06 June 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Federal Government has unveiled plans for a $100 million Diaspora bond as part of a fresh $500m bond that would be issued sometime next year. The government had early last year issued a $500 million Eurobond to investors, which was over-subscribed. Also, the government assured stakeholders that it was still working on the modalities for the forbearance for stockbrokers, in respect of margin loans, as part of efforts to enable the stock market fully recover, following its near collapse in 2008.
INDIA: Indian stocks advanced for a second day as some investors judged recent losses were overdone and amid speculation the central bank may cut interest rates to boost growth that slowed to a near-decade low last quarter. The Sensex rose for the first time in four days on Monday after the RBI signaled it has more room to lower funding costs amid the economic slowdown and a drop in oil costs.
CHINA: Guangdong’s job market is showing signs of withstanding China’s slowdown as factory owners report that shortages of workers persist in the southern export hub. Strength in the job market may encourage the ruling Communist Party to limit the scale of the stimulus that’s being rolled out to support growth in the world’s second-biggest economy. China’s currency has weakened 1 percent against the dollar this year, aiding exporters as Europe’s debt crisis constrains demand. The yuan closed on Monday at 6.3675 per dollar.
Bonds – Still an active market today following on from yesterday’s activities, an initial sell off early on but some demand came in to pull yields down below the open on the long end, while the short end inched up to close the day. Expectation is that markets will be volatile and should we see heavy demand leading to lower cut offs in the bill auction we might see yields come off.
Bills – Some buying at the short end today after rates have been sold off to reach high levels in previous days. The long end remained largely stable with the exception of the illiquid issues which were bought in an attempt to squeeze the issues. Bill auction tomorrow eagerly awaited as it will dictate thing for the next week or two.
Money Market – OBB and unsecured O/N rates holding at 14.00% & 14.50% liquidity levels still relatively low.
Hi Low Close Prev.Close
USD/NGN 162.72/82 161.40/50 161.20/30 161.40/50
|NIBOR (%)||LIBOR (%)|
|O/N||14.5000||USD 1 month||0.2398|
|7 Day||14.8333||USD 2 month||0.3468|
|30 Day||15.1667||USD 3 month||0.4679|
|60 Day||15.5917||USD 4 month||0.5681|
|90 Day||16.0000||USD 6 month||0.7379|
|USD 12 month||1.0707|
|Y/Y Consumer Inflation April 2012 :||12.9%|
|FX Reserves: 30 May 2012 (USD bn)||37.682|
|Source: FMD and CBN|