A Review of the Nigerian Energy Industry

Financial market update: 27092011

27 September, 2011, Sweetcrude, Lagos- International News
EUR – The Euro held gains in Asia following a sudden turnaround in investor mood from extreme skepticism to tentative optimism that Europe was really putting a plan together to deal with its debt and banking crisis

JPY: Japan’s government has decided to bring forward steps to ease the pain some companies feel from a stronger Yen and enact the measures before it completes an extra budget to
fund reconstruction spending

AUD: The Australian dollar gained early in the day bolstered by reports that officials are working on plans to recapitalize European banks raising hopes that a longer lasting solution to the region’s debt woes will be found.

Nigeria News
· Bonds –
Bearish sentiment yesterday with most of the sell off on the short end of the curve. Yields went up between 20-30 bps on the 2013&14 maturities and about 10bps on the 2015 maturity. We might see some more selling during the week, as high funding rates are pushing rates up with some players preferring to raise liquidity

· Bills – also a very bearish day in the bill markets with short dated bills up 50bps and an average 30bps from the 182 days out to the 364 day bill. The regular scheduled auction comes up tomorrow while there is a N50bio OMO auction of a 37-day bill. This is sure to lead to higher cut offs at the primary auction.

· Money Market – I OBB dipped to 10% while unsecured O/N rates went down to 10.50%. though FAAC funds have hit the system, it hasn’t been enough to boost liquidity and push rates down significantly.

· Interbank/WDAS – CBN offered and sold $350mio at the bi-weekly auction yesterday. Total demand was $551.27mio and the lowest intervention rate was 156.5702 (inc. 1% commission) signaling a 60 points depreciation against the previous auction rate.

Hi Low Close Prev.Close
158.15/25 156.55/65 157.90/00 157.25/35

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