Financial Market Update

Financial Market Update

Lagos - Local and international financial market update.

Nigeria - Standard & Poor’s (S&P) has raised the long-term counterparty credit ratings on First Bank of Nigeria Plc , Zenith Bank Plc, and Guaranty Trust Bank Plc to ‘BB-’ from ‘B+’. The firm said also raised the long-term Nigeria national scale ratings on the three lenders to ‘ngAA-’ from ‘ngA+’, adding that the stable outlook on the trio reflects that on the sovereign. The firm said the banks’ business and financial profiles will remain relatively unchanged over the next 12 months.

China - EM stocks fell for a fourth day led by developers and technology exporters after news agencies reported China may expand a property tax trial and European officials delayed a decision on Greek aid. EU ministers will meet again Nov 20 to discuss Greece said Luxembourg’s Prime Minister Jean-Claude Junker who heads the group of euro area finance ministers. They need to decide on to cover Greece’s need for additional financing of as much as EUR32.6 billion.

India - Indian retailers are hoping to boos disappointing consumer spending this week’s Diwali festival but it is expected that people will be shopping frugally while consumer spending is at seven year lows. The Hindu Festival of Lights has always been an auspicious time to splurge. Auto makers have taken the lead this year crowding the market with 20 new cars.

Bonds - The profit takers continued pushing yields up Yesterday across board as the market sold off for a second consecutive day. We will possibly see market swing a lot this week as higher yields will surely renew interest from the offshore players who are now investing significantly in Nigerian fixed income securities.

Bills - Most of the activity continues to be concentrated on the short dated bills which is also where the Central bank concentrated most of its OMO issuance. Some light selling on the longer end though rates remain largely stable.

Money Market - OBB and unsecured O/N rates closed the day at 11.50% & 12.00% to close today.

CBN WDAS - CBN offered and sold $150mio with the marginal rate now at 157.3075 [inc. the 1% commission], just 1 point higher than the previous auction.

Indicative Currency Exchange Rates
                                    Bid             Offer
EURUSD                  1.2686           1.2696
GBPUSD                  1.5871             1.5881
USDJPY                    79.28              79.68
USDCHF                   0.9496          0.9516
GBPEUR                   1.2510            1.2520
USDZAR                   8.7651            8.8651
USDNGN                  157.40            157.90
JPYNGN                   1.9854             2.0354
CHFNGN                  165.75            169.75
EURNGN                  199.68           203.68
GBPNGN                   249.81           253.81
ZARNGN                   17.96              19.96

Commodities
Brent crude halted a two-day advance in London before European finance ministers meet to discuss aid for Greece amid concern that the region’s debt turmoil will constrain fuel consumption. Futures dropped as much as 0.8% as ministers
prepared to assess whether the latest round of cuts agreed by Greece are sufficient to warrant further assistance.

Interest rates
NIBOR (%)                        LIBOR (%) 
O/N               12.0000          USD 1 month           0.2085
7 Day             12.9167            USD 2 month          0.2585
30 Day          14.0417            USD 3 month          0.3100
60 Day          14.6333           USD 6 month          0.5265
90 Day           14.9167           USD 12 month        0.8620
Y/Y Consumer Inflation September 2012 :           11.3%
FX Reserves: 11 November 2012 (USD bn)           42.72
MPR                                                                               12.00%
Source: Reuters Guardian, Bloomberg, Central Bank of Nigeria,
Financial Market Dealers Association Standard Chartered Bank Nigeria

Fx
Hi                Low           Close       Prev.Close
USD/NGN    157.75/85   157.45/55    157.75/85    157.35/45

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