13 February 2018, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Nigerian stocks shed 1.5% on Monday in late trades to drop to one month low as investors sold off shares from the relatively liquid banking sector. The stock market, hit by a global risk-off sentiment, fell for the sixth straight day to 42,633 points, a level last seen in January. Investors have been closing local positions on concern that rising global inflation would lead to higher interest rates in developed economies and draw capital away from emerging markets. Nigeria’s benchmark index has slipped from its January highs but is still up 12.8% so far this year. The index of Nigeria’s top 10 lenders declined 3.78% to lead the main index lower.
FX: We started the week taking a cue from last week’s close. Not much activity on the day in the interbank I&E window. We still see the traded range at $/N 359 – 361.50. The CB announced a wholesale auction yesterday with $100mio on offer.
FIXED INCOME: With no sellers at open yesterday, bond market saw buyers (locals) across the curve.
At the OMO, N17bn of 11 Oct 2018 bill was sold with stop rate unchanged at 14.4% discount.
With no FX refunds in as at the time of the result, the tone in T-bills ended with the sellers, reversing most gains seen before midday. Overall, not much client flows in both bills and bonds.
U.S: The U.S. budget deficit widened in the first four months of the fiscal year as growth in spending exceeded revenue.
The U.S. fiscal gap increased by 11%to $175.7 billion between October and January from the same period a year earlier, the Treasury Department said in a report on Monday. Outlays rose by 5% to $1.3 trillion, while receipts increased by 4% to $1.1 trillion.
The budget deficit widened the last fiscal year to the largest since 2013. The gap is expected to keep increasing as an aging population boosts spending on healthcare and retirement programs and from tax cuts enacted this year that are expected to cut revenue by up to $1.5 trillion over the next decade. On Sunday, White House budget director Mick Mulvaney said the budget deficit will increase this year but could narrow over time with economic growth.
SOUTH AFRICA: South Africa’s ruling African National Congress decided to tell President Jacob Zuma to step down after he refused the top party leadership’s request for him to resign voluntarily, according to five people familiar with the matter.
The ANC’s National Executive Committee took the decision during a 13-hour meeting that ended early Tuesday in Pretoria, the capital. It was called to decide on a transition of power to the party’s new leader, Cyril Ramaphosa, said the people, who declined to be identified because the decision hasn’t been made public.
COMMODITIES: The prospect of a U.S. shale resurgence is keeping oil from being fully swept up in a wave of relief spreading across risk assets.
Crude’s gains have lagged behind those in stocks as markets start to stabilize after a global rout spurred a near 10% slump in oil last week. Futures in New York are up 0.6% on Tuesday after nudging up 0.2% in the previous session when U.S. equities rallied over 1%. Forecasts for rising American inventories and higher shale supplies are fuelling concerns that oil’s re-balancing may be derailed.
Macro Economic Indicators
Inflation rate (Y-o-Y) for December 2017 15.37%
Monetary Policy Rate current 14.00%
FX Reserves (Moving Avg Bn $) as at February 08, 2018, 41,092
Money Market Highlights
30 Day 15.5224
90 Day 16.2158
180 Day 17.6566
USD 1 Month 1.58320
USD 2 Months 1.68886
USD 3 Months 1.82000
USD 6 Months 2.03831
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 17-May-18 14.10
182d 09-Aug-18 15.52
364d 31-Jan-19 16.01
2y 13-Feb-20 14.01
3y 17-Jan-21 13.94
5y 27-Jan-22 13.85
Indicative Currency Exchange Rates
USDNGN (I&E) 359.00 360.00
EURUSD 1.2221 1.2423
GBPUSD 1.3759 1.3961
USDJPY 107.66 107.70
GBPEUR 1.1147 1.1351
USDZAR 11.8322 12.0358
EURNGN 443.60 444.96
GBPNGN 499.07 500.46