A Review of the Nigerian Energy Industry

Financial market update

11 September 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s foreign reserves which have been on the rise since last month as a result of appreciation in crude oil prices climbed further to $39.758 billion as at Friday. Data obtained from the Central Bank of Nigeria’s (CBN’s) website showed that the amount represented an improvement by $3.212 billion, compared with the $36.547 billion at which the reserves stood on August 1. The last time the foreign reserves rose to almost $40 billion was exactly two years ago.

EUROPE: Corporate borrowers in Europe are catching up with the rest of the world in bond sales, taking advantage of an opportunity to raise money created by central bankers’ pledge to buy unlimited amounts of government debt. European bond sales reached 13.9 billion euros ($17.7 billion) yesterday, the most since May 6, 2009, pushing 2012 issuance to 516 billion euros, according to data compiled by Bloomberg.

CHINA: China’s stocks fell, dragging down the benchmark index by the most this month, on concern the economic slowdown is deepening after auto sales missed analysts’ estimates. The Shanghai Composite Index dropped 1.2 percent to 2,109.70 at 1:14 p.m., heading for the biggest decline since Aug. 27.

INDIA: Indian stocks swung between gains and losses before key economic data on factory production and inflation this week, and ahead of a ruling on Germany’s participation in a European bailout fund. The BSE India Sensitive Index, lost less than 0.1 percent to 17,761.36 at 11:46 a.m. in Mumbai, changing directions at least three times.

Bonds – Buying interests across the curve to open the new week on Monday. Takers remained in control of the bond market with this bullish trend in view all through the month.

Bills – Bills sold across the various tradable tenors on Monday, this is due to rising lending rates in the money market as liquidity level drops. Bearish outlook for the week on bills as we record more outflows in the cash market through WDAS auction.

Money Market – OBB and ON rate close at 14.00% and 14.25% respectively as liquidity thins out.

CBN CUT- OFF RATE – $/NGN 155.78

                            Hi                Low         Close        Prev.Close
USD/NGN   157.70/80    157.45/55   157.68/78   157.50/60

Interest rates
NIBOR (%)                     LIBOR (%)
O/N              14.1667          USD 1 month       0.2280
7 Day            14.6250         USD 2 month       0.3215
30 Day         15.2083         USD 3 month       0.4043
60 Day         15.6250         USD 4 month       0.5069
90 Day         15.8333         USD 6 month       0.6907
USD 12 month     1.0175
Y/Y Consumer Inflation July 2012 :                12.8%
FX Reserves: 4 September 2012 (USD bn)    39.848
MPR                                                                       12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

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