A Review of the Nigerian Energy Industry

Financial market update

03 February 2012, Sweetcrude, Lagos – Local and international financial market update.
Local News
· Bonds – Relatively quiet trading day prices largely stable across the curve.
· Bills – Another OMO auction on Thursday in 189 day bills closing at 16.10%. Secondary market though relatively thin on the back of the OMO offerings still has the short end being bough with the 91 day related maturities down around 50bps. Most of the demand though is feeding into the auctions as opposed to the secondary market. The auctions will likely continue as long as the money market stays liquid.

· Money Market –
OBB & unsecured rates are 13.00% & 13.75% respectively. Rates are being kept low by the liquidity in the money markets at the moment with the market up about N213bio to open yesterday. ”

· Interbank Foreign Exchange – The Nigerian naira strengthened against the U.S dollar on the interbank market yesterday as there was a sale of $ 150 mio by one of the oil majors. This directly boosted the dollar supply at the interbank and helped strengthened the value of the local currency

International News
· Nairobi – Foreign demand for high- yielding debt in Kenya and Uganda is likely to underpin their respective currencies. Offshore interest in Kenyan fixed income and exporter dollar inflows are expected to offset importer demand for foreign exchange, keeping the shilling steady versus the greenback.

· Euro Zone: The European Central bank must take part in Greece’s debt swap, Finance Minister Evangelos Venizelos said on Thursday, warning that a rescue package for Athens also hinges on other issues being resolved such as labor reforms and how Greek banks are to be recapitalized.
                                 Hi               Low              Close               Prev.Close
USD/NGN     161.05/15        160.18/28       160.40/50          161.05/15

NIBOR(%)                      LIBOR (%)
O/N                 13.8333      USD 1 month                0.26250
7 Day               14.2917       USD 2 month               0.38800
30 Day            14.7083       USD 3 month               0.53060
60 Day            15.0833       USD 6 month              0.77000
90 Day            15.4583       USD 12 month             1.70929
Y/Y Consumer Inflation December 2011 :              10.30%
FX Reserves: 02 February 2012                  (USD bn) 34.6
MPR                                                                                12.00%
Source: FMD and CBN

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