A Review of the Nigerian Energy Industry

Financial market update

15 September, 2011, Sweetcrude, Lagos- International News
. EUR – The euro slipped in Asia on Thursday, with initial relief over assurances from Germany and France about keeping Greece in the euro bloc wearing off amid skepticism over whether euro zone policymakers can really help Athens avoid default.

. ZAR: There are no guarantees that strategies to weaken South Africa’s rand would work and such options are limited now that the government’s budget is in deficit; “setting a target for the rand could have the unintended consequence of inviting speculators and others to test resolve or see how deep the pockets are” said Reserve Bank Governor Gill Marcus.

. CHF: The Swiss franc was largely unchanged against the euro and the dollar after the Swiss central bank said it would aim to cap strength in the domestic currency

Nigeria News
. Bonds –
Yields came off across most the curve yesterday as the expectation was that the primary rates would dip significantly. The 2015-19 maturities were sold lightly though. The DMO is set to issue only bonds with 7 & 8years to maturity for the last quarter and so most of the focus was on the shorter end of the curve. The results of the auction in addition to the inflation figure released yesterday and the possibility of a hike at the MPC will likely lead to a very volatile market over the next two to three days.

. Bills – Still bearish on the short end as O/N interbank market rates continue to rise short term. When supply on the short end of the bond curve dries up at the primary auctions we will likely see the demand filter into the T-bill market and this will put downward pressure on rates.

. Money Market – OBB averaged 10.75% while unsecured O/N rates are up another 100bps to close at 12.00% with liquidity very thin and market very short.

. Interbank/WDAS – CBN Offered and Sold $350, total demand was $ 510.67 with the lowest intervention rate at $/NGN 155.0754 (inc. The 1% commission) showing 28 points depreciation against the previous auction
Hi                Low          Close          Prev.Close
      156.35/45    155.37/47     156.15/25    155.36/46

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