Dear Afrinvestor,

Please find below our Weekly Update for the week ended 3^rd August, 2012.

Key Highlights: -

Macroeconomic /Socio-Political Update

·         The Federal Government has revealed that it will name the management team of Nigeria’s Sovereign Wealth Fund (SWF) in August and will likely launch the fund before the end of the year with an initial sum of US$1.0bn.

·         The Nigerian Stock Exchange in collaboration with Lotus Capital has launched an Islamic index known as the NSE Lotus Islamic Index (NSE LII).

Equity Market Review & Outlook

·         Top global stocks closed on a positive note last week, spurred by the assurance given by the European Central Bank (ECB) to save the Euro zone and a higher than expected job roll out in the US in July.

·         The NSE All-Share Index gained 99bps week-on-week with the YTD at 13.5%.

Money Market Review & Outlook

·         Money market rates soared across board last week, triggered by a CBN directive restraining Banks and Discount Houses from using funds obtained via the Standing Lending Facility (SLF) to place concurrently in the inter-bank market.

·         We expect money market rates to hover around current levels this week.

Foreign Exchange Market Review & Outlook

·         The CBN offered a total of US$450.0m at the WDAS last week. The Naira recorded no change at Monday’s auction, indicating a marginal rate of N155.84/US$1.00; it however lost 2k at Wednesday’s auction closing at N155.86/US$1.00.

·         We expect to see a minor appreciation in the Naira this week.

Bond Market Review & Outlook

·         The bond market was predominantly bearish last week, as all traded instruments excluding the 5yr (15.10% FGN APR 2017), 7yr (16.00% FGN JUN 2019) and 10 yr (16.39% FGN JAN 2022) dipped in price while their yields moved north.

·         We expect bullish sentiments in the market this week.