A Review of the Nigerian Energy Industry

Financial market update

19 August, 2011, Sweetcrude –International News:· EUR: The euro and commodity currencies such as the Australian dollar came under pressure on Friday after a raft of weak U.S. economic data and concerns about European banks sent skittish investors piling into U.S. Treasuries and away from stocks.

· AUD/NZD: The Australian and New Zealand dollars dropped to one-week lows on Friday as investors avoided risky assets for the safety of bonds after dire U.S. data raised the spectre of world recession while concerns about European banks mounted.

· CNY: The yuan fell slightly against the dollar on Friday as traders said a weaker-than-expected central bank fixing sparked a wave of shorting covering in dollars, although the market was still confident in continued yuan appreciation in the near term.

Nigeria News
· Bonds – The yield curve adjusted to the new unexpected primary cutoff rates at Wednesday’s auction given pre-auction secondary market levels, liquidity levels in the cash market and volume on offer. Yields were expected to come off lower but traders however remained cautious as the general drop in demand for bonds gets further prolonged.

· Bills – Relatively quiet session seen with drop in trade volumes, still no buying interest seen in the market despite the liquidity inflow and drop in the headline inflation rate to 9.20percent. Activities expected to pick up next week.

· Money Market – Unsecured O/N rate eased 400bps today to 7.00 percent, approved FAAC funds of NGN320bn was credited today, cash markets remain liquid up a total of NGN447bn.

· Interbank
Hi                 Low             Close          Prev.Close
      153.70/80    153.55/65      153.65/75  153.70/80

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