A Review of the Nigerian Energy Industry

Financial market update

17 October 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigerian Foreign Exchange- Yesterday’s interbank- Open: 157.40/50; High: 157.70/80; Low: 157.38/48; Close: 157.45/55. This uptick has been fuelled mainly by the CBN Governor’s comments over the weekend with regards to the CBN likely to stop the sale of FX cash to the Forex bureaux and the fact that flows from offshore players remains mild leading up to today’s bond auction.

Nigerian Bonds – Relatively flat yield curve from today’s session, trading activities should pick up right after the bond auction based on new cut-off levels which market will trade from.

Nigerian Treasury Bills – Light demand recorded on short-dated bills in today’s session just in early reaction to approved monthly FAAC funds. The CBN remains quiet so far this week with no OMO issuance which had subdued all secondary market demand last week.

EUR: The dollar index fell to its lowest in a month on Wednesday hurt by its losses against the Euro which rose after Moody’s Investors services affirmed Spain’s Baa3 rating. The Euro was up 0.5 percent on the day at $1.3112, having struck a one month high of $ 1.3125 earlier on trading platform EBS

ZAR – South Africa’s Rand firmed to its strongest level in three days against the dollar after Moody’s rating agency affirmed Spain’s investment grade rating, calming fears that Madrid will be downgraded to Junk status. However, the rand is likely to have its gains capped as investors worry about the domestic labour unrest that has plagued South Africa since August.

CNH: The Yuan set another record opening at its highest level since the domestic market was created in 1994, as US presidential candidates debated over who would be tougher on China, long accused of undervaluing its currency to help exporters. Before the market opened, the people’s bank of China( PBOC) set the yuan’s midpoint at 6.3028 to the dollar, the highest fixing since late June. The midpoint has climbed steadily since markets reopened after a holiday week in the first week of October.

Indicative Currency Exchange Rates
                                Bid           Offer
EURUSD             1.3085         1.3115
GBPUSD              1.6100         1.6140
USDJPY                78.50          79.00
USDCHF              0.9230        0.9260
GBPEUR              1.2290         1.2320
USDZAR              8.6800        8.6900
USDNGN             157.15          157.65
JPYNGN              1.9890         2.0090
CHFNGN             169.50         171.20
EURNGN             204.50        208.50
GBPNGN             251.50          255.50
ZARNGN             17.00            19.00

Brent futures held steady above $114 on Wednesday on hopes of a revival in oil demand growth as a European union member was spared a rating down grade, while
simmering tension in the Middle east proved additional support. Brent gained 10 cents to $114.08 a barrel by 0701GMT. The November Contract which expired on
Tuesday, went off the board 73 cents lower at $115.07, while the December one settled 40 cents lower at $114.00.

Interest rates
NIBOR (%)                             LIBOR (%)
O/N              14.0000                USD 1 month          0.21320
7 Day            14.4167                  USD 2 month         0.26700
30 Day         15.1250                  USD 3 month         0.32475
60 Day         15.4583                  USD 4 month         0.40710
90 Day         16.1250                  USD 6 month         0.57840
USD 12 month        0.91800
Y/Y Consumer Inflation September 2012 :                 11.3%
FX Reserves: 10 October 2012 (USD bn)                     41.60
MPR                                                                                     12.00%
Source: Reuters Guardian, Bloomberg, Central Bank of Nigeria,
Financial Market Dealers Association Standard Chartered Bank Nigeria


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