20 February 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Nigeria’s central bank plans to boost dollar sales for school fee payment and travel abroad so as to reduce the premium paid on the black market and support the naira, a senior banker said on Saturday. The regulator met with senior bankers at an industry event on Friday to discuss ways to address dollar shortages on the official market. The central bank disbursed $2.83 billion to critical sectors of the economy in December and January. However, analysts estimate outstanding dollar demand at around $4 billion. The bank has been trying to clear the backlog via a forward contracts sold to manufacturing, agriculture and airline companies, hoping also to help drag Nigeria out of its worst recession in 25 years, triggered by low oil prices. But retail currency users have been left out, fuelling the black market. On Friday, the naira hit a new low of 516 to the dollar on the unofficial market.
FX: The week was dominated by renewed concerns around naira in the parallel market. The local unit has lost 14 big figures week-on-week as demand pressure has increased after offers for the greenback broke the 500 level last week.
FIXED INCOME: Bond market had opened still driven by the aftermath of Wednesday’s auction. The on-the-run bonds remained popular and the tone was firm till the OMO auction announcement. Sellers emerged in both bills and bonds, erasing the day’s gains and spreads were wider across the curve to close. Expectations were that the OMO rate would adjust lower following the strong auction prints and it was a positive surprise it remained unchanged.
SAUDI ARABIA: Complications in restructuring Saudi Arabia’s state-owned oil company and disentangling its finances from those of the government are slowing the march toward what is expected to be the biggest initial public offering in history. The hotly anticipated listing of a minority stake in Saudi Arabian Oil Co., the kingdom’s corporate crown jewel, is now unlikely to happen until late 2018 at the earliest, and if foreign advisers have their way, wouldn’t happen until 2019, according to more than a half-dozen people involved in the process. While some Saudi officials are pushing for a fast IPO, others are more focused on following advice of bankers to get a structure in place that would convince shareholders that Aramco is more akin to valuable oil companies such as Exxon Mobil Corp. or Royal Dutch Shell PLC than it is to other state-owned oil companies that tend to carry a lower valuation.
FRANCE: Government bonds in France and southern Europe tumbled again Friday, with fresh data showing that foreign investors continue to dump French debt ahead of the country’s presidential election. The spread between French and German 10-year government bond yields widened to 0.74 percentage point on Friday from 0.66 percentage point Thursday. French bonds are now trading in the same direction as those of the southern European countries, whose debt was hit hardest by the euro sovereign-debt crisis. Bonds slid in Italy, Spain, Portugal and Greece on Thursday and Friday. Concerns for the currency bloc are increasing once again as betting odds rise for an election victory for Marine Le Pen, leader of the far-right National Front who has promised to take France out of the Euro- zone.
COMMODITIES: Oil prices rose on Monday but the gains were limited as investors gauged whether an increase in U.S. drilling rigs and record stockpiles would undermine efforts by producers to cut output and bring the market into balance. Brent futures LCOc1 were up 17 cents at $55.98 a barrel at 0616 GMT, while U.S. West Texas Intermediate crude CLc1 was up 15 cents at $53.55. Both contracts earlier fell slightly in quiet trading.
Macro Economic Indicators
Inflation rate (Y-o-Y) for December 2016, 18.72%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Feb 16, 2017, 29,051
Money Market Highlights
NIBOR (%)
O/N 18.6250
30 Day 17.0924
90 Day 18.8667
180 Day 22.8372
LIBOR (%)
USD 1 Month 0.65444
USD 2 Months 0.72833
USD 3 Months 0.92733
USD 6 Months 1.23239
USD 12 Months 1.72400
Benchmark yields
Tenor Maturity Yield (%)
91d 25-May-17 15.03
182d 17-Aug-17 19.00
364d 01-Feb-18 21.76
2y 29-Jun-19 15.87
3y 13-Feb-20 16.99
5y 27-Jan-22 15.84
Indicative Currency Exchange Rates
Bid Offer
USDNGN 314.50 315.00
EURUSD 1.0521 1.0723
GBPUSD 1.2329 1.2531
USDJPY 113.12 113.15
USDCHF 0.99765 1.0078
GBPEUR 1.1600 1.1804
USDZAR 13.0179 13.2213
JPYNGN 2.7397 2.8403
CHFNGN 313.42 315.11
EURNGN 338.92 340.28
GBPNGN 404.78 406.18