23 January 2012, Sweetcrude, Lagos – Local and international financial market update.
WORLD BANK : The World Bank has sounded a note of warning to developing countries to prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects. The Bretton Woods institution, in its newly-released Global Economic Prospects (GEP) 2012, said lowered its growth forecast for 2012 to 5.4% for developing countries and 1.4% for high-income countries, down from its June estimates of 6.2 and 2.7 per cent (1.8 per cent for the Euro Area), respectively.
INDIA: Indian rupee strengthened on speculation international investors will quicken purchases of the nations assets as inflation slows. Foreign funds boosted holding of Indian debt by $3.2 bn this month to $29.3bn as of Jan 19 and investment in stock rose by $1.2 bn. Inflation slowed to 7.47% in Dec from 9.11% the previous month.
CHINA: As China celebrates the new year, the dawning of the Year of the Dragon, Moody’s says they could be in heading for a soft landing. All thanks to the work of the regulators to slow non bank financing from 45% in 2010 to 25% in 2011.
Bonds – The market continues to trade relatively stable on Friday, continued demand feeding into the short end of the curve. First bond auction for the year comes up next Wednesday and this will help stimulate the long end of the curve which has been very quiet in the last few trading days.
Bills – Some profit taking today after rates have been knocked down over the week. The FAAC funds are expected in early next week which ordinarily should put some downward pressure on rates but the CBN will likely come in to offer OMO bills to mop up the excess liquidity which will push rates up. A lot of volatility expected.
Money Market – OBB & unsecured rates are stable at 14.00% & 14.50% FAAC flows are expected in early next week after being approved earlier in the week. ”
FX
Hi Low Close Prev/Close
USD/NGN 161.30/40 160.30/40 160.85/95 161.42/52
NIBOR(%) LIBOR (%)
O/N 14.4167 USD 1 month 14.4167
7 Day 14.7500 USD 2 month 14.7500
30 Day 15.2917 USD 3 month 15.2917
60 Day 15.6667 USD 6 month 15.6667
90 Day 15.9167 USD 12 month 15.9167
Y/Y Consumer Inflation December 2011 : 10.30%
FX Reserves: 16 January 2012 (USD bn) 33.72
MPR 12.00%
Source: FMD and CBN
