I Nigeria Economy I May 2014 Nigeria | Economy | Monetary MPC monitor May 2014 | 3 Pages May MPC- Policy variables held constant After a two-day deliberation, the Monetary Policy Committee decided to maintain status quo by keeping Monetary Policy Rate (MPR) at 12% with CRR on public and private sector deposits also retained at 75% and 15% respectively in line with our expectations. The committee considered among other factors, the stability in the domestic economy as well as the improved global growth outlook. We see continued stability in the financial markets as the MPC’s decision was largely anticipated by major stakeholders. There may however be slight gyrations ahead of the next MPC meeting to be chaired by the new CBN governor in July. Key Decisions Taken    MPR retained at 12% CRR on Public and Private deposits held at 75% and 15% respectively While maintaining all other rates at their current levels Committee’s Considerations  The committee noted the strengthening growth in the Global Economy.  The committee acknowledged the results of the rebased GDP estimates as released by the NBS, while noting the changes in the structure of the Economy given the result.  The committee expressed satisfaction with the current stability in the financial markets, including the relative improvement in the capital market.  Overall, the committee reiterated the fact that rising core inflation, security upheaval and political tension remain the major concerns going forward. 1 www.meristemng.com I Nigeria Economy I May 2014 Our comments  We do not see any major negative reactions as a result of the MPCs latest decision. However, we believe the stability of the market will depend on body language of the in-coming CBN Governor going forward.  To check the increased liquidity that may arise from T-Bills maturities, we see the CBN resorting to increased OMO auctions. 2 www.meristemng.com Nigeria I Economy I May 2014 Contact Information Brokerage Services [email protected] [email protected] (+234 803 361 6176) (+234 802 394 2967) Investment Banking/Corporate Finance [email protected] [email protected] (+234 806 273 2560) (+234 805 521 1605) Wealth Management [email protected] (+234 803 301 3331) [email protected] (+234 803 613 9123) www.meristemwealth.com Tel:+234 01 738 9948 Registrars [email protected] www.meristemregistrars.com Tel: +234 01 280 9250 (+234 803 324 7996) Trustees [email protected] Tel: +234 01 448 5990 (+234 0803 717 9556) Client Services [email protected] (+234 805 846 0048) Investment Research [email protected] [email protected] [email protected] Tel: +234 01 295 3135 Corporate websites: www.meristemng.com (+234 802 454 6575) (+234 809 183 9487) www.meristemwealth.com www.meristemregistrars.com Meristem Research can also be accessed on the following platforms: Meristem Research portal: meristem.com.ng/rhub Bloomberg: MERI <GO> Capital IQ: www.capitaliq.com ISI Emerging Markets: www.securities.com/ch.html?pc=NG Reuters: www.thomsonreuters.com FactSet: www.factset.com 3 www.meristemng.com Nigeria I Economy I May 2014 IMPORTANT INFORMATION: DISCLAIMER Meristem Securities Limited (‘’Meristem’’) equity reports and its attendant recommendations are prepared based on publicly available information and are meant for general information purposes only and it may not be reproduced or distributed to any other person. All reasonable care has been taken to ensure that the information contained herein is not misleading or untrue at the time of publication; Meristem can neither guarantee its accuracy nor completeness as they are an expression of our analysts’ views and opinions. Meristem and any of its associated or subsidiary companies or the employees thereof cannot be held responsible for any loss suffered by relying on the said information as this information as earlier stated, is based on publicly available information, analysts’ estimates and opinions and is meant for general information purposes and should not be construed as an offer to buy or sell or a solicitation of an offer to buy or sell securities or any financial instruments. The value of any investment is subject to fluctuations, i.e. may fall and rise. Past performance is no guide to the future. The rate of exchange between currencies may cause the value of investment to increase or diminish. Hence investors may not get back the full value of their original investment. Meristem Securities is registered with the Securities and Exchange (SEC) and is also a member of The Nigerian Stock Exchange (The NSE). Meristem Securities’ registered office is at 124 Norman Williams Street, South West, Ikoyi, Lagos, Nigeria. Website: www.meristemng.com; Email: [email protected]. © Meristem Securities Limited 2014. 4 www.meristemng.com