07 September 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Nigeria’s sovereign wealth fund stood at $2 billion this month with the investment agency seeking further growth through agriculture and the addition of asset management, its chief executive officer said. The government’s contribution stands at $1.5 billion, with the rest including funds owned by the institution and those managed for several government agencies, Uche Orji of the Nigeria Sovereign Investment Authority said in an interview on Wednesday in Kazakhstan’s capital, Astana. The authority has revamped 11 fertilizer-blending plants so far this year as part of President Muhammadu Buhari’s initiative to boost farming output and reduce the economy’s dependence on oil, which contributes two-thirds of government revenue. Africa’s most populous country of more than 180 million people is also the continent’s biggest oil producer.
FX: After the holidays, Offers slightly inching up to about the 359-360 levels. Interesting to note that the NAFEX fixing- tracking activities in the I&E window- remained flat from Tuesday. The CBN is yet to release the wholesale auction done on Tuesday.
FIXED INCOME: Very active session yesterday as the reality of CBN’s action hits harder. Demand from offshore and locals caused the long end of the bill curve to drop by 40bps (particularly Aug bills). Bond market followed suit though slight resistance was seen at c.16.50% on the 5, 10 and 20 year. In the absence of any change, the NGN curve will compress further though funding for FX auctions could bring intermittent spikes. At the OMO auction, the 3mth bill eventually printed at 16% discount after its series of unsuccessful outings. However, 99% of the N39.80bn sold was on the 6m bill.
E.U.: Mario Draghi is finally having the talk he has long sought to avoid.
The European Central Bank president opened a debate about the future path of stimulus on Wednesday after the Governing Council was presented with various scenarios for winding down asset purchases, according to people familiar with the matter.
For months, Draghi put off a discussion, concerned about low inflation and wary of market turmoil at any hint of an exit. Now, as the risk increases that leaving a decision too late makes investors jumpy, the challenge is to find a way to begin dialing down quantitative easing while providing assurance that any moves will be gradual.
U.S: President Donald Trump’s unexpected decision to spurn his Republican allies in Congress by striking a short-term debt-limit deal with Democrats leaves the GOP reeling and lawmakers bracing for a bruising battle in December.
Trump’s move undercut GOP leaders in the House and Senate, as well as his own Treasury secretary, who had been arguing for a longer-term extension. It also left Republicans, who were blindsided by the deal, angry and disappointed with their own leaders and, to a lesser degree, Trump.
COMMODITIES: Sellers of crude to U.S. refineries that are still assessing the damage from Hurricane Harvey are seeking an alternative home for their supply.
South American oil for the Gulf Coast is being offered to Asian buyers for October arrival instead, according to traders who asked not to be identified. The refiners are being approached as they prepare to secure crude from within the region and the Middle East for November. At least one processor in Europe is also being informed about the availability of a Nigerian cargo, just days before the shipment is scheduled to load from West Africa.
Macro Economic Indicators
Inflation rate (Y-o-Y) for June 2017 16.10%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at August 29, 2017, 31.811
Money Market Highlights
30 Day 17.9922
90 Day 20.1533
180 Day 21.9442
USD 1 Month 1.23111
USD 2 Months 1.27500
USD 3 Months 1.31722
USD 6 Months 1.45500
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 07-Dec-17 19.08
182d 08-Mar-18 19.12
364d 16-Aug-18 21.05
2y 16-Aug-19 16.73
3y 16-Aug-20 16.74
5y 27-Jan-22 16.47
Indicative Currency Exchange Rates
USDNGN 314.50 315.00
EURUSD 1.1879 1.2081
GBPUSD 1.2993 1.3197
USDJPY 108.89 108.92
GBPEUR 1.0832 1.1035
USDZAR 12.7102 12.9135
EURNGN 429.89 431.62
GBPNGN 470.02 471.44