Financial market update

25 April 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: President Goodluck Jonathan has restated Federal Government’s commitment to produce four million barrels per day (bpd) of crude oil and maintain reserves of 40 billion barrels within this decade. Speaking at the recent official inauguration of the Floating Production Storage Offshore (FPSO) of Total’s giant offshore field, Usan oil field, President Jonathan said a key objective of his administration’s reform agenda for the petroleum sector was the expansion of crude oil reserve base and the country’s production capacity.

EUROPE: European lenders, more reliant than ever on emergency aid after borrowing $1.3 trillion from their central bank, may need additional cash infusions until policy makers stem the crisis engulfing Spain and Italy.

After more than 30 bond sales in the first quarter, no bank has sold unsecured debt this month, and the cost of insuring against default has soared to levels last seen in January.

Financial stocks, which rallied 20 percent following the European Central Bank’s December decision to provide unlimited three-year loans, are now 2 percent lower since then.

CHINA: China’s stocks rose for a second day after Premier Wen Jiabao pledged to maintain steady economic growth and U.S. housing data bolstered the outlook for exports to the world’s biggest economy.

China Vanke Co. and China Life Insurance Co. led gains for financial companies after the China Securities Journal reported investment funds bought more shares of developers, banks and insurers in the first quarter. Xinjiang Goldwind Science & Technology Co., the country’s second-biggest maker of wind turbines, advanced 1.6 percent after profit beat the company’s projection. Tangshan Jidong Cement Co. (000401) dropped 1.4 percent after posting a wider loss in the first quarter.

Bonds – Relatively stable session yesterday with a flat yield curve, auction holds today as market will wait for new cut-off rates before any pick up in trading activity.

Bills – Quiet session yesterday, delay in inflation figure release and auction today is largely linked to this run recorded so far this week.

Money Market – OBB and O/N maintained at 14.00% and 14.50% respectively, cash market already illiquid and in a debit of N 56 billion, there are still two auctions each to be funded in the securities market and FX market.

FX
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USD/NGN   157.30/40   157.03/13   157.28/38   157.18/28