Financial market update

o6 March 2012, Sweetcrude, Lagos - Local and international financial market update.
NIGERIA: Following the approval of the inclusion of the Chinese currency in the country’s external reserves mix last year, the Central Bank of Nigeria has converted $500m of the country’s external reserves into the Yuan in the last six months which is about 1.40% of Nigeria’s reserves. Sanusi noted that the CBN planned to buy seven times the amount in the Yuan, adding that the apex bank would gradually increase its Yuan holdings to 10.00% of its $35bn in reserves. [Punch]

EUROPE: European stocks dropped, snapping two days of gains, as China cut its forecast for economic growth this year and data showed manufacturing and services in the euro area shrank more than estimated. The Stoxx Europe 600 Index retreated 0.6 percent to 265.56 at the close yesterday.

CHINA: China reduced its growth target to 7.5 percent this year (the lowest goal since 2004) according to a transcript of Premier Wen Jiabao’s address to the National People’s Congress, causing Asian stocks to decline. The government will also aim for inflation of about 4 percent this year, unchanged from its goal in 2011. This will leave room for fiscal and monetary stimulus, and an easing of government controls on the cost of resources such as energy.

Bonds - Not much in it on Monday with only a handful of trades going through same as the close last week. Minimal movement across the curve with some demand feeding into the long end.

Bills - Relatively quiet market yesterday, some light demand pushing in on short dated bills towards the end of trading.

Money Market - OBB & unsecured rates have gone up another 100bps to 14.50% & 15.50% respectively, rates rising the back of the large sums of OMO bills which were used last week to mop up the FAAC liquidity.

CBN WDAS auction
NGN: CBN offered and sold $150mio, depreciated by 11 points to 157.5701 [inc. the 1% commission] against the previous auction. Weighted average at 157.7216 [inc. the 1% commission].

FX
Hi             Low               Close             Prev.Close
USD/NGN    158.48/58    157.60/70   157.80/90    157.95/05

 NIBOR(%)                              LIBOR (%)

 

O/N

 

15.0417

 

USD 1 month

 

0.2428

 

7 Day

 

15.5417

 

USD 2 month

 

0.3525

 

30 Day

 

15.9583

 

USD 3 month

 

0.4746

 

60 Day

 

16.2917

 

USD 6 month

 

0.7432

 

90 Day

 

16.6250

 

USD 12 month

 

1.0544

 

Y/Y Consumer Inflation January 2012 :

 

12.60%

 

FX Reserves: 01 March 2012 (USD bn)

 

34.705

 

MPR

 

12.00%

 

Source: FMD and CBN

 

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