19 March 2018, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Following the concession made by the Senate to screen and confirm the nominees of President Muhammadu Buhari to fill the posts of deputy governors of the Central Bank of Nigeria (CBN) and the four members-designate of the Monetary Policy Committee (MPC), the CBN has said it will hold its first meeting of the MPC this year on April 3 and 4. This is just as Standard and Poor’s (S&P) has affirmed its ‘B/B’ long and short-term sovereign credit ratings on Nigeria. The agency also assigned a “stable outlook” on the country. The MPC was unable to hold its first meeting last January because it could not form a quorum. This arose from the July 2017 resolution of the Senate to suspend all confirmation processes for presidential nominees whose offices are not specifically listed in the 1999 Constitution.
FIXED INCOME: Very quiet in bonds on Friday but the various tenors were quoted lower on little or no demand. Not the busiest of days either in bills with the activity seen skewed to buyers. Ample money market liquidity (~N350bn) still expected into this week and so we should start off with an OMO auction. Bond auction on Wednesday – N10b of 5yr, N30b of 7yr (new issue) and N30bn of 10yr will be offered. O/N closed at 5%.
FX: Rebound in the I&E turnover last week, rumoured to be buoyed by FDI flows. In the first 4 sessions of the week, $1,415.99m traded in the range of $/N 347.00 – 362.00, an increase of 162% compared to the same period of the preceding week.
CHINA: Harvard-educated Liu He has been named one of China’s four vice-premiers – in charge of economic policies and financial issues. He has been called the brains behind China’s shift in economic policy, which has seen a focus on slower but more sustainable consumption-based growth, rather than the debt-fuelled investment and exports that have driven the country’s expansion of the past four decades. How dedicated he is to stick to this goal while cutting debt and opening up financial markets, is going to be closely watched by China’s global trading partners. Mr. Liu’s elevation was announced on the penultimate day of the annual sitting of the National People’s Congress (NPC).
U.K.: The British Chambers of Commerce (BCC) has raised its UK growth forecast but warns it will be among the worst performing G7 economies until 2020. The BCC has raised its GDP forecast for 2018 from 1.1% to 1.4% and in 2019 from 1.3% to 1.5%. Its first forecast for 2020 is for 1.6% growth. The hike is driven by slightly stronger than expected consumer spending. And it says the UK’s export performance is expected to remain robust on the back of strong global growth. But it says with imports also likely to continue to grow, the contribution of net trade to the UK’s GDP growth over the near term is to be limited, “particularly with little evidence of a sterling boost to the UK’s overall net trade position”. And despite the upgrades, UK GDP growth is set to remain well below the historical average throughout the forecast period.
COMMODITIES: Oil slipped as U.S. explorers resumed their drilling binge, raising concerns over whether output cuts by OPEC and its allies will be enough to clear a glut despite a pledge from Russia that it’s committed to the curbs. Brent for May settlement fell 25 cents to $65.96 a barrel on the London-based ICE Futures Europe exchange. The contract climbed $1.09, or 1.7 percent, to $66.21 on Friday.
Macro Economic Indicators
Inflation rate (Y-o-Y) for February 2017 14.33%
Monetary Policy Rate current 14.00%
FX Reserves (Moving Avg Bn $) as at March 15, 2018, 44,468
Money Market Highlight
NIBOR (%)
O/N 13.3000
30 Day 15.3721
90 Day 16.4103
180 Day 18.1763
LIBOR (%)
USD 1 Month 1.82207
USD 2 Months 1.93450
USD 3 Months 2.20175
USD 6 Months 2.36363
USD 12 Months 1.72400
Benchmark Yields
Tenor Maturity Yield (%)
91d 14-Jun-18 14.21
182d 13-Sep-18 14.77
364d 14-Feb-19 15.08
2y 13-Feb-20 13.38
3y 15-Jul-21 13.42
5y 27-Jan-22 13.61
Indicative Currency Exchange Rates
Bid Offer
USDNGN (I&E) 359.00 360.65
EURUSD 1.2180 1.2382
GBPUSD 1.3859 1.4061
USDJPY 105.93 105.96
GBPEUR 1.1265 1.1469
USDZAR 11.9375 12.1409
EURNGN 441.61 442.97
GBPNGN 502.05 503.45
