A Review of the Nigerian Energy Industry

Financial market update

23 November 2011, Sweetcrude, Lagos – Local and international financial market update.

· EUROPE – The EUR declined for the sixth time in eight days against the USD before data that may add to sings the Europe’s debt crisis is damping economic growth. Manufacturing in Germany and France fell this as certain parties expect the Euro Zone to go into a recession sometime next year.

· INDIA –The Rupee rose earlier today erasing earliest losses on speculation the central bank sold dollars to curb the works slide in the currency in three years. The INR advanced to 51.1175 per USD as of this morning in India

· CHINA – The Yuan halted a four day decline after yesterday reaching its weakest level in almost a month on optimism global funds will add to holdings of Chinese assets as policy makers take steps to counter an economic slow down.

· Nigeria’s government may be ready to present its spending proposals for 2012 to parliament by the start of December. The government plans a 2012 budget of NGN 4.8 trillion. The crude oil price for next years budget has been revised down to USD70 per barrel form USD75 says the minister.

Bonds – The rally started yesterday today and was sustained all through the session, strong demand on the 2013 and 2014 bonds pulled it’s yield down about 89bps. This was expected given the relative value on it’s yields compared to the long tenor bonds which has traded lower levels in the last three weeks, this rally will be sustained into the coming weeks defying the liquidity squeeze in the cash markets and year -end book building activities.

· Bills – A sharp reaction to the rate decision on Monday caused a 60 – 80bps dip in yields on all traded bill maturities, we expect a sustained buying interest till after the auction in the event of some bids not winning at the auction.

· Money Market – OBB rate back up to 15.50% levels and O/N to 17.50%. Market remains illiquid.


                               Hi              Low                Close           Prev.Close

USD/NGN      159.50/60    158.68/78    159.25/35    1559.40/50


NIBOR (%)                             LIBOR (%)
O/N                         17.5000      USD 1 month            0.2572
7 Day                       17.7500      USD 2 month            0.3764
30 Day                    18.0000     USD 3 month            0.5003
60 Day                    18.2500      USD 6 month            0.7122
90 Day                    18.4530      USD 12 month           1.0342
Y/Y Consumer Inflation Oct 2011 :                               10.50%
FX Reserves: 17 November 2011                    (USD bn) 33.01
MPR                                                                                    12.00%
Source: FMD and CBN

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