Friday, August 04, 2017 10:45AM /FDC
The Forex Market
At the parallel market, the naira:
· Appreciated by 1.10% during the review period to close at N 363/$ on Augst 2nd, from N 367/$ on July 18th.
· Depreciated by 0.42% against the pound to close at N475/£ on August 2nd, from 473/£ on July 18th.
At the interbank market, the naira gained 3.07%, closing at N306.10/$ on August 2nd, from N315.50/$ on July 18th.
The IEFX rate depreciated by 1.33% to N368.50 /$ within the review period.
· Turnover for the period totaled $2.19bn.
External reserves gained 0.9% ($280m) during the period, to close at $30.77bn on July 28th.
· The import cover rose to 6.89 months from 6.8 months on July 18th.
· We expect the reserves level to continue to record marginal gains as oil price stays above $50pb.
The Money Market
Short-term interbank interest rates (OBB/ON) rose sharply by 1467bps and 1450bps respectively.
· OBB: 20.17%
· O/N: 19.67%
· An outflow of N200-300bn in stabilization securities mopped up market liquidity.
Yields on T-bills investments in the primary market have decreased during the period.
91-day: 13.89%; 182-day: 19.05%
· Rates have decreased by 0.10% (avg) so far in July.
The Stock Market
The Nigerian Stock Exchange All Share Index (NSE ASI) market gained 10.37% to 36,905.06 pts on August 2nd compared to 33,436.61 pts on July 18th.
The stock exchange maintained a bullish streak for 16 days straight, to reach a 3- year high of 37,245.17 on July 27th.
· Before falling to 35,844on July 31st.
Total market capitalization closed at N12.72trn on August 2nd, 10.41% higher than N11.52trn on July 18th.
The Commodities Market
Brent crude price gained 5.4% to $51.43pb on August 2nd, from $48.84pb on July 18th.
· The rise in price was driven by expectations of a cut in oil exports from the OPEC defacto leader, Saudi Arabia.
· Global prices are also responding to the tightening in the US oil market as inventories fall and rig additions slow.
· OPEC will meet with its members in August 7-8, to discuss compliance levels.
Natural gas lost 8.44% to close at $2.82/mmbtu from $3.08/mmbtu on July 18th.
· LNG global exports rose to record high in the week during the period.
Wheat prices lost 8.54% to $4.60/bushel from $5.03/bushel.
· Ample supply in other producing regions has offset the effect of the US drought.
Corn price also closed higher by 0.7% to $3.80/bushel from $3.77/bushel
· Forecasts show that EU corn harvest is expected to fall in 2017-18.
Sugar prices up 6.02% to $0.1495/pound from $0.1410/pound in the review period.
· Due to robust demand from ice-cream and soft drink makers as summer season peaks.
Cocoa prices closed higher by 8% to $2,064/mt from $1,911/mt in the review period.
· The gain was driven by increased demand as the commodity broke past the $2000/mt threshold.
1. Brent Crude Now Trading Above July 2017 Average
2. Market Extends Two-Day Gaining Streak; Records +0.62% Gain
3. FGN Savings Bond August Offer Opens on Monday August 7th 2017
4. Ahead of Next T-Bills Auction Scheduled for August 2nd, 2017