18 October 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The federal government is set to sign a cash-raising oil deal with India for $15 billion by the end of this year, just as Nigeria’s oil production is also expected to rise by 22% to 2.2 million barrels per day in the same period when oil companies lift the force majeure on fields that were shut down as a result of militancy in the Niger Delta. A statement from the Director, Press in the Ministry of Petroleum Resources, Idang Alibi, said that the Minister of State for Petroleum, Dr. Ibe Kachikwu, negotiated a $15 billion investment with India Monday with terms to be agreed, where the Indian government would make an upfront payment to Nigeria for crude purchases.
FX: USDNGN traded the range $/NGN 304.50 – 315.00 Yesterday. The CB advised all banks to resubmit their Friday bid in a defined template yesterday.
FIXED INCOME: Market opened the week with more sell off in the t-bills market. The bashing of short-dated bills picked up from previous closing level while long end closed relatively flat with interest on both left and right-hand side. W-O-W the average t-bill curve moved up 18bps to close at 19.53%. Bond opened the week on a calm note, not a lot of price action but there was Pension Fund interest on the long end towards a market close.
CHINA: China’s broadest measure of new credit exceeded estimates in September to fuel the economy’s continued stabilisation.
Aggregate financing was 1.72 trillion Yuan ($255 billion) last month, the People’s Bank of China said Tuesday, compared with a median estimate of 1.39 trillion yuan in a Bloomberg survey. New Yuan loans stood at 1.22 trillion Yuan while broad M2 money supply rose 11.5% from a year earlier.
Credit is holding up as the economy stabilises, even as policymakers turn their attention to reining in soaring home price gains. PBOC Governor Zhou Xiaochuan said in Washington this month that the government will control credit growth to some extent, while several government agencies have released plans to cut corporate debt and rein in excessive borrowing.
U.K: Economists are taking Mark Carney at his word.
Days after the Bank of England governor said he’ll tolerate faster price gains in his efforts to support the economy, more than 70% of economists inBloomberg’s monthly survey said the Monetary Policy Committee will cut the benchmark rate to a record low 0.1% on Nov. 3. The panel, which will keep its quantitative easing program running as planned, will present new economic projections the same day.
The pound’s 18% drop since the Brexit vote is creating a dilemma for policy makers because it’s fueling faster inflation.
COMMODITIES: When the bosses of the world’s biggest oil companies gather in London on Tuesday, they might have the urge to track down the Saudi energy minister and shake him by the hand.
After two years pursuing a Saudi-led strategy to pump without limits, pummeling industry earnings, OPEC has unexpectedly come to the aid of the oil majors. Last month, it surprised the market by deciding to cut production and put a floor under volatile crude prices.
The question now is how soon they will resume drilling. Prices are near levels where many majors have said they can start investing again after billions of dollars of spending cuts and thousands of job losses sent discoveries to the lowest level in 70 years.
Macro Economic Indicators
Inflation rate (Y-o-Y) for September 2016, 17.90%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Oct 14,2016, 24.160
Money Market Highlights
30 Day 19.5689
90 Day 20.9852
180 Day 22.9104
USD 1 Month 0.5356
USD 2 Months 0.6578
USD 3 Months 0.8816
USD 6 Months 1.2622
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 19-Jan-17 14.92
182d 20-Apr-17 18.26
364d 21-Sep-17 22.38
2y 30-May-18 18.75
3y 29-Jun-19 14.61
5y 15-Jul-21 14.98
Indicative Currency Exchange Rates
USDNGN 314.00 315.00
EURUSD 1.1171 1.1106
GBPUSD 1.2144 1.2346
USDJPY 104.03 104.06
USDCHF 0.98325 0.9934
GBPEUR 1.1028 1.1232
USDZAR 13.9272 14.1306
JPYNGN 3.0497 3.1503
CHFNGN 319.02 320.71
EURNGN 352.96 354.32
GBPNGN 400.35 401.75