13 July 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The bilateral trade between Nigeria and Canada has increased from the $1 billion (N160 billion) it recorded in 2010 to $3 billion (N480 billion) in 2012. Canadian High Commissioner to Nigeria, Chris Cooter, who made this known at the new Canadian Chancery in Abuja, recently, stated that Canada was interested in having stronger economic ties with Nigeria to match Canada’s growing investments in Africa’s largest market. Cooter said the bilateral economic relations between the West African and North American countries were set for a leap.
EUROPE: Spanish Prime Minister Mariano Rajoy rolled back social-welfare protections and raised taxes to clinch emergency aid and pacify investors as anti-austerity protesters marched in the capital. Rajoy announced cuts in unemployment benefits and public wages, signalled reductions in pensions and raised sales taxes as part of a 65 billion-euro ($80 billion) package of deficit cuts, risking a deeper recession. As striking miners clamoured for aid to keep their industry alive in a march along Madrid’s main boulevard, Rajoy trimmed union funding by 20 percent.
US: The trade deficit in the U.S. narrowed in May as falling crude oil prices and weakening demand for consumer goods trimmed the import bill. The gap shrank 3.8 percent to $48.7 billion, in line with the median estimate of economists surveyed by Bloomberg News, from $50.6 billion in April, Commerce Department figures showed yesterday in Washington.
INDIA: India may today decide on selling a 10.82% stake in Steel Authority of India Ltd., the nation’s second-biggest producer, two people with direct knowledge of the matter said. India plans to raise 300 billion rupees ($5.4 billion) in the year to March 31 by selling stakes in 15 companies, including the sale of about 10 percent in Steel Authority, Thomas Mathew, joint secretary for capital markets in the finance ministry, said on June 18.
Bonds – Market maintained stability yesterday with a slim upward shift on the yield curve, trade volume remains low.
Bills – Sustained sell-off in Wednesday’s session ahead of the auction result announcement. Yields moved up another 15 – 30bps across board, though auction results are yet to be announced. However, there are rumors of lower cut-off rates already in the market which will cause another round of buying in the market today.
Money Market – OBB rate back up 125bps to 15.25% and O/N rate flat at 15.75% respectively, the sharp move on OBB is due to funding for the WDAS auction on FX yesterday.
CBN WDAS AUCTION
Offered: 180mio Sold: 180mio
Marginal rate: 155.87
Weighted average: 155.91
No. of Banks:
Hi Low Close Prev. Close
USD/NGN 161.20/30 160.75/85 161.20/30 160.95/05
NIBOR (%) LIBOR (%)
O/N 16.1667 USD 1 month 0.2488
7 Day 16.5000 USD 2 month 0.3428
30 Day 16.8333 USD 3 month 0.4561
60 Day 17.0833 USD 4 month 0.5561
90 Day 17.2083 USD 6 month 0.7344
USD 12 month 1.0695
Y/Y Consumer Inflation May 2012 : 12.7%
FX Reserves: 10 July 2012 (USD bn) 36.497
Source: FMD and CBN