A Review of the Nigerian Energy Industry

Financial market update

12 June 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Efforts by the Nigerian Stock Exchange (NSE) to list more firms are yielding more results as the exchange will list a reputable financial firm based in Abuja next week. This will be the second company to be listed so far this year. Companies have been shying away from listing since the market downturn. [THISDAY]

UK: Bank of England policy maker Adam Posen said that more asset purchases by central banks could aid the economy, and that he was “too optimistic” when he abandoned a push for more stimulus in April. The Bank of England, which has bought 325 billion pounds ($505 billion) of government bonds since it began its quantitative-easing program in 2009, left the target for purchases unchanged this month.

CHINA: China’s new loans exceeded estimates in May and more money went into longer-term lending, signalling support for investment projects that may help to prevent a deeper economic slowdown. Local-currency lending was 793.2 billion yuan ($125 billion), the People’s Bank of China said on its website yesterday. That was the most on record for the month of May and more than analysts’ 700 billion yuan median forecast.

Bonds – Quiet markets in general on Monday, some demand feeding into the market on the 2018s and 2019s. Yields came off across the curve as a whole between 2-10bps scattered across the tenors. Inflationary fears are still heavy on the minds of many market participants and so we might not see any significant rallies.

Bills – Yields are beginning to look interesting again at these levels and the sell off seems to have slowed and demand is feeding into the market. The new 364 day bill maturing 06/06/13 which was issued last week was listed on Monday in the secondary market and it dipped about 56bps as most players who missed out on the higher yields at the auction came in buying.

Money Market – OBB and unsecured O/N rates holding at 14.00% & 14.50%. Liquidity levels still relatively low.

CBN WDAS AUCTION
Offered: 300mio Sold: 300mio
Marginal rate: 155.90
Weighted average: 155.95
No. of Banks: 20

FX
Hi             Low            Close         Prev.Close
USD/NGN
162.93/03   162.58/68   162.87/97   162.68/78

NIBOR (%) LIBOR (%)

O/N

14.9583

USD 1 month

0.2408

7 Day

15.2500

USD 2 month

0.3468

30 Day

15.6667

USD 3 month

0.4679

60 Day

15.9167

USD 4 month

0.5681

90 Day

16.2917

USD 6 month

0.7369

USD 12 month

1.0702

Y/Y Consumer Inflation April 2012 :

12.9%

FX Reserves: 08 June 2012 (USD bn)

37.719

MPR

12.00%

Source: FMD and CBN

 

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