A Review of the Nigerian Energy Industry

Financial market update

18 June 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria has expressed her commitment towards a Regional Maritime Development Bank (RMDB) for the West and Central Africa sub-regions, which is to be established in the country. The bank, which is to be established under the auspices of the Maritime Organisations of West and Central Africa (MOWCA), is expected to boost human capacity development, create jobs and create avenue for the provision of cheap funds to finance the acquisition of vessels and other projects.

ASIA: Asian stocks and the euro rose to the highest levels in a moth while European equity futures and commodities climbed as gains by pro-bailout parties in Greek elections eased concern the nation would exit the euro.

INDIA: India unexpectedly left interest rates unchanged as the fastest inflation among the biggest emerging markets narrows scope to bolster a struggling economy. This decision contrasts with rate cuts in Brazil and China in the past three weeks. RBI Governor’s room to counter the weakest Indian growth in almost a decade is being limited in part by a plunge in the rupee, which has stoked an inflation rate already above 7%. In the CBNs view headline inflation remains above levels consistent with sustainable growth which has lead to this decision.

CHINA: China’s home values fell in a record 54 of 70 cities tracked by the government in May as developers cut prices to boost sales amid housing curbs. China has pledged to maintain its curbs on housing market even as economic growth is slowing, prompting the central bank to cut borrowing costs for the first time since 2008 on June 7

Bonds – Friday was a quiet day in the market with yields stable across the curve.

Bills – Also a relatively quiet day in the bill markets, rates coming off lightly on the long end.

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

                             Hi             Low             Close       Prev.Close
USD/NGN    163.15/25    162.90/00   163.10/20  162.80/90

NIBOR (%)                        LIBOR (%)

O/N                 15.7917          USD 1 month             0.2428

7 Day               16.0417          USD 2 month            0.3478

30 Day            16.2500         USD 3 month             0.4679

60 Day            16.5833          USD 4 month            0.5681

90 Day            16.8750          USD 6 month            0.7374

                                                 USD 12 month            1.0695

Y/Y Consumer Inflation April 2012 :                         12.9%

FX Reserves: 13 June 2012 (USD bn)                      37.591

MPR                                                                               12.00%

Source: FMD and CBN


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