Financial market update

09 May 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: First Bank of Nigeria Plc has announced plans to form a holding company, which would be listed on the Nigerian Stock Exchange before the end of this year. This, according to the bank, is in line with the Central Bank of Nigeria’s policy on universal banking. The Managing Director of the bank, Mr. Bisi Onasanya, said that a holding company, FBN Holdings, would be formed and all the existing subsidiaries, including First Bank, will become a subsidiary of that company. [PUNCH]

EUROPE: European stocks dropped after the leader of Greece’s biggest political party failed to reach an agreement on a new government following the weekend’s elections. The Stoxx Europe 600 Index slid 1.7 percent to 250.58 at the close in London yesterday as the cost of insuring against default on European sovereign and corporate debt advanced.

INDIA: The Indian parliament approved Finance Minister Pranab Mukherjee’s plan for higher taxes to help pare the widest fiscal deficit among the largest emerging markets. Lawmakers ratified the budget, unveiled on March 16, in New Delhi on Tuesday. Mukherjee has also proposed subsidy curbs to narrow the fiscal gap to 5.1 percent of gross domestic product in the year through March 2013 from 5.9 percent in 2011-2012. The budget increased both the service tax rate and the excise duty to 12 percent from 10 percent.

CHINA: China’s economy expanded 8.1 percent in the first quarter of 2012 from a year earlier in the fifth quarterly deceleration as Premier Wen Jiabao extended a clampdown on the property market and the sluggish global recovery limited the nation’s exports. Consumption including government spending on public services accounted for about 77 percent, or 6.2 percentage points, of GDP growth in the first quarter, while investment contributed 2.7 points and net exports subtracted 0.8 point, according to China’s statistics bureau.

Bonds – Still very cautious trading with bearish sentiments and only some slight movements along the curve on Tuesday.

Bills – Volatile markets short term as anticipation of auction results played out yesterday. The auction takes place today and this is expected to give rate direction over the next week. Rates were being bought down quite aggressively until a shock came through a relatively high OMO result on Friday caused a sell off and some profit taking.

Money Market – OBB and unsecured O/N rates held stable yesterday to close at 14.00% and 14.25% respectively.

FX
                           Hi            Low          Close      Prev.Close
USD/NGN   157.45/55  157.25/35  157.45/55  157.25/35