Financial market update

10 April 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: In what signifies a major boost to the Nigerian gas master plan, the Federal Government has signed an agreement with Southfield Petroleum Ltd, an indigenous oil company, to build supplementary gas treatment plants at Utorogu and Oben, on a build operate and own (BOO) basis, estimated to cost between $800 million and $1 billion. The Utorogu gas plant has the capacity to process 360 million standard cubic feet of gas per day while Oben facility will process 90 million standard.

EUROPE: Spanish Prime Minister Mariano Rajoy stepped up efforts to reassure investors he can bring the country’s deficit under control as his government fights to avoid becoming the fourth euro-area member to require a bailout. Rajoy met with his health and education ministers on Monday to discuss cuts of more than 10 billion euros ($13 billion as the government reiterated its pledge to reduce the deficit to 3 percent of gross domestic product next year). That includes plans to accelerate the sale of stakes in lenders under government administration, according to an e-mailed statement.

CHINA: China reported an unexpected trade surplus last month as import growth trailed forecasts, underscoring risks of a deeper slowdown in the world’s second-largest economy. Exports increased 8.9% from a year earlier, more than forecast, leaving a trade surplus of $5.35 billion compared with a median projection for a 3.15 billion trade deficit.

US: U.S. corporate profit growth stalled in the U.S. last quarter as companies saw gains in the world’s largest economy eroded by a slump in Europe. Earnings at Standard & Poor’s 500 Index companies, excluding financials, are seen gaining 0.6 percent in the first and the second quarter from a year earlier, according to analysts’ estimates compiled by Bloomberg, the slowest growth rate since 2009.

Bonds – Quiet day to end the week on Thursday ahead of the long weekend, market was still relatively quiet, light trading activity with yields largely flat across the curve.

Bills – With the inflow of about N93.5billion from maturing OMO bills on Thursday, the market trend continued bullish. It is unclear if the CBN will refinance the maturing bills and with a primary auction scheduled for tomorrow we might see rates dip both in the primary and secondary markets.

Money Market – On the back of the inflow of N93.5billion on Thursday in maturing bills, OBB and unsecured O/N rates dipped to 13.00% & 14.00% respectively boosting the liquidity in the system.

FX
                            Hi             Low          Close         Prev.Close
USD/NGN 157.65/75    157.53/63    157.60/70    157.55/65