledged to review the existing trade and industrial policies in the country to pave the way for new strategies that will guarantee the provision of enabling a business environment for the manufacturing sector. The Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, made the pledge at a one-day interactive forum between the ministry and manufacturers on Thursday. Enelamah said the government had already established an inter-ministerial council, called Presidential Enabling Business Environment Council, to look into the issues affecting the sector with a view to finding permanent solutions to them adding that the interactive forum was the government’s way of exchanging ideas and rubbing minds with the stakeholders towards arriving at solutions to the challenges facing the sector.

FX: Indicative closing range yesterday – $/NGN 316.00 – 320.50. Last update on FX reserves show the 30-day moving average has printed a fresh low with the 30-day moving average now at $26.229bn [26.07.2016].

FIXED INCOME: Bond market maintained status quo while the bill market saw all of the activity yesterday. CBN sold OMOs via their regular Dutch auction system and thereafter also hit bids by asking banks for 2-way quotes on specified sizes. Yesterday’s mop up was quite aggressive as an OMO maturity brought more cash into the system. The three bills banks had to provide 2-way quotes on were 27 July 17, 19 Jan 17 and 4 May 17. The quotes were asked for during trading hours and done in quick succession.

U.K: The number of new homes registered for construction in Britain rose in the second quarter to its highest since the financial crisis as building plans picked up before the EU referendum, an industry group said on Friday.
Registration of new homes rose 1% in the second quarter of 2016 versus a year ago to 41,222, the highest since the fourth quarter of 2007, the National House Building Council (NHBC) said.
That was an improvement on the first quarter, when registration numbers fell by 9% versus the year prior.

JAPAN: The Bank of Japan kept its key monetary tools unchanged, and will mount a comprehensive review of its policy framework due to “considerable uncertainty” about the outlook for inflation, which has consistently underperformed the central bank’s forecasts. The yen jumped.
Governor Haruhiko Kuroda and his team did enlarge a program of buying exchange traded funds by 2.7 trillion yen ($26 billion) a year, in a move to shore up confidence in light of post-Brexit volatility in financial markets and a slowdown in emerging markets. A dollar-lending facility was also expanded, the BOJ said in a statement in Tokyo Friday. Kuroda reiterated further easing will be done if needed and said the BOJ hasn’t hit a policy limit.

COMMODITIES: Oil headed for the biggest monthly decline in a year as brimming crude and fuel inventories force a retreat toward $40 a barrel.
Futures fell as much as 0.7% in New York, down 15% for the month. U.S. crude inventories rose for the first time since May while gasoline stockpiles expanded through July 22, swelling a surplus of supplies that are at the highest seasonal level in at least two decades. Libya’s biggest oil ports are reopening after a dispute with guards at the facilities was settled.
Oil has slipped about 20% since early June after almost doubling from a 12-year low in February as supply disruptions from Nigeria to Canada trimmed a worldwide surplus.

Macro Economic Indicators
Inflation rate (Y-o-Y) for June 2016,               16.50%
Monetary Policy Rate current                           14.00%
FX Reserves (Bn $) as at Jul 26, 2016,           26.229

Money Market Highlights

O/N                                4.5833
30 Day                           15.2916
90 Day                           17.6379
180 Day                          19.7737
USD 1 Month                 0.4956
USD 2 Months               0.6026
USD 3 Months               0.7515
USD 6 Months               1.0867
USD 12 Months             1.06675

Benchmark Yields
Tenor           Maturity          Yield (%)

91d                 27-Oct-16            15.36
182d               02-Feb-17           19.98
364d               06-Jul-17            19.63
2y                   30-May-18           17.37
3y                   29-Jun-19            15.59
5y                   13-Feb-20            15.55

Indicative Currency Exchange Rates
Bid            Offer

USDNGN        316.00          320.50
EURUSD         1.0990         1.1192
GBPUSD         1.3087          1.3288
USDJPY          103.71           103.74
USDCHF        0.97255        0.9827
GBPEUR        1.1788           1.1992
USDZAR        14.0478        14.2513
JPYNGN        3.0531           3.2484
CHFNGN       323.15           324.84
EURNGN       350.60          351.97
GBPNGN       371.39            372.79

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