A Review of the Nigerian Energy Industry

Financial market update

14 December 2011, Sweetcrude, Lagos – Local and international financial market update.
· EUROPE – This month’s credit-rating downgrades of French banks are failing to boost their short-term funding costs as fast as those of the other lenders that contribute to the London interbank offered rate. Some market players said they can borrow in USD for three months at between 0.585 and 0.5925 percent.

· USD – Focus has shifted to the Senate now that the House has ignored a White House veto threat and approved a payroll tax cut bill that also opens the door for an oil pipeline and spending cuts that Democrats oppose. The House approved the Republican bill Tuesday by a vote of 234-193.

· INDIA – India’s inflation slowed to the lowest level in a year, boosting the central bank’s scope to support growth by pausing its record interest-rate increases. The benchmark wholesale-price index rose 9.11 percent in November from a year earlier, according to the Commerce Ministry.

· Economic / Central Bank News

The Joint Senate Committee on Petroleum (Downstream); Appropriation and Finance, investigating the management of fuel subsidy, has disclosed that over $3 billion (N471 billion) is currently owed by the NNPC as outstanding payment on fuel subsidy. The executive secretary of (PPPRA) Reginald Elijah, told the Committee that the outstanding sum was for the commercial transactions that occurred from the importation of crude oil.

· Bonds – Bearish sentiment yesterday on the back of the OMO offering of T-Bills. Yields went up across the whole curve with the expectation of further OMO auctions before the end of the year.

· Bills – With an offer of N150bio in OMO bills spread across the 135day, 289day & 317day market opened up about 30bps yesterday above Monday’s close. The short end was sold as players continue to try and switch for longer dated higher yields at the OMO auctions.

· Money Market – OBB dipped 100bps to 14.00% as unsecured rates went down 150bps to 16.00% as the $2billion excess crude disbursement was paid on Monday in local currency.”


Hi          Low          Close          Prev.Close

USD/NGN  162.35/45     162.00/10      162.30/40      162.15/25

NIBOR(%)                         LIBOR (%)
O/N                  15.5833    USD 1 month         0.2783
7 Day                16.0417    USD 2 month         0.4032
30 Day             16.3333    USD 3 month         0.5463
60 Day             16.6667    USD 6 month         0.7705
90 Day             16.9167    USD 12 month        1.0934
Y/Y Consumer Inflation Oct 2011 :                   10.50%
FX Reserves: 08 December 2011      (USD bn) 33.144
MPR                                                                        12.00%
Source: FMD and CBN

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