A Review of the Nigerian Energy Industry

Financial market update

06 September 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Federal Government Tuesday said it was taking drastic measures to check the malaise of indiscriminate dumping of various products in the nation’s markets in order to reverse Nigeria’s massive trade deficit. He said the attitude of accepting whatever is imported into the country should be changed, to achieve a positive balance of trade.

EUROPE: European stocks advanced as investors waited for European Central Bank President Mario Draghi to give details of his plan to stem the region’s debt crisis. The Stoxx Europe 600 Index advanced 0.3 percent to 266.28 at 8:08 a.m. in London. The measure has surged 14 percent from this year’s low on June 4 as Draghi pledged to do everything possible to preserve the euro.

CHINA: Chinese stocks rose for the first time in three days on speculation policy makers will take more steps to stimulate the economy after a government agency approved subway plans for 18 cities. The Shanghai Composite Index increased 0.7 percent to 2,051.92 as of the close. About six stocks rose for every one that fell in the gauge, which sank yesterday to its lowest level since February 2009.

INDIA: India may attract as much as $40 billion in two years from individual investors overseas after Prime Minister Manmohan Singh’s government allowed them to directly access Asia’s fifth-biggest stock market. “Money which will come from this route will stay invested for longer periods of time” than that from foreign institutions, Thomas Mathew, who took over as the joint secretary to President Pranab Mukherjee this week, said in a phone interview yesterday. Investors from U.S. and Europe have already started opening accounts and trading under the new program, he said.

Bonds – Trading remained volatile and illiquid yesterday causing significant swings on points across the curve. Profit taking on the 2015 and 2018 maturities in Wednesday’s session pushed yields up 60bps on the average while takers fill out their orders at other points. 1yr t-bill auction result, however, expected to impact the short end of the curve in today’s session.

Bills – Light buying on the long dated bills yesterday due to last minute expectation of lower cut-off rate on the 1yr bill, results not yet announced but will definitely chart market trend today.

Money Market – O/N and OBB rates close at 11.50% and 11.00% respectively.

CBN CUT- OFF RATE – $/NGN 155.80
No. of banks- 19

Hi            Low          Close           Prev.Close
     158.65/75   158.10/20   158.20/30    158.45/55

Interest rates
NIBOR (%)                    LIBOR (%)
O/N              11.7083        USD 1 month          0.2280
7 Day            12.0417        USD 2 month         0.3250
30 Day         12.8750        USD 3 month         0.4099
60 Day         13.1667         USD 4 month         0.5139
90 Day         13.5417         USD 6 month         0.7007
USD 12 month       1.0265
Y/Y Consumer Inflation July 2012 :                  12.8%
FX Reserves: 3 September 2012 (USD bn)       39.225
MPR                                                                          12.00%

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

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