Financial market update

15 May 2012, Sweetcrude, Lagos - Local and international financial market update.
NIGERIA: Nigeria’s foreign reserves have maintained steady growth, recording at least over $1.2 billion rise between the end of March 2012 and May 10. According to figures by the Central Bank of Nigeria (CBN) on the movement of the reserves at the weekend, the account has grown from $35.600 billion by the end of March 2012 to $36.850 billion as at May 10 this month. This development is attributed to a reduction in reckless spending by the Federal Government.

EUROPE: European stocks retreated, snapping two days of gains, as Greece moved closer to a possible exit from the euro currency union and German Chancellor Angela Merkel’s party lost a state election. The Stoxx Europe 600 Index lost 1.8 percent to 247.43 at the close of trading yesterday. All 19 industry groups on the gauge fell. The Stoxx 600 has pared this year’s gains to 1.2 percent as an inconclusive election in Greece left political parties struggling to form a government, risking the collapse of proposed austerity measures.

INDIA: Indian inflation unexpectedly accelerated in April, crimping the central bank’s scope to bolster economic growth by extending interest-rate cuts. Stocks fell, reversing earlier gains. The benchmark wholesale-price index rose 7.23% from a year earlier, after climbing 6.89% in March, the Ministry of Commerce and Industry said in a statement in New Delhi yesterday.

Bonds - Trading was still very cautious yesterday, some hint of demand feeding in on the short end possibly due to suspected lower cut offs and yields at the T-bill auction.

Bills - An Initial sell off earlier in the day on Monday pushed yields up across the maturities, some retracement seen around midday, though rates still closed higher than opening levels around 20-30bps on average.

Money Market - OBB and unsecured O/N rates both averaging 14.00% with liquidity averaging N7billion to open the day.

CBN WDAS AUCTION

Offered: 150mio Sold: 150mio
Marginal rate: 155.70
Weighted average: 155.71
No. of Banks: 18

FX
                          Hi              Low           Close        Prev.Close
USD/NGN  157.87/97   157.50/60   157.85/95   157.58/98

NIBOR (%) LIBOR (%) 
O/N  14.2917  USD 1 month  0.2388 
7 Day  14.7083  USD 2 month  0.3448 
30 Day  15.0417  USD 3 month  0.4659 
60 Day  15.4333  USD 4 month  0.5661 
90 Day  15.7583  USD 6 month  0.7309 
USD 12 month  1.0590 
Y/Y Consumer Inflation March 2012 :  12.1% 
FX Reserves: 11 May 2012 (USD bn)  36.892 
MPR  12 
Source: FMD and CBN