A Review of the Nigerian Energy Industry

Financial market update

14 June 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: CBN on Tuesday doused concerns over the weakening of the naira against the dollar. The apex bank said the development was a temporary phenomenon and that it was capable of meeting all genuine demands in the foreign exchange market and calming the present pressure on the local currency. Sentiment is that the pressure is mainly due to speculative demand from fears that Nigeria’s external reserves could drop, particularly with the dwindling oil prices which may reduce the apex bank’s capability to meet demand in the market.

EUROPE: European stocks dropped for a second day as Moody’s Investors Service downgraded Spain and Cyprus, while investors awaited Italy’s first bond sale since the euro area offered to bail out Spain’s banks. The Stoxx Europe 600 Index dropped 0.3 percent to 241.89 at 8:04 a.m. in London today.

INDIA: Indian stocks dropped for the first time in three days after data showed inflation quickened faster than estimated in May. The BSE India Sensitive Index, or Sensex, slid 0.4 percent to 16,817.65 at 12:31 p.m. in Mumbai after changing direction at least 10 times before the inflation data. The gauge rallied 4.7 percent last week, its best weekly advance this year, amid optimism the Reserve Bank of India would reduce borrowing costs for a second time this year at its policy review on June 18.

Bonds – Markets still quiet in general on Wednesday, yields up across the curve in small moves about 7bps scattered across the short end of the curve. Continued fear of inflation holding the market and investors back.

Bills – Volatile markets yesterday with rates dipping initially but profit takers pushing the rates back up towards the close.

Money Market – OBB and unsecured O/N rates up to 14.50% & 15.50%. Liquidity levels still relatively low.

CBN WDAS AUCTION
Offered: 400mio Sold: 400mio
Marginal rate: 155.90
Weighted average: 155.98
No. of Banks: 18

FX
Hi               Low         Close       Prev.Close
USD/NGN       163.26/36  162.45/55  162.80/90  162.30/40

 

NIBOR (%) LIBOR (%)

O/N

15.2500

USD 1 month

0.2418

7 Day

15.6667

USD 2 month

0.3478

30 Day

15.9583

USD 3 month

0.4679

60 Day

16.2500

USD 4 month

0.5681

90 Day

16.5417

USD 6 month

0.7379

USD 12 month

1.0707

Y/Y Consumer Inflation April 2012 :

12.9%

FX Reserves: 12 June 2012 (USD bn)

37.625

MPR

12.00%

Source: FMD and CBN

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