A Review of the Nigerian Energy Industry

Financial market update

20 April 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The CBN is planning another round of stress tests of all banks in the country, to ascertain their level of compliance and soundness. The test, which is a follow-up to the last stress test conducted in 2009, that witnessed mergers and acquisitions of Intercontinental, Oceanic, Finbank, Equitorial and Union banks and the nationalisation of three others Bank PHB, Spring Bank and Afribank, will come before the end of the year and is part of the Financial Sector Assessment Programme (FSAP).

EUROPE: The finance chiefs from the G-20 are meeting today in Washington, in pressing Europe to intensify efforts to quell the turmoil as it spreads to Spain. IMF Managing Director Christine Lagarde welcomed pledges of about $320 billion for the IMF’s crisis-fighting coffers, and said that Europe must protect itself, boost economic growth and cut debt. Italian and Spanish bonds fell yesterday on speculation the crisis is worsening.

CHINA: China’s central bank pledged to ensure adequate availability of cash in the financial system by using tools including reductions in the reserve-requirement ratio.

Authorities will “appropriately take targeted liquidity management actions” based on circumstances including foreign- capital inflows and funding demand. Options include adding cash through reverse-repurchase operations and cutting required reserves.

Bonds – Light demand recorded at the short end of the curve, the 10.50% FGN MAR2014 came off 6bps though the reverse seen at the long end, appetite for longer duration remains weak and expected to be in the coming weeks.

Bills – Market records no change in yesterday’s session, trade volumes and demand remain low across the tradable tenors listed in the market. A pick – up in activities is expected early next week after the March inflation figure announcement.

Money Market – OBB and O/N rate reclined 50bps and 100bps to 14.00% and 14.50% respectively, this is from the OMO bill maturity inflow yesterday of about N 71.05 billion, though not sustainable into the coming week as it funds another round of FX auction today.

FX
                          Hi                Low             Close         Prev.Close
USD/NGN    157.35/45    157.98/08    157.04/14    157.15/25

 NIBOR(%)                                            LIBOR (%)

 

O/N

 

14.9583

 

USD 1 month

 

0.2398

 

7 Day

 

15.2500

 

USD 2 month

 

0.3471

 

30 Day

 

15.8333

 

USD 3 month

 

0.4657

 

60 Day

 

16.0833

 

USD 4 month

 

0.5661

 

90 Day

 

16.4167

 

USD 6 month

 

0.7304

 

USD 12 month

 

1.0472

 

Y/Y Consumer Inflation February 2012 :

 

11.90%

 

FX Reserves: 18 April 2012 (USD bn)

 

36.151

 

MPR

 

12.00%

 

Source: FMD and CBN

 

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