A Review of the Nigerian Energy Industry

Financial market update

07 November 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigeria – Oscar Onyema CEO Nigerian Stock Exchange has said the current market rally and improved regulation could lure up to 20 companies to list on the Nigerian bourse in 2013. Since 2009 there have been only a handful of small listings compared to 88 listings between 2006 and 2008. The ASI is up 18% year to date and so is corporate sentiment about coming to market. NSE Market Capitalization currently stands at NGN 8.476 trillion.

USA – Barack Obama, the post partisan candidate of hope four years ago won re-election by overcoming four years of economic discontent with a mix of political populism and electoral math. It is expected that with Obama winning the FED would continue to carry out current monetary policy which is targeted to keep rates low over the coming years. The market has pushed US treasuries lower.

CURRENCY – The USD weakened on speculation President Obama’s re-election victory will boost chances the US will continue monetary stimulus policies that end to weaken the currency. Monetary policy is expected to remain loose under Obama but could change as the US faces the “fiscal cliff’ starting Jan 2013.

EUROPE – In Greece the 238 pages of austerity measures raging from raising the retirement age two years to 67 to eliminating Christmas and holiday payments for pensioners will be debated in the 300 seat parliament from 10 am with voting scheduled for 8 pm today. Approval for the legislation is required by Nov 12 to unlock a USD40 billion portion of international aid. Greek Prime Minister Antonis Samaras must stem defections from his three party coalition to convince European Union that his government is serious about staying in the euro and implementing reforms.

Bonds – A rally yesterday fuelled by the news of Barclays addition of LCY to their emerging markets index. Though the exact size of the flow on the back of this is projected to be quite minimal, the market still took this opportunity to create some activity with yields dipping across the board.

Bills – Markets were relatively quiet, most market participants looking to the auction which comes up today.

Money Market – OBB and unsecured O/N rates at 11.50% & 11.75% to close today.”

Indicative Currency Exchange Rates
Bid             Offer

EURUSD             1.2857            1.2867
GBPUSD             1.6030            1.6040
USDJPY              80.11               80.51
USDCHF             0.9398           0.9418
GBPEUR             1.2462            1.2472
USDZAR             8.6142            8.7142
USDNGN            157.30            157.80
JPYNGN             1.9636            2.0136
CHFNGN           167.38             171.38
EURNGN           202.24            206.24
GBPNGN            252.15             256.15
ZARNGN           18.26               20.26

The market endured spurts of rallies during the London and NY trader hours, but few expected Brent to reach the $110/bbl levels seen after the London window. This comes despite no fundamental news, and the Euro zone PMI showing a more
bearish number of 45.7 for Oct, the lowest since Jun’09.Brent is trading $110.60 this morning

Interest rates
NIBOR (%)                    LIBOR (%)

O/N              12.0417        USD 1 month          0.2090
7 Day            13.0417        USD 2 month          0.2595
30 Day         14.4167        USD 3 month          0.3118
60 Day         14.8100       USD 6 month          0.5335
90 Day         15.3250       USD 12 month         0.8715
Y/Y Consumer Inflation September 2012 :      11.3%
FX Reserves: 31( October 2012 (USD bn)         42.67
MPR                                                                          12.00%
Source: Reuters Guardian, Bloomberg, Central Bank of Nigeria,
Financial Market Dealers Association Standard Chartered Bank Nigeria

                            Hi              Low           Close       Prev.Close
USD/NGN   157.30/40   156.85/95   157.10/20   157.30/40

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