21 November 2017, Sweetcrude, Houston, Texas — The local and international financial market products and services update.
NIGERIA: Nigeria raised $3 billion in a two-part international bond sale as it seeks to fund a fiscal deficit and reduce its local-currency debt burden. The West African nation split the offering equally between 10- and 30-year tranches. The yield was 6.5 percent for the shorter notes and 7.625 percent for the 30-year portion, down 25 basis points on each tranche from the initial guidance. The offering, its biggest Eurobond issuance ever, is the nation’s third sale this year.
FX: Quiet start in the I&E, liquidity remains decent within the $/N 359 – 362 range. Last week naira strengthened to $/N 362 from $/N 365.50 the previous week and weekly turnover was higher by 8% to 1.02bn. Naira is supported at these levels by offshore investor flows.
FIXED INCOME: Strong tone in bonds led by the 20year paper. This traded below the psychological 14.50% level, as there were whispers of a sizeable order. We expect some resistance at this level and so we could see some slowdown from here in bonds. Demand for bills was not as strong because money market is short N47bn. O/N closed at 30%. N27.66bn was sold at the OMO.
E.U.: The German economy is powering into the end of the year thanks to strong industrial activity and firms are increasingly struggling to find workers to satisfy orders, the country’s central bank said on Monday. The upbeat assessment showed Europe’s largest economy had so far shrugged off the political impasse that followed inconclusive elections in September and looked set to continue on Monday as Chancellor Angela Merkel’s efforts to form a coalition government collapsed. So far, Germany’s influential central bank said a strong influx of new orders suggested manufacturing was driving economic growth. “Buoyed by the boom in industrial activity, the German economy is likely to remain on a strongly expansionary path in the final quarter of 2017, too,” the Bundesbank said in its monthly report.
INDIA: Global credit rating agency Moody’s Investors Services raised India’s sovereign rating for the first time in 13 years, citing the country’s high growth potential in the years to come, thanks to economic and institutional reforms. “The decision to upgrade the ratings is underpinned by Moody’s expectation that continued progress on economic and institutional reforms will, over time, enhance India’s high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term,” the agency said in a statement, upgrading the Indian government’s rating as a local and foreign currency issuer from Baa3 with a positive outlook to Baa2 with a stable outlook.
COMMODITIES: Oil traded near $56 a barrel before U.S. government data forecast to show crude stockpiles resumed declines. Brent for January settlement added 8 cents to $62.30 a barrel on the London-based ICE Futures Europe exchange after dropping 0.8 percent on Monday.
Macro Economic Indicators
Inflation rate (Y-o-Y) for October 2017 15.91%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at November 16, 2017, 34.356
Money Market Highlights
NIBOR (%)
O/N 42.7083
30 Day 17.4873
90 Day 19.7184
180 Day 21.9436
LIBOR (%)
USD 1 Month 1.28719
USD 2 Months 1.38278
USD 3 Months 1.44067
USD 6 Months 1.63211
USD 12 Months 1.72400
Benchmark Yields
Tenor Maturity Yield (%)
91d 15-Feb-18 16.35
182d 17-May-18 18.75
364d 01-Nov-18 18.75
2y 29-Jun-19 14.93
3y 13-Feb-20 15.05
5y 27-Jan-22 14.72
Indicative Currency Exchange Rates
Bid Offer
USDNGN (I&E) 359.01 360.66
EURUSD 1.1642 1.1844
GBPUSD 1.3164 1.3366
USDJPY 112.48 112.51
GBPEUR 1.1194 1.1398
USDZAR 13.9825 14.1859
EURNGN 422.14 423.50
GBPNGN 476.88 478.28