A Review of the Nigerian Energy Industry

Financial market update

16 May 2012, Sweecrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s naira depreciated to the weakest in two months against the dollar after the country’s inflation accelerated. The naira declined 0.1% to 158.125 per dollar as of 5:01pm in Lagos on Tuesday, according to data compiled by Bloomberg. Inflation accelerated to 12.9% in April, the fastest since October 2010, from 12.1% in March, the National Bureau of Statistics said yesterday. The Central Bank of Nigeria, which raised its policy rate to a record 12% in October, forecast inflation will peak at 14.5% in the third quarter before gradually slowing to below 10% by the end of 2013.

EUROPE: Greece is to repay 435 million euros of bonds which fell due yesterday as the nation faces new elections after leaders failed to form a government. Greece will pay the principal and interest on foreign law notes which weren’t tendered into the country’s debt restructuring, the Athens-based Finance Ministry said in an e-mailed statement. The repayment won’t prejudice future decisions on other untendered bonds, the ministry said.

UK- Chancellor of the Exchequer George Osborne said economies across Europe including Britain are being damaged by uncertainty over the future of the euro region rather than budget cutting. Osborne is seeking to counter a growing anti-austerity backlash in Europe, where voters in France and Greece revolted against cuts in elections this month. Osborne insists he is sticking to his deficit-reduction plans to shield Britain from the crisis of confidence engulfing the euro region.

INDIA: Indian stocks rebounded from a four- month low as the rupee gained on speculation the central bank intervened to stem the currency’s losses and as some investors judged the recent declines as excessive. The BSE India Sensitive Index rose 0.7 percent to 16,328.25 at close yesterday, its first advance in six days.

Bonds – On the back of rising CPI to 12.90% the market sold off yesterday especially ahead of today’s bond auction which would likely close higher than originally expected but we won’t likely see any overly aggressive moves as the market had been trading very cautiously in the light of higher expected inflation which is now the case.

Bills – A sell off also in the bill market yesterday, around 30-40bps as the rise in inflation plays out in the markets and also as some players take profit at current levels.

Money Market – OBB and unsecured O/N rates are averaging 14.00% & 14.50% respectively as the market goes short liquidity with opening balances showing market down N51billion.

FX
                          Hi              Low          Close      Prev.Close
USD/NGN 159.25/35  157.60/70  157.90/00  157.85/95

NIBOR (%) LIBOR (%)

 

O/N

 

14.7500

 

USD 1 month

 

0.2388

 

7 Day

 

15.0833

 

USD 2 month

 

0.3448

 

30 Day

 

15.4167

 

USD 3 month

 

0.4659

 

60 Day

 

15.7917

 

USD 4 month

 

0.5661

 

90 Day

 

16.1250

 

USD 6 month

 

0.7319

 

USD 12 month

 

1.0615

 

Y/Y Consumer Inflation April 2012 :

 

12.9%

 

FX Reserves: 14 May 2012 (USD bn)

 

37.023

 

MPR

 

12

 

Source: FMD and CBN

 

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