Please find below our Weekly Update for the week ended 4th May, 2012.
Key Highlights: -
Macroeconomic /Socio-Political Update
· Current data from the Central Bank of Nigeria indicates that foreign reserves have reached its highest point in just over a year, inching up by 2.96% on the month, to US$36.52bn.
· The Minister of Finance, Dr. Ngozi Okonjo-Iweala has set a new price tariff on all types of imported rice in the second quarter of 2012.
Equity Market Review & Outlook
· Equities recorded mostly negative performances globally. European stocks posted their biggest weekly drop since March, as Spain entered a recession while investors awaited election results in France and Greece last weekend.
· On a contrarian mode, the Nigerian equity market was upbeat last week with the market gaining 252bps, as it continued in an upward trend for the third week running.
Money Market Review & Outlook
· Interbank rates inched up last week, as the excess liquidity within the money market gradually eased out via debits from WDAS and OMO auctions.
· We expect a further hike in market rates this week, on the back of scheduled debits for WDAS and T-bill auctions.
Foreign Exchange Market Review & Outlook
· The CBN offered and sold US$270.0m at the WDAS last week. The marginal bid rate at Monday’s auction was N155.70/US$1.00 with the Naira losing 5k to the Dollar from its previous close price.
· We do not anticipate significant changes in Naira trading patterns this week.
Bond Market Review & Outlook
· Sentiments were bullish in the bond market last week, with yields dipping on all traded instruments. The Nigerian Eurobond gained 96cents in its price from US$109.38 in the previous week to US$110.34, as its yield subsequently dipped by 13bps from 5.39% to 5.29%.
· We expect a further decline in yields albeit marginal this week, as scheduled inflows form maturing OMO and T-bills should buffer average market liquidity levels.
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