A Review of the Nigerian Energy Industry

Financial market update

06 August 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The minister of finance, Ngozi Okonjo-Iweala confirmed that the 2012 budget was passed in April and 41.3% has been implemented while addressing members of the Senate Committee on Appropriation on Thursday. She said that the sum of N1.3 trillion was appropriated for capital expenditure in the 2012 budget and out of this the ministry has released N404 billion with N324 billion cash backed.

“So far, 56% of the capital budget had been utilized while 44% was still outstanding” and N1.6 trillion released so far for recurrent expenditure.

EUR: The Euro hit a one- month high against the dollar as traders unwound bearish bets on the single currency after stronger than expected U.S jobs data last week improved investors’ appetite for risk.

GBP: trade weighted sterling fell to its lowest in three weeks, following British pound’s drop against the EUR, data from bank of England showed

ZAR: The rand was steady near a two week high after better than expected U.S payrolls data boosted riskier assets. The unit is likely to have a quiet but firmer session with no data expected.

INDIA: European stocks rose for a ninth week as U.S. economic data surpassed estimates, outweighing comments by the Federal Reserve and the European Central Bank that disappointed investors looking for more definitive steps to support growth. The Stoxx 600 rallied 2.2 percent to 265.58 last week, its longest stretch of gains since January 2006.

Nigerian Bonds – Bond yields continue to trend higher though light demand was recorded on the 7yr tenor bond off 20bps on Friday. No demand expected this week as the Tbill auction is expected to set new levels and direction on the yield curve.

Nigerian T- Bills – Yield correction continued in the market on Friday, active bearish session to close the week after an initial run on bills for the better part of the week, volatility expected in the new week as we approach the t-bill auction.

Nigerian Money Market – Traces of stability returning to the cash market, OBB closed flat at 17.00% but O/N rate edged higher by 150bps to 18.50%.

                               Hi              Low              Close          Prev.Close
USD/NGN    161.85/95    160.30/40       161.80/90     161.50/60

NIBOR (%)                     LIBOR (%)
O/N               17.5000        USD 1 month           0.2438
7 Day             17.9583        USD 2 month           0.3378
30 Day          18.2083        USD 3 month          0.4394
60 Day          18.5000       USD 4 month           0.5459
90 Day          18.6250       USD 6 month           0.7237
USD 12 month         1.0462
Y/Y Consumer Inflation June 2012 :                 12.9%
FX Reserves: 01 August 2012 (USD bn)            36.546
MPR                                                                          12.00%
Source: FMD and CBN


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