Financial market update

Nigeria was the third most rewarding stock market globally in 2012 behind Egypt and Kenya, as investors harvested 35.45 percent yield- to- date return on investment from the Nigerian Stock Exchange (NSE).

Bonds - Another bullish session yesterday as it became apparent that market participants were waiting to cross year end before going in heavy on bonds. It is clear that market participants see yields significantly lower to kick start the year and market activity is mirroring this sentiment.

Bills - With the liquidity in the markets and bond yields dipping aggressively it was also a bullish session in the bill market, even as the CBN came out to offer N200billion and selling N278.49billion in 119 & 126day bills at 13.299% and 13.339% respectively.

Money Market - OBB and unsecured O/N rates remained stable at 10.25% and 10.50% as the market remains liquid. The Central Bank offered OMO bills to mop up this liquidity and we can expect rates to begin to rise to close the week.

Nigerian Foreign Exchange:

EUR – The euro fell to a three week low against the dollar after minutes from the federal Reserve’s latest meeting indicated that while the U.S central bank looks set to continue buying bonds, some policy makers believe it will be appropriate to “slow or stop assets buy well before the end of 2013.

ZAR: South Africa’s rand slipped after hitting a three month high earlier in the week as the euro came under pressure following the release of U.S Federal Reserve’s that revealed increasing wariness about buying bonds.

YEN: The dollar the dollar rose to its highest level against the yen in nearly 2.5 years.

Indicative Currency Exchange Rates
Bid Offer
EURUSD 1.3000 1.3050
GBPUSD 1.6020 1.6070
USDJPY 87.50 88.00
USDCHF 0.9250 0.9300
GBPEUR 1.2330 1.2380
USDZAR 8.6350 8.6400
USDNGN 156.00 156.50
JPYNGN 1.7727 1.7885
CHFNGN 169.18 169.57
EURNGN 202.80 204.23
GBPNGN 249.91 251.49
ZARNGN 18.05 18.12

Commodities
Brent crude fell below $ 112 a barrel as growing doubts within the U.S federal Reserve about the side effects of its stimulus programme and the prospect of more budget battles in Washington curbed investor appetite for riskier assets.

Interest rates
NIBOR (%) LIBOR (%)
O/N 10.5000 USD 1 month 0.20770
7 Day 11.0833 USD 2 month 0.25200
30 Day 12.2083 USD 3 month 0.30500
60 Day 12.5000 USD 4 month 0.36110
90 Day 12.8750 USD 6 month 0.50325
USD 12 month 0.83950
Y/Y Consumer Inflation August 2012 : 12.3%
FX Reserves: 24 December 2012 (USD bn) 44.256 MPR 12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

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