A Review of the Nigerian Energy Industry

Financial market update

7 October 2011, Sweetcrude, Lagos- International News
EUR – the Euro clung to its gains of the past three sessions helped by short-covering after the European Central Bank took steps to keep banks afloat and on hopes of more policy measures to prop up banks.

INR: the Indian rupee rose as shares rebounded strongly following fresh efforts by euro zone policymakers to prevent precipitation of Europe’s debt problems into a financial crisis.

Nigeria News
· Bonds –
A sell off to start the session yesterday though yields went back down as sharply as they went up initially. The general direction was up for yields though the market seems to be stabilizing around these levels.

· Bills – Quite volatile session as the bill markets continue to grapple with the high cost of funding. The longer dated maturities went up about 50bps while the shorter dated maturities closed relatively flat

Money Market – OBB is holding at 11.25% while unsecured O/N rates are also stable at 11.50%. Market is still relatively thin on liquidity and rates are not expected to drop over the next week.

Interbank/WDAS – The Nigerian naira struck a new record low of $/NGN164.85 to the dollar in the interbank market on Thursday, pressured for a second day by the central bank’s comments earlier this week that it would not support the currency at all costs. After the market close, however, the bank took an alternative step to help protect the local currency, saying in a letter made publicly available that it would no longer allow oil companies to buy dollars at its auctions for buying oil product imports. Those companies should use the foreign exchange they earn from exporting crude oil, it said.

                               Hi              Low            Close            Prev.Close
USD/NGN      164.95/05     161.60/70    164.10/20      161.48/58

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