A Review of the Nigerian Energy Industry

Financial market update

15 August, 2011, Sweetcrude, Abuja – The Central Bank Of Nigeria announced on Friday that the cash sale to Bureau De Changes has been increased from US$500,000.00 to US$1,000,000.00 per bank per week.

Also, the Central Bank Of Nigeria will sell the sum of US$100,000.00 to BDCS  only on wed 17th August 2011 being the market day for BDC’s for the week ending 20th August 2011.

The sale of the USD 100,000.00 is for this week only. Sale for the subsequent weeks will still be USD 50,000.00 per BDC.

International News
· CHF:
The Swiss franc plunged more than 2 percent to two-week lows against the euro and the dollar in Asia on Monday on caution the Swiss National Bank would act further to weaken the franc and as markets found a steadier footing.

· CNY: The yuan slipped against the dollar on Monday morning after the People’s bank of China fixed a mid-point at a level that lagged market expectations, although it set the fixing at another record high for the fourth straight trading session.

· ZAR: South Africa’s rand firmed 1.2 percent against the dollar in early Monday trade, tracking a firmer euro and as traders saw the market settling after a volatile week last week, opening up some gains on the rand.

Nigeria News
· Bonds –
A quiet session on Friday with volumes still relatively low, however yields dipped across the curve. There is an auction on Wednesday and may see a slight sell off in the run up to the auction which will only be checked by the inflow of FAAC.

· Bills – Continued volatility on the short dated maturities with the September and October bills bought in Friday’s trading. Rates came off across all the maturities as some idle liquidity puts downward pressure on government securities. As FAAC is set to come in next week, we expect the markets to rally on the back of expected FAAC inflow this week and also expect the CBN to come in at the OMO window.

· Money Market – Unsecured O/N rates went up a further 50bps to close at 11.00% as liquidity thinned out. FAAC funds are expected in this week which will drive rates down to 7.00%.

· Interbank/WDAS – No news yet on amount being offered at today’s WDAS auction.

Hi                Low            Close        Prev.Close
154.00/10   153.40/50   153.65/75  153.92/02

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