Financial market update

23 March 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Coordinating Minister of the Economy and Minister of Finance Ngozi Okonjo-Iweala and former Colombian Finance Minister Jose Antonio Ocampo are set to be nominated to lead the World Bank, according to sources with knowledge of emerging market efforts to find candidates. The candidacies of Okonjo-Iweala and Ocampo, who have credentials as both economists and diplomats, and according to sources the respective backing of South Africa and Brazil, pose a challenge to the United States, whose hold on the top post has never been contested.

EUROPE: European stocks fell for a fourth day, the longest losing streak since November, as manufacturing contracted in China and the euro area. The Stoxx Europe 600 Index retreated 1.2 percent to 265.48 at 4:34 p.m. in London on Thursday, the lowest since March 12. The gauge has still gained 8.6 percent this year as the European Central Bank disbursed 1 trillion euros ($1.3 trillion) to the region’s lenders and U.S. economic data surpassed estimates.

INDIA: India’s rupee fell the most in more than three months on speculation the slump in the nation’s stocks will spur foreign fund outflows. The BSE India Sensitive Index, or Sensex, fell 2.3 percent, the most in Asia yesterday. The nation’s fiscal deficit for the year ending March 31 is estimated to widen to 5.9 percent of gross domestic product, 1.3 percentage points more than the goal, Finance Minister Pranab Mukherjee said on March 16 raising concerns about the government’s ability to control spending.

Bonds – Yields still dipping in the bond market yesterday though only slighty as the rally slows. In reaction to an announcement of the CBN coming in to mop up liquidity yields went up but came off again relatively as sharply as they went up to close lower.

Bills – In reaction to the primary auction held on Wednesday which closed lower than most peoples’ expectations, rates dipped on Thursday across all maturities in the market except for the 07 March 13 which went up about 82bps in reaction to the CBN coming out to offer OMO bills maturing 22 Nov 12 and 07 Mar 13 which closed relatively higher than secondary market levels. The re-emergence of OMO activity will slow down secondary market demand.

Money Market – With the inflow of FAAC unsecured rates are averaging dipped about 150bps to 12.50%. As expected the CBN was out with OMO offerings of N100bio in an attempt to start mopping up some liquidity from the market.

FX
                                 Hi            Low             Close                Prev.Close
USD/NGN   157.65/75     157.51/61    157.57/67       157.60/70