Financial market update

04 May 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: A bill to amend the Central Bank of Nigeria Act on Wednesday passed through second reading at the House of Representatives. The bill provides for the appointment of a person, other than the CBN governor, as the chairman, and the exclusion of the deputy governors and directors as members of the bank’s Board of Directors. The bill, according to its sponsors, will enhance transparency and entrench the principle of checks and balances in the administration and operations of the CBN. [PUNCH]

EUROPE: The European Central Bank kept its benchmark interest rate at a record low of 1 percent on Thursday as predicted by every economist in a Bloomberg News survey. Stocks erased gains after Draghi, speaking at a press conference in Barcelona, said the central bankers did not talk about cutting rates yesterday. The Stoxx Europe 600 Index rose 0.1 percent to 257.53 at the close in London yesterday.

CHINA: China is heeding calls from its exporters for a halt to yuan gains and ignoring advice from U.S. Treasury Secretary Timothy F. Geithner, which threatens to damp demand for the nation’s bonds. Intervention has kept the currency at about 6.3 per dollar this year. Geithner said at the start of U.S.-China talks in Beijing on Wednesday “a stronger, more market-determined” exchange rate is important to refocus the world’s second-largest economy on domestic demand.

INDIA: Indian stocks dropped the most in Asia amid concern the government will find it hard to bridge a shortfall in its finances as the rupee slid to a four-month low. The rupee slid as low as 53.475 per dollar, the weakest since Dec. 15, after a report yesterday by HSBC Holdings Plc and Markit Economics showed the pace of manufacturing growth in the country held near the least since December.

Bonds – Another quiet session yesterday, some slight movement along the curve though nothing significant. Trading continues to be cautious and relatively quiet.

Bills – The demand in the market continues to be sustained with the sentiment still quite bullish. Rates dipped across most of the maturities as some market players attempt to front run next week’s auction where they feel rates will dip on the back of pressure from offshore investors.

Money Market – OBB and unsecured O/N rates dipped to close at 11.50% and 12.00% on the back of a liquidity injection from maturing OMO bills yesterday.

FX
                          HI               Low         Close       Prev.Close
USD/NGN  157.27/37   157.12/22   157.15/25   157.30/40