A Review of the Nigerian Energy Industry

Financial market update

05 August 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The 2012 budget is threatened, as Nigeria fails to pump 2.48 million barrels of crude oil per day as proposed. The Central Bank of Nigeria (CBN) said on Monday that the country pumped 2.12 million barrels per day of crude in the second quarter, well below the 2.48 million bpd which the finance ministry has projected in this year’s budget. The CBN said in its second quarter review of the economy, published on its website, that oil production had risen from an average of 2.06 million bpd in the first quarter, according to Reuters.

EUROPE: European stocks were little changed as investors await tomorrow’s European Central Bank meeting. The Stoxx Europe 600 Index advanced 0.1 percent to 265.64 at 8:07 a.m. in London. European stocks retreated the most in two weeks yesterday as a report showed U.S. manufacturing unexpectedly contracted in August.

CHINA: China’s stock indexes fell, dragging the Shanghai Composite Index to the lowest level since February 2009, on concern the economic slowdown is deepening. The Shanghai Composite Index dropped 0.3 percent to 2,037.68 at the close. Signs that China’s economic slowdown is deepening have dragged the Shanghai Composite down 8.5 percent this quarter. The gauge sank 2.7 percent in August, a fourth straight month of declines.

INDIA: Indian stocks fell, tracking Asian equities, as economic reports from the U.S. to China stoked concern global growth is slowing. The BSE India Sensitive Index, or Sensex, fell 0.3 percent to 17,393.78 at 9:41 a.m. in Mumbai.

Bonds – Profit taking moves on the 2014, 2019 and 2022 maturities in yesterday’s session. Demand however recorded on other parts of the yield curve due to higher yielding levels compared to the three bonds included on the GBIEM index which have recorded massive demand in the last weeks.

Bills – Relatively quiet and flat session on yields as another OMO auction was conducted on Tuesday, lower cut-off rates still expected at today’s primary auction from the previous so as to reflect current market trend and liquidity.

Money Market – O/N and OBB rates close at 11.50% and 11.00% respectively, another OMO auction was conducted yesterday where ngn34.79 bio was sold on the 58dy and 72dy bills.

                          Hi              Low               Close      Prev.Close
USD/NGN  158.60/70   157.98/08    158.55/65   158.20/30

Interest rates
NIBOR (%)                    LIBOR (%)
O/N            11.0000       USD 1 month         0.2283
7 Day          11.8333       USD 2 month         0.3253
30 Day       13.7500       USD 3 month         0.4119
60 Day       15.2500       USD 4 month         0.5169
90 Day       15.7500       USD 6 month         0.7017
USD 12 month        1.0270
Y/Y Consumer Inflation July 2012 :              12.8%
FX Reserves: 31 August 2012 (USD bn)        38.854
MPR                                                                      12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

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