A Review of the Nigerian Energy Industry

Financial market update

15 August 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Andrew Yakubu, has said China had become the alternative market for Nigeria’s crude oil, following dwindling imports by the United States, which was the major buyer of Nigeria’s crude oil. Speaking at the sidelines of a recent oil and gas conference in Lagos, Yakubu stated that China was a very good market for any shortfall in the United States’ imports.

EUROPE: European stocks slipped, with the Stoxx Europe 600 dropping for a third day in four, as investors awaited a U.S. report on industrial production. The Stoxx 600 fell 0.4 percent to 269.43 at 8:01 a.m. in London. European stocks last week rose for a 10th week, extending the longest streak since January 2006, amid better- than-expected company earnings and speculation policy makers will do more to stimulate the economy.

INDIA: Prime Minister Manmohan Singh said India must treat measures to boost economic growth as a matter of national security after his allies opposed steps to attract overseas investors. Singh is struggling to salvage his development agenda as gridlock over attempts to open up the economy, graft scandals and elevated inflation deter investment, contributing to the slowest economic growth in almost a decade. Standard & Poor’s and Fitch Ratings have threatened to strip India of its investment grade score unless the government narrows the widest budget deficit among BRIC nations.

CHINA: China’s stocks fell, dragging down the benchmark index to the lowest in two weeks, on concern the nation’s economic slowdown is curbing demand for products from copper to household appliances. The Shanghai Composite Index slid 1.1 percent to 2,118.95 at the close yesterday, the lowest level since Aug. 2. The CSI 300 Index fell 1.1 percent to 2,331.61.

Bonds – Bond yields traded flat across the curve yesterday due to weak demand ahead of the auction. market views on yield levels expected to be clearer at the auction today from the bid range level and the direction to expect in the next few weeks.

Bills – New 1yr t-bill issued last week was listed on Tuesday in the secondary market, this was sold up 30bps from its opening level. Trades done yesterday largely on the sell-side with focus on the short- tenured bills up 60bps on the day, cash market remains illiquid and as such limiting any buy and hold view in the market.

Money Market – OBB flat at 16.00% and O/N rate up 100bps to close at 19.00%, cash market remains tight and illiquid.


Hi          Low     Close     Prev.Close

USD/NGN   157.64/74   157.15/25   158.64/74   157.35/45

Interest rates
NIBOR (%)                      LIBOR (%)
O/N                18.2500       USD 1 month           0.2385
7 Day              18.7083       USD 2 month           0.3330
30 Day           20.3333       USD 3 month           0.4365
60 Day           21.3750        USD 4 month          0.5404
90 Day           22.1667        USD 6 month          0.7192
USD 12 month         1.0460
Y/Y Consumer Inflation June 2012 :                   12.9%
FX Reserves: 13 August 2012 (USD bn)              36.696
MPR                                                                             12.00%

Source: Reuters, Bloomberg, , FMD, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

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