A Review of the Nigerian Energy Industry

Financial market update

27 September 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Federal Government will earn a handsome $707 million from the expected sale of five power plants, for which bidders were announced on Tuesday. Atedo Peterside, Chairman, Technical Committee, National Council on Privatisation, NCP, who announced the seven preferred bidders for the five power generation plants, said the owners of the firms and operators are some of the world’s largest and most efficient electricity thermal and hydro generating companies. Eight firms bidded for the generation companies.

EUROPE: The European Commission sought on Wednesday to ease concerns that some governments have about using the euro zone’s bailout fund to recapitalize ailing banks directly, a longstanding Spanish request. Olivier Bailly, a spokesman for the commission, said he “took note” of the conclusions from a meeting Tuesday of finance ministers from three euro zone countries — Germany, the Netherlands and Finland — that prompted questions about the commitment, which was made by European officials at a meeting in June.

CHINA: China’s stocks jumped the most in three weeks on speculation the government will announce measures to bolster the equities market after the Shanghai Composite Index fell below the 2,000 level yesterday. The Shanghai Composite rallied as much as 3.2 percent after the Shanghai Securities News reported there is market speculation the China Securities Regulatory Commission will announce 10 market-boosting measures at a briefing later today. The Shanghai index pared gains to 2.5 percent at 2:59 p.m.

INDIA: Indian stocks advanced the most in a week as foreign funds added to their holdings on expectation the government will extend policy measures to boost growth. The BSE India Sensitive Index, or Sensex, rose 0.4 percent to 18,702.85 at 12:28 p.m. in Mumbai.

Bonds – Bond yields recovered for the second straight session on Wednesday on the news of increased weighting of Nigerian bonds in the JPM GBI-EM index to 0.72 percent from 0.59 percent. Offshore demand however remains weak.

Bills – Takers session on Wednesday due to the size on offer at yesterday’s auction and low volume sold at the OMO auction. Results out around current market levels, hence we do not expect any intensive buying in the market today.

Money Market – OBB and O/N down to 10.50% and 10.75% respectively, additional inflow of ngn57 bio expected in the system today after funding for yesterday’s auction.

CBN CUT- OFF RATE – $/NGN 155.78

                           Hi              Low         Close          Prev.Close
USD/NGN  157.65/76   157.28/38   157.30/40   157.65/75

Interest rates
NIBOR (%)                        LIBOR (%)

O/N              10.5000           USD 1 month              0.2155
7 Day            10.9167            USD 2 month              0.2948
30 Day         11.6667             USD 3 month             0.3623
60 Day         12.0417             USD 4 month             0.4636
90 Day         12.7083            USD 6 month             0.6429
USD 12 month           0.9750
Y/Y Consumer Inflation July 2012 :                         12.8%
FX Reserves: 25 September 2012 (USD bn)           41.099
MPR                                                                                 12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

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