Dear Afrinvestor,

Please find below our Weekly Update for the week ended 17^th August, 2012.

Key Highlights: -

Macroeconomic /Socio-Political Update

·         Nigeria is to be included in JP Morgan's Government Bond Index - Emerging Markets (GBI-EM). Nigeria is the second African country to be included in the index after South Africa.

Equity Market Review & Outlook

·         Global stock markets closed upbeat last week, following positive building data from the US and assurances given by the EU to support the European Central Bank (ECB) with measures to save the Euro zone.

·         In Nigeria, the NSE All-Share Index lost 0.41% week-on-week to close at 23,141.08.

Money Market Review & Outlook

·         The money market was awash with liquidity, after staying in an illiquid state for the first four trading days of the week.

·         We expect money market rates to inch up this week, as the CBN plans to issue N71.0bn in T-bills.

Foreign Exchange Market Review & Outlook

·         The CBN offered a total of US$380.0m at the WDAS last week. The Naira remained unchanged at N155.83/US$1.00 at Monday’s auction; it however appreciated by 3k at Wednesday’s auction closing at N155.80/US$1.00.

·         We expect that the Naira will hold steady at the interbank segment.

Bond Market Review & Outlook

·         A bull-run occurred at the bond market last week, following the largely unexpected decline in Nigeria’s July inflation figures and a report that JP Morgan intends to include select FGN bonds in its Emerging Market- Africa (EMA) bond index. Subsequently, all traded instruments increased in price, as their respective yields dropped.

·         We expect to see mixed sentiments in the FGN bond market this week.