Dear Afrinvestor,

Please find below our Weekly Update for the week ended 12^th October, 2012.

Key Highlights: -

Macroeconomic /Socio-Political Update

·         A N4.93 trillion  (US$31.35bn) budget was presented last week by  President Goodluck Jonathan to the National Assembly for the year 2013.

·         A force majeure was declared by the Shell Petroleum Development Company (SPDC) on its gas supply after attacks on a pipeline by suspected crude oil thieves that caused a fire.

Equity Market Review & Outlook

·         Equities recorded mixed performances globally. All European stocks fell last week, with the biggest loss of 2.2% recorded by Germany’s Xertra Dax.

·         We expect positive sentiments will persist in  the Nigerian equity market this week, with possible profit taking activities by friday.

Money Market Review & Outlook

·         Liquidity levels dipped at the money market last week, as a combination of NNPC debits with WDAS and T-bill auctions withdrew funds from the system.

·         W We expect money market rates to inch up moderately this week.

Foreign Exchange Market Review & Outlook

·         The CBN offered US$270.0m but sold US$224.9m at the WDAS last week – US$104.9m and US$120.0m at Monday and Wednesday’s auctions respectively.

·         We expect to see minor depreciation in the domestic currency this week.

Bond Market Review & Outlook

·         The Nigerian bond market was skewed to the bears last week, as prices fell on all traded instruments (ex two 10yr bonds; 9.35% FGN AUG 2017 and 7.00%FGN OCT 2019).

·         We expect the bond market to remain in bearish territory this week.