Financial market products & services update

*Financial markets.

*Financial markets.

10 October 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Federal Government has reached an agreement with the World Bank Group and other development partners for the release of $1.3bn for the take-off of the Development Bank of Nigeria.
The Minister for Finance, Mrs. Kemi Adeosun, said this on Sunday in Washington DC, the United States of America at the closing press conference marking the end of the World Bank/International Monetary Fund’s annual meetings.
Adeosun, who spoke alongside the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, explained that the DBN would serve as a means of intervention for the Small and Medium-sized Enterprises in the country to get funds to run their operations and expand in order to achieve inclusive growth for the country.

FX: The momentum was unchanged last week with very few happening in the interbank market at the moment outside of CB direct intervention in the market. The traded range for last week Friday $/NGN 304.50 – 315.00.

FIXED INCOME: Market continued to pick up the short-dated bills, some from renewed interest, but most to cover short positions. The rest of the curve also got some buy interest from the market. CBN finally issued OMO bills on Friday and sold N283bn to mop up the N160bn maturity. O/N closed at 15% on Friday after dropping to 8% on Thursday following the maturity. W-O-W average t-bills yields dropped 64bps to close at 18.88% while bond yields went up marginally by 7bps to close at 15.05%. Bond market activity was low with market playing the waiting game till this week’s auction.

JAPAN: Governor Haruhiko Kuroda gave the clearest signal yet that the Bank of Japan may postpone the forecast date for achieving its 2% inflation target to 2018, even with economic growth set to accelerate next year.
A delay would signal the BOJ would fail to reach its objective during Kuroda’s term, which concludes in April 2018. That would raise the stakes for either the governor’s reappointment or the selection of a successor who’s committed to sustaining his unprecedented scale of monetary stimulus in the world’s No. 3 economy.

CHINA: China’s stocks rose, led by energy producers, as the nation’s financial markets reopened after week-long holidays. A gauge of property developers tumbled after a number of cities imposed curbs to cool surging home prices, while the Yuan slumped the most since June.
The Shanghai Composite Index added 1.2% as of 1:14 p.m. local time. China Oilfield Services Ltd. headed for its highest close since August and China Petroleum & Chemical Corp. rallied to a one-month high. A gauge of Chinese stocks in Hong Kong climbed 3.6% last week, while New York crude jumped 3.3%.

COMMODITIES: Oil slipped as U.S. drillers added rigs for a sixth straight week, extending declines below $50 after Russia cast doubt over a deal anytime soon with OPEC on output cuts.
Futures lost as much as 1.3% in New York after falling an equal amount on Friday. The number of active U.S. oil rigs climbed to the highest since February, rising by 3 to 428, according to Baker Hughes Inc. data. Russia’s Energy Minister Alexander Novak said he doesn’t expect to sign a deal with OPEC during the World Energy Congress this week in Istanbul following the group’s agreement last month in Algiers to cut output.

Macro Economic Indicators
Inflation rate (Y-o-Y) for August 2016,     17.61%
Monetary Policy Rate current                     14.00%
FX Reserves (Bn $) as at Oct 06,2016,     24.365

Money Market Highlights

O/N                           16.5417
30 Day                      17.6498
90 Day                      18.6625
180 Day                    20.3649
USD 1 Month           0.5290
USD 2 Months         0.6558
USD 3 Months         0.8760
USD 6 Months         1.2622
USD 12 Months       1.06675

Benchmark Yields
Tenor      Maturity      Yield (%)

91d            05-Jan-17        14.41
182d         06-Apr-17        19.58
364d         21-Sep-17        22.14
2y              30-May-18      18.57
3y              29-Jun-19       14.58
5y              15-Jul-21         14.96

Indicative Currency Exchange Rates
Bid        Offer

USDNGN        314.00       315.00
EURUSD         1.1076       1.1278
GBPUSD         1.2306       1.2508
USDJPY          103.17        103.19
USDCHF         0.97375     0.9839
GBPEUR         1.1000       1.1205
USDZAR         13.6942     13.8974
JPYNGN         2.9497       3.0503
CHFNGN        315.39       317.08
EURNGN        352.96      354.32
GBPNGN        400.35      401.75

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