A Review of the Nigerian Energy Industry

Financial market update

07 September 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s stock index hit a 59 week high on Wednesday, crossing the psychological 24,000 point level, on confidence from the recovery of the banking sector dealers said. This is just as the council of the Nigerian Stock Exchange (NSE) may have consented to the earlier request for concessions by selected market-makers, as their activities kick-off on September 18, 2012.

EUROPE: European stocks rose, extending yesterday’s biggest rally in a month, as investors awaited a U.S. report on payrolls and unemployment. The Stoxx Europe 600 Index advanced 0.3 percent to 272.44 at 8:02 a.m. in London, heading for a weekly gain of 2.3 percent. The gauge surged the most since Aug. 3 yesterday after European Central Bank President Mario Draghi said policy makers agreed to an unlimited bond-buying program designed to lower interest rates in the region.

CHINA: Concern the government isn’t doing enough to prevent a deeper slowdown in the economy dragged the Shanghai Composite down 2.7 percent in August, the fourth month of declines. That’s the longest streak since the five months through August 2004, according to data compiled by Bloomberg. Officials have refrained from easing monetary policy since cutting interest rates in June and July and lowering banks’ reserve requirements three times from November to May.

INDIA: Indian stocks advanced, tracking global equities, as the European Central Bank’s announcement of an unlimited bond-buying plan boosted demand for riskier assets. The BSE India Sensitive Index, or Sensex, rose 1.8 percent to 17,656.19 at 11:28 a.m. Mumbai time.

Bonds – Trading activities picking up on Thursday and liquidity is returning to the markets. Demand still exists across the curve though some light profit taking on the 16.39% FGN JAN2022. Further dip expected on the yield curve in the coming weeks.

Bills – Yields dip in Thursday’s session due to the new cut-off rate on the 1yr bill at 13.8726% which is lowest primary rate this year. OMO auction conducted however reduced the impact of the expected dip in yields, a total of ngn67.35 bio sold at today’s OMO auction.

Money Market – Lending rates recline to 10.50% on OBB and 10.75% on O/N, excess inflow of ngn30.52 bio from maturing t-bill after funding for Wednesday’s auction.

                             Hi                Low              Close         Prev.Close
USD/NGN       158.20/30   157.65/75   157.85/95      158.20/30

Interest rates
NIBOR (%)                   LIBOR (%)
O/N              10.5000      USD 1 month        0.2275
7 Day            11.4583       USD 2 month        0.3235
30 Day         14.0000      USD 3 month        0.4084
60 Day         15.0000      USD 4 month        0.5124
90 Day         15.5833       USD 6 month        0.6982
USD 12 month      1.0245
Y/Y Consumer Inflation July 2012 :              12.8%
FX Reserves: 4 September 2012 (USD bn)   39.351
MPR                                                                      12.00%

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

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