A Review of the Nigerian Energy Industry

Financial market update

10 October 2011, sweetcrude, Lagos- International News
· EUR –The euro rose, buoyed by a flurry of short-covering after leaders of Germany and France promised a new comprehensive plan by the end of the month to recapitalize euro zone banks.

· ZAR – South Africa’s rand started the week on a firmer note, maintaining gains below the psychologically important 8.00 level in what may indicate the firmer bias will hold for now

Nigeria News
· Bonds –
Sustained sell-off across the yield curve, another significant correction witnessed on Friday with yields up 120bps at the short end of the curve and the 20yr bond doing a 61bps move upwards, the sell-off is in sharp reaction to the emergency MPC meeting where market views expect a 100bps hike in MPR as part of further tightening measures. Outlook remains bearish as the correction continues.

· Bills – The OMO auction announcement early Friday Morning and the Emergency MPC meeting caused a panic sell-off in the first few minutes of Fridays session, yields on bills moved 120bps up though in an illiquid session given the uncertainties around the outcome of the scheduled meeting on Monday. 27dy bill was issued at 12.3056% and 55dy bill at 12.399% Outlook remains bearish in the coming week as the correction on yields continues.

· Money Market – OBB/ ON rate maintained at 11.25% and 11.50% respectively. Liquidity squeeze continues as cash market is in debit of ngn200 bio.

· Interbank – The Nigerian Naira strengthened sharply on the interbank market on Friday, rebounding from an all-time low the previous session, after the central bank said it would hold an extraordinary monetary policy committee meeting on Monday. 2.5 percent stronger than Thursdays Close. At today’s Bi-weekly Auction, the Central bank has offered $ 400 mio for Sale.

Hi              Low             Close          Prev.Close
164.25/35    160.10/20    160.10/20    164.00/10

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