A Review of the Nigerian Energy Industry

Financial market update

03 October 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: President Goodluck Jonathan says Nigeria’s Gross Domestic Product (GDP), driven mainly by non-oil sector, has grown by 7.1 per cent, while the economy attracted N6.8 trillion investments in nine months. Jonathan, who disclosed this in his 52nd Independence Anniversary broadcast on Monday, said that Nigeria recorded this feat in spite of the global financial crisis.

EUROPE: European stocks declined after Spanish Prime Minister Mariano Rajoy denied immediate plans to ask for a bailout and a report showed China’s services industry expanded at the weakest pace in at least 19 months. The Stoxx Europe 600 Index fell 0.4 percent to 270.54 at 8:05 a.m. in London. The benchmark gauge has still rallied 16 percent from this year’s low on June 4 as European Central Bank policy makers agreed on an unlimited asset-purchase program and the Federal Reserve announced a third round of quantitative easing.

UK: The pound weakened against the dollar before a report analysts said will show an index of U.K. services expanded for the 21st consecutive month in September. The pound declined 0.1 percent to $1.6116 as of 7:53 a.m. London time, after touching $1.6102, the lowest since Sept. 13. The pound has strengthened 0.6 percent in the past three months, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies.

CHINA: China’s services industry expanded the least in more than a year, underscoring a slowdown that spurred the Asian Development Bank to lower its 2012 regional growth estimate and caused a slide in Australian coal exports. The purchasing managers’ index from the Chinese government and logistics federation fell to 53.7 in September from 56.3 the previous month, a report showed today.

Bonds – Light run across the curve early in the session yesterday by takers, relatively calm session for the rest of the day. Liquidity levels to play a key role later in the week as offshore interest seem to slow down.

Bills – Short-tenored bills up for sale in Tuesday’s session. This was expected due to sell-off on existing stock to access higher yield at the OMO auction, another auction conducted yesterday where ngn79.87 bio was sold out of the ngn100 bio offered.

Money Market – OBB and O/N rate close at 10.50%. Liquidity mop-up continues via OMO bill issuance.

Indicative Currency Exchange Rates
                              Bid          Offer
EURUSD             1.2909      1.2919
GBPUSD              1.6106      1.6116
USDJPY                78.18        78.58
USDCHF              0.9375      0.9395
GBPEUR              1.2475       1.2485
USDZAR               8.4233      8.5233
USDNGN              157.30      157.80
JPYNGN                2.0120     2.0620
CHFNGN              167.79       171.79
EURNGN              203.06     207.06
GBPNGN               253.35      257.35
ZARNGN               18.67 20.67

Oil dropped for a second day after U.S. crude stockpiles climbed for a
fourth week and a measure of China’s economy declined, signalling
fuel demand may be faltering in the world’s biggest users of the
commodity. Crude for November delivery slid as much as 46 cents to
$91.43 a barrel in electronic trading on the New York Mercantile
Exchange and was at $91.44 at 2:33 p.m. Singapore time.

Interest rates
NIBOR (%)                       LIBOR (%)
O/N              10.7500            USD 1 month            0.2145
7 Day            11.4167              USD 2 month           0.2855
30 Day         13.2500             USD 3 month           0.3540
60 Day         13.7500             USD 4 month           0.4486
90 Day         14.0417              USD 6 month           0.6259
USD 12 month         0.9615
Y/Y Consumer Inflation August 2012 :                   11.7%
FX Reserves: 28 September 2012 (USD bn)          41.186
MPR                                                                                12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

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