14 June 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: CBN on Tuesday doused concerns over the weakening of the naira against the dollar. The apex bank said the development was a temporary phenomenon and that it was capable of meeting all genuine demands in the foreign exchange market and calming the present pressure on the local currency. Sentiment is that the pressure is mainly due to speculative demand from fears that Nigeria’s external reserves could drop, particularly with the dwindling oil prices which may reduce the apex bank’s capability to meet demand in the market.
EUROPE: European stocks dropped for a second day as Moody’s Investors Service downgraded Spain and Cyprus, while investors awaited Italy’s first bond sale since the euro area offered to bail out Spain’s banks. The Stoxx Europe 600 Index dropped 0.3 percent to 241.89 at 8:04 a.m. in London today.
INDIA: Indian stocks dropped for the first time in three days after data showed inflation quickened faster than estimated in May. The BSE India Sensitive Index, or Sensex, slid 0.4 percent to 16,817.65 at 12:31 p.m. in Mumbai after changing direction at least 10 times before the inflation data. The gauge rallied 4.7 percent last week, its best weekly advance this year, amid optimism the Reserve Bank of India would reduce borrowing costs for a second time this year at its policy review on June 18.
Bonds – Markets still quiet in general on Wednesday, yields up across the curve in small moves about 7bps scattered across the short end of the curve. Continued fear of inflation holding the market and investors back.
Bills – Volatile markets yesterday with rates dipping initially but profit takers pushing the rates back up towards the close.
Money Market – OBB and unsecured O/N rates up to 14.50% & 15.50%. Liquidity levels still relatively low.
CBN WDAS AUCTION
Offered: 400mio Sold: 400mio
Marginal rate: 155.90
Weighted average: 155.98
No. of Banks: 18
Hi Low Close Prev.Close
USD/NGN 163.26/36 162.45/55 162.80/90 162.30/40
|NIBOR (%)||LIBOR (%)|
|O/N||15.2500||USD 1 month||0.2418|
|7 Day||15.6667||USD 2 month||0.3478|
|30 Day||15.9583||USD 3 month||0.4679|
|60 Day||16.2500||USD 4 month||0.5681|
|90 Day||16.5417||USD 6 month||0.7379|
|USD 12 month||1.0707|
|Y/Y Consumer Inflation April 2012 :||12.9%|
|FX Reserves: 12 June 2012 (USD bn)||37.625|
|Source: FMD and CBN|