A Review of the Nigerian Energy Industry

Financial market update

25 January 2012, Sweetcrude, Lagos – Local and international financial market update.
EMERGING MARKETS : Emerging market stocks rose to the highest level in almost three months after Apple Inc reported quarterly profits that more than double boosting the outlook for Asian exporters. MSCI emerging market index has gained 9.2% this year compared with the 5.1% advance in the MSCI World Index.

INDIA: India’s central bank which has been buying bonds to help ease a cash squeeze at banks ma scale back the purchase after it cut the reserve requirement for lenders yesterday. This could lead to a softening in yields. Loan growth in India has declined to a two year low as banks borrowed from the RBI each day since Oct 5 to meet shortages.

NIGERIA: The Senate has approved a $75 benchmark price for crude oil for the 2012 Appropriation Act, having passed the 2012-2015 Medium Term Fiscal Framework (MTFF). The Senators had earlier approved the 2012-2015 Medium Term Fiscal Framework for FG. The MTTF is a statutory requirement for submission to the National Assembly under the Fiscal Responsibility Act, 2007. The MTFF consists of the Medium Term Revenue Framework and the Medium Term

Expenditure Framework
Bonds – Stable market, light selling on the short end still not pushing yields up. First bond auction for the year comes up on Today and this will help stimulate the long end of the curve which has been very quiet in the last few trading days.

Bills – Sustained buying across most of the maturities in the market yesterday. Auction comes up today where rates are expected to close higher than current secondary market levels and so some exceptions across some maturities bucking the general market trends.

Money Market – OBB & unsecured rates are stable at 14.00% & 14.50% FAAC flows are expected in this week after being approved early last week.

Hi                Low            Close             Prev.Close
   161.15/25      160.62/72   160.70/80     161.20/30

NIBOR(%)                              LIBOR (%)
O/N             14.7083              USD 1 month                 0.2753
7 Day          15.0417                USD 2 month                0.4072
30 Day       15.5000               USD 3 month                0.5591
60 Day       15.9167                USD 6 month                0.7913
90 Day       16.2083               USD 12 month              1.1085
Y/Y Consumer Inflation December 2011 :                   0.30%
FX Reserves: 16 January 2012                      (USD bn) 33.72
MPR                                                                                  12.00%
Source: FMD and CBN

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