A Review of the Nigerian Energy Industry

Financial market update

08 November 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigeria – The Secondary market trading of government and corporate bonds on the NSE will receive a boost in 2013 following efforts by the Securities and Exchange Commission (SEC) in that direction. The Director-General of the SEC, Ms. Arunma Oteh, has disclosed that the Fixed Income Sub-committee of the Capital Market Committee (CMC) set up by the commission last year, is collaborating with other stakeholders to ensure that trading in bonds on the exchange is achieved next year

Asia – Asian stocks slid the most in six weeks and the yen advanced as President Barack Obama’s re-election set up a showdown to avert the so0called fiscal cliff. The president now faces negotiations to avoid more than USD600 billion of automatic tax increases and spending cuts while anti austerity protest in Greece and weaker economic data in Asia added to concerns global growth may slow.

EUROPE – Greek Prime Minister Antonis Samaras mustered the support of enough lawmakers to secure approval of austerity measures needed to unlock bailout funds, after more than 50,000 protestors ringed parliament. Parliament will convene again on Nov 11 to vote on the 2013 budget a day before euro area finance ministers meet to discuss whether to unlock the USD31 billion bailout Greece is expecting to receive following the passing of the latest round of austerity measures.

Bonds – Yields came off again yesterday as the market attempts to find new levels on the back of varying interpretations of the addition of LCY bond to Barclays’ emerging markets index. Though the exact size of the flow is hard to ascertain at this point, the market is going ahead to buy ahead of whatever demand might come in.

Bills – Relatively quiet markets yesterday ahead of the auction results. Most of the demand went into the primary.

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

CBN WDAS: offered and sold $50mio, lowest intervention rate is 157.2974 (1% inclusive) and 12 banks bid. Rate had been maintained for the last 4 auctions now.

Indicative Currency Exchange Rates
Bid           Offer
EURUSD              1.2764         1.2774
GBPUSD              1.5985         1.5995
USDJPY                 79.90         80.30
USDCHF              0.9448       0.9468
GBPEUR              1.2523         1.2533
USDZAR              8.6341         8.7341
USDNGN             157.45          157.95
JPYNGN              1.9706          2.0206
CHFNGN             166.65          170.65
EURNGN             200.97         204.97
GBPNGN             251.68          255.68
ZARNGN                18.24           20.24

U.S. oil production rose to the highest in almost 18 years as a shale drilling boom cut reliance on foreign fuel and nudged the country closer to energy independence. In the latest DOE report, output swelled by 8kb to 6.68mbopd in the week ended Nov. 2. The U.S. met 83% of its energy needs in first six months of 2012, on track to be the highest annual level since 1991

Interest rates
NIBOR (%)                       LIBOR (%)
O/N               12.0000         USD 1 month          0.2090
7 Day             12.8333          USD 2 month         0.2595
30 Day          13.8500          USD 3 month         0.3100
60 Day          14.2000         USD 6 month          0.5295
90 Day          14.8333          USD 12 month        0.8660
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  157.50/60  157.10/20  157.35/45  157.10/20

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