A Review of the Nigerian Energy Industry

Financial market update

02 February 2012, Sweetcrude, Lagos – Local and international financial market update.
USA : The yield on US government bonds increases yesterday in anticipation of a improved US employment data which is expected for January. The benchmark US 10 year yield rose 2bps to 1.84%. Some analysts expect yields on US treasury yields to increase towards the end of the year due to a positive trend in employment.

NIGERIA : The Governor of the Central Bank of Nigeria, Mr. Lamido Sanusi, on Tuesday cautioned the National Assembly against increasing the 2012 Budget oil price benchmark from $70 per barrel to between $75 and $80 per barrel saying such moves would further exert pressure on the country’s foreign reserves.

Bonds – With the MPC holding rates stable and the money markets liquid demand fed into the market on Wednesday with the concentration on the relatively higher yielding securities. The 10.70% FGN MAY 2018 came off 14bps, while the 5.50% FGN FEB 2013 originally dipped about 30 bps but closed down 12bps on the day.

Bills – With yet another OMO offer of N100bio on Wednesday aimed at mopping up liquidity, the market was bearish as expectation of higher yields than currently available in secondary lead the market to sel. Rates went up on the longer dated maturities an average 20bps as most of the activity was concentrated

Money Market – OBB & unsecured rates are 13.00% & 13.50% respectively. Rates are being kept low by the liquidity in the money markets at the moment with the market up about N312bio to open today.

CBN WDAS SPOT: The CBN offered and sol USD250M. The Marginal Bid Rate was 158.27 (including the 1% CBN commission). Appreciation of 35 kobo since last auction.

Hi                   Low                Close              Prev.Close
161.15/25         161.00/10       161.05/15            161.06/16
NIBOR(%)                             LIBOR (%)
O/N                 13.5833             USD 1 month              0.2640
7 Day               14.0417             USD 2 month              0.3925
30 Day            14.5417              USD 3 month              0.5371
60 Day            14.8750             USD 6 month              0.7725
90 Day            15.2500             USD 12 month             1.0907
Y/Y Consumer Inflation December 2011 :                     10.30%
FX Reserves: 27 January 2012                          (USD bn) 34.41
MPR                                                                                       12.00%
Source: FMD and CBN

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