21 February 2018, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Nigeria’s state oil firm said on Tuesday it had spent $5.8 billion on fuel imports since late 2017, as it combats a fuel shortage that has left people queuing for hours at filling stations and hobbled an already-struggling economy. “The corporation’s intervention became necessary following the inability of the major and independent marketers to import the product because of the high landing cost which made cost recovery and profitability difficult,” the Nigerian National Petroleum Corporation (NNPC) said in a statement. The price of gasoline is a highly charged subject in Nigeria, Africa’s largest oil exporter. President Muhammadu Buhari in 2016 raised the top gasoline price to 145 Naira ($0.4603) per litre, a 67% hike, but did not remove a cap for fear of hurting people on low incomes. The price cap makes it tough for many importers to profit from gasoline and NNPC has imported as much as 90% of the nation’s gasoline needs over the past year.
FX: Naira remains stable in the I&E window, traded range is 358 – 360 , with a daily turnover averaging $160m. Based on FMDQ data, offshore inflows accounted for 59.41% in the first week of February (01-09/02) out of a total of $1,2472m.
FIXED INCOME: Decent two-way flow in bonds yesterday, local clients were sellers and interbank players buying in bits.
In the bills space, there was demand as there were no expected naira outflows in the absence of an OMO auction.
We expect the auction to resume on Thursday as CBN’s decision to stay away yesterday and today could only be an attempt to support the bond auction.
SOUTH AFRICA: South Africa’s inflation rate slowed in January, easing pressure on the central bank to maintain a tight monetary stance.
Inflation slowed to 4.4% from 4.7% in December, Pretoria-based Statistics South Africa said Wednesday in a report on its website. The median of 14 economists’ estimates in a Bloomberg survey was for 4.4%. Prices rose 0.3% in the month.
Price growth has been within the Reserve Bank’s target range of between 3%t to 6% for 10 months, the longest run since 2015. The Monetary Policy Committee left its benchmark lending rate unchanged for the third straight meeting last month as the risk of a credit-ratings downgrade persists.
U.K: Brexit Secretary David Davis will reassure the European Union that the U.K. won’t try to undercut the bloc by tearing up regulations after the split, making the case for mutual trust between regulators on each side.
“Mutual recognition” of regulatory standards should continue after the divorce, Davis will say in a speech in Vienna on Tuesday. Cars manufactured and approved for sale on one side of the channel should still be approved for sale on the other, according to excerpts released by his office.
COMMODITIES: Following a two-week rollercoaster where oil dropped with global equities and then rebounded from the rout with other risk assets, investors may now take further price cues from upcoming U.S. stockpiles data.
Crude in New York lost as much as 1.2% after closing at a two-week high on Tuesday, propped up by optimism that a global glut may be dissipating at a faster pace than expected. The focus will now shift to U.S. inventories, which are forecast to have risen by 3 million barrels last week. As OPEC and its allies including Russia persist with output curbs, a boom in American supplies could undermine their efforts to re-balance the market.
Macro Economic Indicators
Inflation rate (Y-o-Y) for January 2017 15.13%
Monetary Policy Rate current 14.00%
FX Reserves (Moving Avg Bn $) as at February 16, 2018, 41,621
Money Market Highlights
NIBOR (%)
O/N 19.2500
30 Day 15.4972
90 Day 16.3271
180 Day 18.4634
LIBOR (%)
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
Benchmark Yields
Tenor Maturity Yield (%)
91d 17-May-18 14.39
182d 16-Aug-18 15.57
364d 14-Feb-19 15.98
2y 13-Feb-20 13.92
3y 17-Jan-21 13.74
5y 27-Jan-22 13.54
Indicative Currency Exchange Rates
Bid Offer
USDNGN (I&E) 359.00 360.00
EURUSD 1.2315 1.2517
GBPUSD 1.3921 1.4123
USDJPY 106.57 106.60
GBPEUR 1.1191 1.1395
USDZAR 11.5419 11.7454
EURNGN 446.31 447.67
GBPNGN 504.08 505.48
