09 November 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Federal Government has reached an outline settlement to resolve a protracted dispute with Western energy companies, under which the groups will be paid $5bn to cover exploration and production costs.
Royal Dutch Shell, ExxonMobil, Eni, Chevron and Total have signed deals relating to the settlement of costs incurred between 2010 and 2015, as they also seek to forge new financing arrangements for their joint ventures in Nigeria, the Financial Times reported on Tuesday.
The settlement, which will be a haircut on the over $6bn the oil majors claim they are owed by Nigeria, needs the approval of two government bodies and the final sign-off from President Muhammadu Buhari.
FX: Yesterday, the spot market witnessed a surge in rates fuelled by the ‘somewhat significant’ flow yesterday estimated to be in the region of $25mio and priced at 380.00.
FIXED INCOME: T-Bills market opened very active yesterday. Yields dropped across the curve because of bid/offer tightening, better price discovery on benchmark bills that previously had wide bid/offer and more demand on the 1-3 months tenor t-bills. The short dates dropped an average of 110bps because CBN hasn’t issued any OMO bills this week, while the whole curve dropped by 30bps.
U.S: Donald Trump was elected the 45th president of the United States in a stunning repudiation of the political establishment that jolted financial markets and likely will reorder the nation’s priorities and fundamentally alter America’s relationship with the world.
The real-estate developer and reality-TV star, a Republican who has never held public office, defeated Democrat Hillary Clinton after a punishing campaign that exposed searing divides in the American public. Trump will have a Republican-controlled Congress to enact his agenda and the ability to appoint Supreme Court justices in the coming years.
E.U: European Central Bank Governing Council member Klaas Knot said the likely victory of Donald Trump in the U.S. presidential election reflects skepticism over globalisation and expressed concern over the fallout in financial markets.
“There are doubts about the advantages free trade has brought us; that’s not right, according to me,” Knot, who heads the Dutch central bank, said in Amsterdam on Wednesday as the vote count showed Trump taking key battleground states. “We will follow the markets thoroughly.”
A rise in the euro against the dollar and any gains in bond yields threaten to undermine the ECB’s attempts to safeguard the euro area’s gradual recovery.
COMMODITIES: Raw materials and the companies that produce them were whipsawed as Donald Trump was elected U.S. president in a shock victory over Hillary Clinton.
Oil and agricultural commodities declined on Wednesday, while industrial metals rebounded from earlier losses and gold surged with haven assets as the Republican pulled off a huge electoral upset. Traders rushed to unwind bets they piled into over the past two days amid predictions that Democrat Clinton would sweep to an easy victory. Shares of gold miners jumped while those of energy companies across Asia slid.
Inflation rate (Y-o-Y) for September 2016, 17.90%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Nov 07,2016, 24.024
Money Market Highlights
30 Day 16.1603
90 Day 17.8479
180 Day 19.2082
USD 1 Month 0.5353
USD 2 Months 0.6706
USD 3 Months 0.8867
USD 6 Months 1.2515
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 02-Feb-17 14.88
182d 04-May-17 19.53
364d 21-Sep-17 21.87
2y 30-May-18 18.54
3y 29-Jun-19 14.63
5y 15-Jul-21 15.07
Indicative Currency Exchange Rates
USDNGN 314.00 315.00
EURUSD 1.1011 1.1213
GBPUSD 1.2311 1.2513
USDJPY 103.42 103.46
USDCHF 0.96825 0.9784
GBPEUR 1.1072 1.1275
USDZAR 13.4037 13.6073
JPYNGN 2.9897 3.0903
CHFNGN 323.22 324.91
EURNGN 345.57 346.94
GBPNGN 400.35 401.75