27 December 2017, Sweetcrude, Houston, Texas — The local and international financial market products and services update.
NIGERIA: Nigeria is exiting recession but its economy remains vulnerable, the International Monetary Fund (IMF) said on Friday, after conducting a review of Africa’s largest economy. The regional power climbed out of its first recession in a quarter of a century in the second quarter, but economic growth remains sluggish. That has contributed to a cycle of poverty that drives Nigeria’s yawning wealth inequality as well as social unrest. “Overall growth is slowly picking up but recovery remains challenging,” the IMF said in a statement about the review.
FX: Last week turnover in the I&E is at $1.42B and 60% of the trades were closed in the range of $/N 360 – 364, and a fair chunk c40% were closed in the 340-359 range. Week-on-week the daily average turnover shot up by > 100%, this can be attributed to the large trade executed earlier this week, Dangote cement sold a $350m stake in its company.
FIXED INCOME: Volumes reduced as expected ahead of the holidays. Local real money accounts doing some last minute rebalancing pushed bond yields higher. CBN also gifted the market with another 5bp drop in the OMO rate. We expect tepid activity for the rest of the year.
U.S: The United States announced sanctions on two of North Korea’s most prominent officials behind its ballistic missile program on Tuesday, while Russia reiterated an offer to mediate to ease tension between Washington and Pyongyang.
The new U.S. steps were the latest in a campaign aimed at forcing North Korea – which has defied years of multilateral and bilateral sanctions – to abandon a weapons program aimed at developing nuclear-tipped missiles capable of hitting the United States.
CHINA: China’s top policy makers plan to discuss next month a proposal to amend the national constitution for the first time since 2004, the official Xinhua News Agency said.
The decision was made on Wednesday at a meeting headed by President Xi Jinping, according to the report. It provided no details on the possible change to the constitution, which was first adopted in 1982 and revised four times.
Speculation has swirled that Xi might seek to stay in office beyond 2022 after he unveiled a new leadership line-up in October that didn’t include a clear potential heir. Under the current national constitution, the president can only serve two five-year terms. There are no limits on Xi’s two other key titles: Head of the party and military chief.
COMMODITIES: Oil traded near the highest close in more than two years after an explosion at a pipeline carrying crude to Libya’s biggest export terminal curbed the OPEC nation’s production.
Futures were little changed in New York after rising 2.6% on Tuesday and breaching $60 a barrel for the first time since June 2015. A pipeline run by Waha Oil Company that carries crude to Libya’s Es Sider terminal exploded Tuesday, reducing output by 70,000-100,000 barrels a day. Meanwhile, Saudi Arabia is said to expect oil revenue to jump about 80% by 2023 to help the kingdom record its first budget surplus in a decade.
Macro Economic Indicators
Inflation rate (Y-o-Y) for November 2017 15.91%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at December 21, 2017, 37.780
Money Market Highlights
30 Day 15.2563
90 Day 16.4133
180 Day 18.0639
USD 1 Month 1.56375
USD 2 Months 1.61674
USD 3 Months 1.68577
USD 6 Months 1.83363
Tenor Maturity Yield (%)
91d 29-Mar-18 11.31
182d 21-Jun-18 14.78
364d 29-Nov-18 17.66
2y 15-Nov-19 14.15
3y 15-Nov-20 14.38
5y 27-Jan-22 14.04
Indicative Currency Exchange Rates
USDNGN (I&E) 358.00 359.00
EURUSD 1.1778 1.1985
GBPUSD 1.3300 1.3502
USDJPY 113.17 113.20
GBPEUR 1.1179 1.1384
USDZAR 12.3757 12.5784
EURNGN 426.38 427.74
GBPNGN 481.05 482.44