A Review of the Nigerian Energy Industry

Financial market update

21 May 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: A Bill that would compel most of the multinationals operating in the country to list on the Nigerian Stock Exchange (NSE) has been submitted to the House of Representatives for debate and passage, Abdulmumin Jubril, chairman, House Committee on Finance, said on Thursday. The Bill, if it scales through, would address current concerns that most of the multinationals, including oil and telecommunications companies, make so much profit from the economy but have failed to list on the NSE.

CHINA: Chinese Premier Wen Jiaboa’s pledge to focus more on bolstering growth spurred speculation the government will step up efforts to combat a slowdown in the world’s second largest economy. Wen called for “putting stabilizing growth in a more important position” an d didn’t mention concern about inflation. The change in language suggest that the authorities are seriously concerned about growth.

EUROPE: German and French leaders meet this week to map out a revised plan for the euro as the Group of Eight exposed disagreement on a rescue strategy. All the while with Greece lurching towards a possible exist and Spain’s budget deficit widening.

INDIA: India’s benchmark bonds were steady with the yield holding at a one week high on concern record sales of sovereign debt will damp demand for existing notes. The finance ministry plans to raise Rs150 billion (USD2.7billion) of securities this week as part of its plan to borrow Rs5.69 trillion in the fiscal year through March 2013. Investments in bonds also slowed after the central banks dollar sales aimed at steaming a slide in the rupee drained cash from the banking system.

Bonds – Market sentiment continues to be lightly bearish, market participants are still weary of rising inflation and as such trading activity continues to be largely muted with yields inching up almost daily.

Bills – Muted session today with rates closing largely flat.

Money Market – OBB and unsecured O/N rates are averaging 14.00% & 15.00% respectively.”

                             Hi            Low           Close       Prev.Close
USD/NGN 159.32/42   158.48/58   158.50/60   158.75/85

NIBOR (%)                      LIBOR (%)

O/N              14.9583         USD 1 month         0.2398

7 Day            15.2917          USD 2 month        0.3458

30 Day         15.6667          USD 3 month        0.4669

60 Day         15.9583           USD 6 month       0.7364

90 Day         16.2500          USD 12 month      1.0690

Y/Y Consumer Inflation April 2012 :                 12.9%

FX Reserves: 14 May 2012             (USD bn) 37.072

MPR                                                                    12.00%

Source: FMD and CBN


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