A Review of the Nigerian Energy Industry

Financial market update

12 December 2011, Sweetcrude, Lagos – Local and international financial market update.
· Nigerian Bills – Bullish session on Friday as demand lost at the auction on the short end continues to feed into the secondary market. Bills around 90 days to maturity dipped around 60bps. The bill market will stay active and volatile centred around maturities on the 15th, 22nd and 29th which will likely be met by OMO auctions to mop up this liquidity.

· Nigerian Money Market – OBB and unsecured rates both up 50bps on Friday at 15.00% and 17.000% respectively as liquidity thinned out further last week.”

· Nigerian Bonds – Market remained relatively quiet and volumes thin in the absence of any major flows or developments. The last auction for the year comes up this week Wednesday after which liquidity will likely dry out until the New Year.

· International Perspective

· ZAR – South Africa’s rand started weaker against the dollar and was seen under pressure as the market was disappointed by the European union summit, which did not offer a concrete deal to end the euro zone debt crisis

· GBP: Sterling pared gains against the dollar, retreating from a session high hit on speculation of a Chinese investment vehicle providing funding to euro zone countries, as risk sentiment wavered following a European summit.

· EUR – edging up from session low of $ 1.3334 hit after moody’s ratings agency said the two year old crisis is still in a “critical” and “volatile” stage.

Hi                  Low                Close          Prev.Close
USD/NGN     162.50/60       161.58/68        161.70/80      162.00/10

NIBOR(%)                         LIBOR(%)
O/N                    16.4167       USD 1 Month         0.27655
7 Day                  16.7083      USD 2 Month         0.39915
30 Day               16.9583      USD 3 Month          0.54175
60 Day               17.2083      USD 6 Month          1.61857
90 Day               17.4583      USD 12 Month         1.60400
Y/Y Consumer Inflation Oct 2011:                          10.50%
FX Reserves: 8 December 2011 (USD bn)                 33.14

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