Financial market update

16 November 2011, Sweetcrude, Lagos – Local and international financial market update:
· EUROPE – The euro sank to a five week low against the USD and JPY as Spain and France prepare to sell securities tomorrow after a slump in euro area debt signalled the debt crisis is spreading. EURUSD extended declines on speculation so-called stop loss orders around the 1.3500 level were activated according analysts.

· INDIA – Indian Rupee weakened approaching 51 per USD for the first time in more than 2 ½ years as investors sought the relative safety of the USD on concern Europe’s debt crisis will worsen. At the same time the BSE India Sensitive Index of shares extended yesterdays biggest loss in a month.

· CHINA – FDI’s in China grew at a faster pace in October, signalling corporate spending is holding up amid global financial turmoil. Investment rose 8.8% from an year earlier to USD8.33billion. The gain was 7.9% in September

· Nigeria’s total public debt (domestic and external) stands at N6.1 trillion, the DG of the Debt Management Office (DMO) Dr. Abraham Nwankwo, has said. He said debt stock represents about 19.60% of the nation’s GDP and that it is sustainable. Speaking at the start of training for its first set of medium-term debt strategy experts in Abuja, Nwankwo said even though the total debt stock has been growing over the past five years, the debt to GDP ratio has remained almost stable below 20% [Nation]

· Bonds – Yields went up on the shorter end of the curve yesterday while yields dipped on the long end. Auction comes up today and we might see some sell off in anticipation of higher yields.

· Bills – Market continues to sell off lightly as the CBN continues to offer and issue OMO bills. Market players continue their attempt at switching for higher yields.

· Money Market – OBB stable at 12.00% with unsecured rates up 50bps to 14.00%. The CBN came yet again yesterday to offer OMO bills as they continue to try and mop up the liquidity in the system gradually. ”

NIBOR%                                  LIBOR (%)
O/N             14.45800               USD 1 month          0.25170
7 Day           14.87500               USD 2 month          0.35370
30 Day        15.58300               USD 3 month          3.46560
60 Day        15.95800               USD 6 month          0.66970
90 Day        16.29200               USD 12 month        0.99190
Y/Y Consumer Inflation Oct 2011 :                                10.50%
FX Reserves: 10 November 2011               (USD bn) 33.05
MPR                                                                                     12.00%
Source: FMD and CBN