23 March 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Nigeria’s senate approved a plan on Wednesday for the issuance of an additional $500 million of Eurobonds after the demand for the sale of $1 billion of debt securities in February exceeded supply.
The West African nation wants to “take advantage of favorable market conditions,” the government said on its Twitter account. The proceeds from the sale will fund projects in last year’s budget, it said.
Nigeria has sought other sources to finance government spending since the price of crude, its main export, tumbled from peaks reached in the middle of 2014 and violence in the southern oil-rich delta cut output. Africa’s most populous country, on its return to international capital markets for the first time in almost four years in February, said the Eurobond sale was oversubscribed by eightfold.
FX: NGN reportedly gained about 20 points on the parallel markets yesterday – offered at $/NGN410 [levels last seen on November 11, 2016]. The USDNGN OTC rates was re-priced yesterday following the maturity of the March contract.
FIXED INCOME: Tone at Tuesday’s MPC made street nervous as it suggested that rates may remain elevated. Profit taking was seen across the bond curve. After offers on on-the-run bonds settled at c.16%, some real money demand trickled in on the long end. Money market liquidity still remains a challenge and drove bill yields higher. We expect a quiet session today particularly in bonds. T- Bill auction results yet to be released.
COMMODITIES: Oil rebounded on speculation record U.S. crude stockpiles that have dragged prices below $50 and undermined OPEC’s output cuts may finally be set to shrink.
Futures for May delivery added as much as 0.8% in New York after falling 0.4% Wednesday. Speculation that refiners will increase oil purchases and reduce U.S. crude supplies grew after data Wednesday showed gasoline stockpiles slid a fifth week to the lowest since January and distillates dropped a sixth week to the least since December.
E.U: The European Central Bank is about to give lenders a last offer of free long-term cash. In return, it’ll get a sense of any concern over the outlook for its extraordinary stimulus as the economic recovery spurs calls for an exit plan.
The final round of Targeted Longer-Term Refinancing Operations — four-year loans at an interest rate that starts at zero and could go lower — will be allotted to banks on Thursday at 11:30 a.m. Frankfurt time. The take-up could be as low as 30 billion euros ($32 billion) or as high as 750 billion Euros, according to a Bloomberg survey, with a median estimate of 110 billion euros.
U.K: Parliament will return to work on Thursday after London’s worst terror attack in more than a decade left five people dead, including the assailant and the police officer he stabbed.
The attack, which also injured 40 people, shut down Parliament on Wednesday afternoon, leaving hundreds of lawmakers and workers in lockdown for several hours. Prime Minister Theresa May was in the lobby of the House of Commons before she was whisked to safety in a Jaguar. Lawmakers will return on Thursday morning, when May is due to address the lower house.
Authorities are working on the assumption the attack was “Islamist-related terrorism,” and police think they know the identity of the assailant, said Mark Rowley, head of counter-terrorism policing. Several arrests were made during a raid in Birmingham, central England, in connection with the attack, according to Sky News and the BBC.
Macro Economic Indicators
Inflation rate (Y-o-Y) for February 2017, 17.80%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Mar 21, 2017, 30.349
Money Market Highlights
30 Day 16.9644
90 Day 21.2470
180 Day 23.4088
USD 1 Month 0.97722
USD 2 Months 1.02000
USD 3 Months 1.15622
USD 6 Months 1.43489
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 22-Jun-17 17.94
182d 21-Sep-17 19.66
364d 15-Mar-18 22.62
2y 29-Jun-19 15.74
3y 13-Feb-20 15.93
5y 15-Jul-21 16.00
Indicative Currency Exchange Rates
USDNGN 314.50 315.00
EURUSD 1.0685 1.0887
GBPUSD 1.2388 1.2590
USDJPY 111.16 111.19
USDCHF 0.98845 0.9986
GBPEUR 1.1478 1.1681
USDZAR 12.4575 12.6610
JPYNGN 2.6997 2.8003
CHFNGN 306.44 308.13
EURNGN 334.14 335.50