14 November 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: Despite the massive devaluation of the Naira, foreign portfolio investors have continued to adopt a wait and see attitude toward Nigeria hoping for further devaluation of the naira. Investigation showed that foreign investors relatively showed more interest in government bonds compared with their interest in shares. Across the economy, interest in direct investment from foreign investors is low, primarily due to foreign exchange volatility and Nigeria’s weak macroeconomic outlook.
Data released by the National Bureau of Statistics NBS, on funds inflow as either loans to companies or investment targeted report has shown that Nigeria needed to take its economic diversification more seriously as the one route to increasing foreign exchange inflow into the nation’s reserves.
FX: Lackluster performance in the spot market all through last week. Most trades are being matched with customer flows by the market players. Traded range for Friday $/NGN 304.75-315.50
FIXED INCOME: Fixed income market even sold off some more on Friday. The tight system liquidity continues to be the main driver. There will be no respite till the OMO maturity of the 17th of November . We expect the same tone at the start of this week. Bond and bill auction on Wednesday this week.
CHINA: China has started a market for insuring bonds with the equivalent of only one team playing.
Lenders were the main participants in the credit-default swap market started on Oct. 31 as regulators have yet to allow insurers or mutual funds to take part, according to the International Swaps and Derivatives Association, an industry group whose members include the world’s biggest banks. Ten institutions conducted 15 CDS deals involving 300 million Yuan ($44 million) of notional principal on the first day, according to the China Foreign Exchange Trade System press official, which declined to disclose more recent trading data.
U.S: A global bond rout is intensifying, sending U.S. 30-year yields above 3% for the first time since January, on speculation Donald Trump will increase spending to boost the world’s largest economy.
The selloff wiped a record $1.2 trillion off the value of bonds around the world last week when Trump won election as U.S. president. Investors rotated into stocks, as global developed-market shares beat investment-grade debt by the most since 2011 amid concern the stimulus will stoke inflation and lead the Federal Reserve to raise interest rates.
COMMODITIES: Oil held losses near the lowest close in seven weeks as Iran boosted output and as U.S. explorers raised the number of active rigs to the most since February, signalling the persistence of a global supply glut.
Futures were little changed in New York after falling 4.1% the previous two sessions. Iran increased production at three fields faster than expected, while Saudi Arabia said the Organization of Petroleum Exporting Countries must agree to trim output to stabilise markets. U.S. drillers have added more than 130 rigs since May, according to data Friday from Baker Hughes Inc., as increased efficiency allowed explorers to continue expanding oilfield work.
Inflation rate (Y-o-Y) for October 2016, 18.30%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Nov 08,2016, 24.062
Money Market Highlights
30 Day 17.5789
90 Day 19.4165
180 Day 22.1505
USD 1 Month 0.5381
USD 2 Months 0.6948
USD 3 Months 0.9056
USD 6 Months 1.2621
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 16-Feb-17 18.20
182d 11-May-17 20.06
364d 02-Nov-17 22.60
2y 30-May-18 19.05
3y 29-Jun-19 14.76
5y 15-Jul-21 15.18
Indicative Currency Exchange Rates
USDNGN 314.00 315.00
EURUSD 1.0659 1.0862
GBPUSD 1.2399 1.2601
USDJPY 107.70 107.73
USDCHF 0.98855 0.9987
GBPEUR 1.1516 1.1720
USDZAR 14.3799 14.5844
JPYNGN 2.8797 2.9803
CHFNGN 323.22 324.91
EURNGN 345.57 346.94
GBPNGN 400.35 401.75