Financial market update

13 April 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s economy recorded an unprecedented 10trillion naira in GDP as at December 2011. Our income per capita also grew from 1,200 U.S dollars to 1,400 U.S. dollars and this actually moved us from low income country, to Middle Lower income, as per World Bank classification”, Minister of State for Finance, Yerima Ngama said Wednesday at the Presidential Villa,Abuja.

EUROPE: Spain won’t be rescued and it’s “not possible” to do so, Prime Minister Mariano Rajoy said, as lawmakers debated a bill today to tighten the government’s grip on regions that flout budget rules. Rajoy is trying to convince investors and European partners he can reorder the nation’s finances as the surge in funding costs prompted French President Nicolas Sarkozy to cite Spain’s previous Socialist government as an example of poor economic management in his election campaign this week.

INDIA: Indian industrial production rose less than predicted in February as weaker overseas demand and the highest interest rates since 2008 curbed output, with January’s figure revised lower because of a data error. Production at factories, utilities and mines advanced 4.1% from a year earlier, the Central Statistical Office said in a statement in New Delhi on Thursday.

CHINA: China’s new yuan loans were the most in a year and money-supply growth unexpectedly accelerated after Premier Wen Jiabao moved to bolster the economy by cutting banks’ required reserves and helping small companies get funding. Local-currency-denominated loans were 1.01 trillion yuan ($160.1 billion) in March; the People’s Bank of China said yesterday, the biggest surprise above forecasts in more than a year. M2, the broadest measure of money supply, grew 13.4 percent from a year earlier.

Bonds – A sharp change in direction of yields was recorded on Thursday as expected, market reacted to the release of bond auction calendar for Q2 2012. This correction is, however, expected to slow down into the new week as liquidity and positive outlook on economic indicators will play a key role in long term yield destination.

Bills – Early OMO auction announcement yesterday quelled expected demand carried over from Wednesday’s auction, a total of ngn80 bio was offered on the 350dy and 357dy bills, CBN however issued a total of ngn80.03 bio which made yields close relatively flat across board. The 91dy issued traded up 20bps due to a sell-off from stock bought at the auction for rebalancing to earn higher yields on longer tenored bills.

Money Market – OBB and Unsecured rates up to 13.50% and 14.00% respectively, lending rates rising due to OMO auction funding, liquidity level down to about ngn50 bio.

FX
                         Hi             Low          Close           Prev.Close
USD/NGN 157.55/65 157.28/38    157.50/60    157.40/50