Fdc Bi-Monthly Economic and Business Update

Fdc Bi-Monthly Economic and Business Update

  • Submitted By: iswampa
  • Date Submitted: 06/14/2009 7:44 AM
  • Category: Business
  • Words: 3343
  • Page: 14
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Financial Derivatives Company Limited
May 26 —June 9, 2009 Volume 1, Issue 1

FDC Bi-monthly Economic & Business Update
Nigerian economic performance in Q2 2009 is expected to deteriorate relative to Q1 where a growth rate of 6.3% was recorded. Although there are no official growth rate projections, consensus growth estimate is between 4 – 5%. This is below the 6.3% recorded in Q1 2009 and FGN’s 2009 projection of 8%. The non-oil sectors, mainly agriculture, telecom and trade, will continue to be the drivers of growth but they will under-perform the oil sector in revenue terms.

Highlights: • Goldman issues upbeat crude oil price forecast for 2009 and predicts further gains in 2010, as demand recovers and supply shrinks. • Naira strengthens by 7% against the greenback at the parallel market as the CBN begins unwinding forex restrictions • Deposit interest rates soared at the inter bank market, fuelled by the Apex bank clarifying that the 15% cap on deposits is not applicable to inter bank trading • FG revokes sale of NITEL to Transcorp and approves interim board • Senate confirms Sanusi Lamido as the new CBN Governor • Nigerian Stock Exchange introduced a

The constraints to growth include oil production cuts arising from OPEC quota and militancy activities in the Niger Delta, power supply shortages, credit crunch and contraction in fiscal revenue. Power supply from the national grid, now estimated at 1300MW, is sharply below the minimum required for subsistence and manufacturing activities. Another constraint to growth is the reduction in oil production due to quota and militancy. In May, Nigerian oil production stood at 1.6mbpd despite a production capacity of 3.1mbpd. In the near term, we expect oil production to improve marginally as OPEC is likely to increase its members’ quota as oil prices rebound.

temporary order limit of 200,000 shares due to technical problems with its trading engine

GDP Growth - Nigeria/SSA/World 8 6 4 % 2 0 -2...

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