25 November 2011, Sweetcrude, Lagos – Local and international financial market update.
· EUROPE – Spain and Italy seem to be following in the footsteps of Greece and Portugal prior to them seeking a bail out. Spanish and Italian bond yields are closed at the 7.00% level which is where Greece Portugal and Ireland sought bailouts.
· INDIA –Indian stocks declined with the benchmark index set for a fourth straight week of losses as overseas funds turned net sellers. The INR is also trading lower after reaching 52.73 against the USD this morning in Mumbai.
· CHINA – China’s sovereign wealth fund may give indirect support to Europe through investments without being the nation’s main route for any said Jesse Wang, the executive vice president of China Investment Corp. Europe is looking to China who is the world’s largest holder of FX reserves valued at USD3.2 trillion for support
· Ahead of the January 2012 pilot kick-off date for cash-less economy in Nigeria, the CBN is about to introduce a policy targeted at currency substitution. The CBN will put a limit to the amount of forex withdrawals which individuals and corporates can make, when the economy finally goes cash-less, in order to check currency substitution.
· “Bonds – The rally continued on Thursday in a sustained effort that was only checked by some mild profit taking. The demand spread across the whole curve in continued reaction to the MPC holding the benchmark stable at 12.00%. The whole curve shifted downward an average 30-40bps.
· Bills – With quite a few players and investors losing out on the auction due to the low cut off, a lot of that demand fed into the secondary market on Thursday. Rates dipped about 50bps across all the maturities as the market tries to take out the best yields before rates fall low after peaking over the last month.
· Money Market – OBB traded to close at 14.50 while unsecured rates closed at 16.50%”
FX
Hi Low Close Prev.Close
USD/NGN 159.50/60 159.25/35 159.30/40 159.42/52
NIBOR (%) LIBOR (%)
O/N 16.9583 USD 1 month 0.2572
7 Day 17.3333 USD 2 month 0.3779
30 Day 17.6667 USD 3 month 0.5117
60 Day 17.9167 USD 6 month 0.7261
90 Day 18.1667 USD 12 month 1.0466
Y/Y Consumer Inflation Oct 2011 : 10.50%
FX Reserves: 22 November 2011 (USD bn) 33.06
MPR 12.00%
Source: FMD and CBN
