Financial market update

23 May 2012, Sweetcrude, Lagos - Local and international financial market update.
NIGERIA:  Nigeria’s central bank kept its benchmark interest rate unchanged at a record to bolster the currency and curb an inflation rate at an 18-month high. The Monetary Policy Committee unanimously left the policy rate at 12 percent for a fourth consecutive meeting, Governor Lamido Sanusi told reporters in the capital, Abuja, yesterday. That was in line with the forecasts of all 14 economists surveyed by Bloomberg. Inflation in Africa’s biggest oil producer accelerated to 12.9 percent in April after the government partly removed fuel subsidies five months ago, boosting gasoline costs.

EUROPE: European stocks climbed the most in a month amid speculation that China and the euro area will do more to stimulate global economic growth. The Stoxx Europe 600 Index gained 1.9 percent to 244.7 at the close yesterday, its biggest rally since April 17. The gauge has still fallen 10 percent from this year’s high on March 16 amid mounting concern that Greece will elect a government opposed to implementing pledged austerity measures.

INDIA: Indian stocks dropped the most among major benchmark indexes in Asia as the rupee fell to a record, renewing concern the government may find it difficult to rein in inflation and bridge a shortfall in its finances. The BSE India Sensitive Index, or Sensex, lost 1 percent to 16,026.41 at close on Tuesday, its lowest level since Jan. 9. The gauge has retreated 13 percent from its Feb. 21 high, exceeding the 10 percent drop that signals a correction to some investors.

UK: Britain requires further monetary easing to aid the economy and Chancellor of the Exchequer George Osborne should prepare for temporary tax cuts, the International Monetary Fund said. With the economy mired in its first double-dip recession since the 1970s, the Bank of England and the Treasury should introduce policies to underpin demand and unclog the financial system, the Washington-based lender said in its annual review of the U.K. published yesterday.

Bonds - Still very light trading in the market, yields inched lower on Tuesday. We might see some activity in the coming days on the back of the maturity of N245billion of the 6th FGN Series 2 bond yesterday and another maturity of about N50billion in the 4th FGN Series 5 bond on Friday.

Bills - The sell off continued yesterday across all the maturities, offshore selling and expected higher yields at the auction pushing rates up. The outcome of the auction today will be very key in the direction of markets short term.

 

Money Market - OBB and unsecured O/N rates crashed to 12.50% on the back of the inflow from the bond maturity of N245billion on Tuesday.

FX
                         Hi              Low          Close       Prev.Close
USD/NGN 159.27/37  158.77/87  159.25/35   158.80/90

NIBOR (%) LIBOR (%)

 

O/N

 

12.8750

 

USD 1 month

 

0.2388

 

7 Day

 

13.2917

 

USD 2 month

 

0.3458

 

30 Day

 

14.3333

 

USD 3 month

 

0.4669

 

60 Day

 

14.6667

 

USD 4 month

 

0.5671

 

90 Day

 

15.1667

 

USD 6 month

 

0.7364

 

USD 12 month

 

1.0692

 

Y/Y Consumer Inflation April 2012 :

 

12.9%

 

FX Reserves: 16 May 2012 (USD bn)

 

37.439

 

MPR

 

12

 

Source: FMD and CBN