Financial market update

04 July 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Federal government on Monday signed a memorandum of understanding with a firm, Petroleum Refineries and Strategic Research Ltd [PRSR], to construct six modular refineries in the coastal areas of Nigeria at the cost of USD4.5 billion. Olusegun Aganga, Minister of trade and investment, who signed the agreement on behalf of the federal government said the refineries would be commissioned within the next 12 months. [BusinessDay]

EUROPE: The Stoxx 600 slipped 0.1 percent to 257.07 at 8:07 a.m. in London, after rallying 5.2 percent over the previous three days. The index is on course for a fifth straight week of gains, the longest stretch since January, as European leaders agreed to address flaws in their bailout programs to ease the sovereign- debt crisis.

CHINA: China’s slowdown dragged Hong Kong’s retail-sales growth to the weakest pace since 2009 as shoppers visiting from the mainland cut back on purchases of luxury goods such as jewellery and watches. Sales increased 8.8% in May from a year earlier to $4.6 billion, the government said yesterday. That was the smallest gain since September 2009, excluding seasonal distortions each January and February. The deceleration of Asia’s biggest economy is rippling through Hong Kong, which had record retail-sales gains as recently as last year.

INDIA: India’s rupee fell, snapping a four- day advance, as some investors judged recent gains excessive. “The rupee’s decline is mainly due to profit booking as all other indicators stay the same,” said Naveen Raghuvanshi, a trader at Development Credit Bank Ltd. in Mumbai. “Any monetary easing in developed economies will lead to flows into India and support the rupee.” The rupee weakened 0.4 percent to 54.5750 per dollar as of 9:36 a.m. in Mumbai, according to data compiled by Bloomberg.

Bonds – Light Demand recorded across the curve on Tuesday after touching new record levels into the new week, bond trading is expected to remain volatile as there isn’t sufficient liquidity in the cash market to sustain this trend.

Bills – Yields off 10 – 25bps on bills as trading volumes pick up in yesterday’s session, demand recorded is from onshore interest on the various tenors offered given the slowdown of OMO bills issuance which had initially reduced buying interests in the secondary market, trend no sustainable as cash market remain illiquid.

Money Market – OBB and unsecured O/N rates trading flat at 15.00% and 15.50% respectively, market liquidity remains relatively square as the CBN continues to effectively manage liquidity.

FX
                             Hi              Low            Close        Prev.Close
USD/NGN      163.18/28   163.00/10   163.18/28    163.05/15