Financial market update

05 March 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA:  The CBN Governor of the Central Bank of   Nigeria, Mr. Lamido Sanusi, on Wednesday urged  governors of African Central Banks to improve economic indicators. Sanusi’s call followed the move by the  Association of African Central Banks to set up an African Central Bank that would help to ensure that the region’s economies return to the path of sustainable growth. The apex bank boss, who said this during his opening remarks at the first ordinary meeting of AACB, noted that the move would help to facilitate  convergence in the region.

EUROPE: European high-yield companies are tapping the U.S. bond market at a record pace as investors funnel unprecedented volumes of cash into dollar-denominated junk debt funds and a sovereign-debt crisis restricts bank lending in the region.  Issuers led by a German company have sold USD8.8 billion of the debt in dollars this year, following USD16.4 billion in all of 2011 according to research.  The portion of European speculative-grade offerings sold in dollars has soared to 44 percent this year, up from 31 percent in 2011.

CHINA: China pared the nation’s economic growth target to 7.5 percent from an 8 percent goal in place since 2005, a signal that leaders are determined to reduce reliance on exports and capital spending in favour of consumption.  Officials will also aim for inflation of about 4 percent this year, unchanged from the 2011 goal, according to a state-of-the-nation speech that Premier Wen Jiabao delivered to about 3,000 lawmakers at the annual meeting of the National People’s Congress in Beijing today.

Bonds –  Very quiet session last Friday with only a handful of trades going through and very minimal movement  across the curve.

Bills –  Resolute in their strategy to ensure liquidity levels

remain under control the CBN offered another N50billion on Friday in OMO bills without deviating from their pattern of cutting off at 15.55% discount at the top. Secondary market activity has sided more with sell downs to create room for the fresh set of bills on the books, there has been very little  demand feeding into the secondary market this week.

Money Market – OBB & unsecured rates have gone up about 150bps to 14.00% & 14.50% respectively as the FAAC flow thins out on the back of the large sums of OMO bills which have been used to mop up liquidity.

FX
                                Hi             Low           Close             Prev.Close
USD/NGN  157.98/08    157.66/76   157.95/05      157.63/73