A Review of the Nigerian Energy Industry

Financial market update

07 May 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Asset Management Corporation of Nigeria (AMCON) is considering the option of taking the Nationalised banks on the sales block to the nation’s capital market, so as to give opportunity to the public to invest in the institutions. Chike –Obi, managing director of AMCON, who also disclosed that over 20 institutions have expressed interest in the Keystone, Mainstreet and Enterprise banks, said the option which is being considered along others, is to further deepen the market.

EUROPE: Francois Hollande defeated French President Nicolas Sarkozy as voters handed control of the second-biggest European economy to the Socialists for the first time in 17 years. The 57-year-old Hollande got about 52 percent against about 48 percent for Sarkozy, according to estimates by pollsters CSA and Harris Interactive. The campaign isn’t over; France elects its lower house of parliament in five weeks. The challenger inherits an economy that is barely growing, with jobless claims at their highest in 12 years and a rising debt load that makes France vulnerable to the financial crisis that has rocked the euro region the past two years. Sarkozy became the ninth euro leader to fall in that time and the first French president in 30 years to fail to win re-election.

CHINA: China raised the ceiling on foreign banks’ investments in securities ventures for the first time in more than a decade after two days of talks with the U.S. overshadowed by wrangling over activist Chen Guangcheng.

China agreed to let foreign companies raise their stakes in joint ventures with domestic securities firms to as much as 49 percent, according to a joint statement released after annual Strategic and Economic Dialogue talks in Beijing . The current maximum is 33 percent. It will allow similar stakes in futures brokers.

Bonds – Another quiet session on Friday, with some marginal movement along the curve. Trading continues to be cautious and relatively quiet.

Bills – After the heavy demand seen most of last week which had caused rates to dip, we saw some correction on Friday on the back of profit taking. With the CBN offering OMO bills and sentiment that the bills would close higher than current market levels we saw a sell off pushing rates up about 90bps on the short dated maturities. Offshore demand still remains strong however and it is likely we would see the primary auction this week bid quite heavy.

FX
                              Hi             Low           Close        Prev.Close
USD/NGN     157.25/35   157.19/29   157.20/30   157.15/25

NIBOR (%) LIBOR (%)

 

O/N

 

13.7917

 

USD 1 month

 

0.2388

 

7 Day

 

14.1667

 

USD 2 month

 

0.3458

 

30 Day

 

14.8750

 

USD 3 month

 

0.4659

 

60 Day

 

15.1250

 

USD 4 month

 

0.5651

 

90 Day

 

15.5000

 

USD 6 month

 

0.7284

 

USD 12 month

 

1.0492

 

Y/Y Consumer Inflation March 2012 :

 

12.10%

 

FX Reserves: 2 May 2012 (USD bn)

 

36.706

 

MPR

 

12.00%

 

Source: FMD and CBN

 

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