16 July 2018, Sweetcrude, Abuja — The local and international financial markets, products and services update.
NIGERIA: China National Offshore Oil Corp (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
During a visit to Nigeria’s state-owned NNPC, CNOOC Chief Executive Yuan Guangyu said the Beijing-based oil company had invested more than $14 billion in its Nigerian operations and expressed readiness to invest more.
Guangyu said Nigeria was their largest investment destination and also asked the NNPC to seek common grounds with CNOOC for enhanced productivity.
FX: Nafex, the fixing in the I&E window, closed the week at an 11-month high as a result of a liquidity squeeze. The market was bid through-out the week with levels traded to a high of $/N 363.50 and a daily average turnover of $171m. The current trend is a result of a weak FPI’s appetite for local securities. With the local securities as they are, we should see the pair depreciating further this month. The window recorded $2.47bn inflows in May against $3.47bn in June.
FIXED INCOME: Quiet session on Friday to end the bond market last week with the few inquiries seen still from locals. With cN300b still left in the money market, bill market ended the week on a bullish note as no major naira outflows seen.
Bill yields contracted by (-22) bps on average across the curve led by the short dates (July and August bills).
We expect more of the same this week in both bills and bonds.
T-Bill auction on Wednesday with N178.4bn on offer across the three tenors (91, 182 and 364day)
U.S: In a bid to beat the trade war, a $139 billion Australian investment manager is using 30-year Treasuries as its weapon of choice.
The ultra-long bonds are seen as a hedge to protect the portfolios of AMP Capital Investors Ltd. against the risks stemming from the U.S.-China trade frictions and less-synchronized global growth, according to Ilan Dekell, the head of the macro for global fixed income at the asset manager.
U.K: Bank of England policymakers are getting a crucial glimpse of the health of the U.K. economy before their crunch August meeting.
A deluge of numbers on wages, inflation, retail sales and public borrowing are coming over the next five days. While a similar run of reports prompted the bank to back away from an interest-rate increase in May, this time appears different, with recent indicators looking more positive
A Bloomberg survey Monday showed 71% of economists expect a rate hike on Aug. 2, up from 55% last month, while investors are currently pricing in about an 80% chance of such a move.
COMMODITIES: Oil retreated below $71 a barrel as Saudi Arabia was said to offer extra crude supplies to some customers following a plan to boost output, while the U.S. considers tapping into its emergency stockpiles to rein in prices.
Futures in New York slid as much as 1%, after falling 3.8% last week. Saudi Arabia offered additional cargoes of its Arab Extra Light crude to at least two buyers in Asia for August, people with knowledge of the matter said, after supplying full contractual volumes to customers in the region.
Macro Economic Indicators
Inflation rate (Y-o-Y) for May 2018, 11.61%
Monetary Policy Rate current 14.00%
FX Reserves (Moving Avg Bn $) as at July 12, 2018, 47,663
Money Market Highlights
30 Day 12.8406
90 Day 13.3944
180 Day 14.5525
USD 1 Month 2.07325
USD 2 Months 2.17338
USD 3 Months 2.33600
USD 6 Months 2.52088
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 11-Oct-18 11.70
182d 10-Jan-18 12.58
364d 04-Apr-19 13.49
2y 13-Feb-20 13.52
3y 15-Jul-21 13.59
5y 27-Jan-22 13.69
Indicative Currency Exchange Rates
USDNGN (I&E) 360.00 362.00
EURUSD 1.1602 1.1804
GBPUSD 1.3164 1.3350
USDJPY 112.42 112.79
GBPEUR 1.1211 1.1437
USDZAR 13.0960 13.4000
EURNGN 420.55 426.30
GBPNGN 473.98 487.50