A Review of the Nigerian Energy Industry

Financial market update

12 November 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigeria – As the Nigerian Stock Exchange scrambles to regain the ground it lost after the correction seen in equities in 2008, Nigerian groups are also being tempted by London’s broad investor base and liquidity. The London Stock Exchange is actively looking to add Nigerian companies to its roster and is in discussions with its Nigerian counterpart to simplify the dual listings process, allowing immediate trading and settling of securities in both markets.

China – China’s new yuan loans unexpectedly fell in October from a year earliest damping sings the worlds second biggest economy is recovering after a seven quarter slowdown. Banks extended 505.2 billion yuan of local currency loans which is 14% less than a year earlier stated the Peoples Bank of China.

Europe – European Finance Chiefs will see a program to maintain Greek solvency today after the country’s parliament approved a raft of austerity measures, even as the currency union confronts the prospects of a worsening economy. Finance ministers will meet from the 17 member group in Brussels, following the Nov, 8 agreement by Greek lawmakers to make cuts in pensions and benefits.

India – Indian industrial production unexpectedly fell in September adding to signs that Asia’s third largest economy is struggling. Factory output has been subdued for most of this year hurt by moderating consumer demand and a drop in exports as the global recovery falters. The RBI has signaled that it may lower rates in the first quarter of 2013 after resisting calls from the Finance Ministry for a cut last month to back a growth push

Bonds – After a week of rates heading south profit takers came out on Friday to push yields up somewhat. Yields are likely to dip again opening this week but we might see the swings return ahead of the bond auction which comes up on the 21st.

Bills – Another OMO offering on Friday with the Central bank selling in excess of the published offer as they aim to mop up the excess liquidity in the markets. The central bank is keeping the OMO offerings short dated offering 83 and 76 days at 13.94% on average. The demand which would normally go into the secondary market is largely being held back and pushed in the OMO auctions.

Indicative Currency Exchange Rates
Bid            Offer

EURUSD         1.2729          1.2739
GBPUSD         1.5912           1.5922
USDJPY           79.48            79.88
USDCHF         0.9475          0.9495
GBPEUR         1.2499           1.2509
USDZAR         8.6852          8.7852
USDNGN        157.40           157.90
JPYNGN         1.9804           2.0304
CHFNGN        166.12            170.12
EURNGN        200.35          204.35
GBPNGN         250.45         254.45
ZARNGN         18.12            20.12

Oil in New York fluctuated after its first weekly gain in a month as signs that an improving economic outlook in China and the US countered concerns that a contraction in Japan will curb demand. Brent for December settlement was at USD109.34 per barrel down 6 cents on the London based ICE Futures. The European benchmark contract was at a premium of USD22.97 to WTI.

Interest rates
NIBOR (%)                   LIBOR (%)

O/N               10.8333     USD 1 month          0.2090
7 Day             11.1250      USD 2 month          0.2595
30 Day          12.2083     USD 3 month          0.3100
60 Day          12.5833     USD 6 month          0.5265
90 Day          13.2500     USD 12 month        0.8620
Y/Y Consumer Inflation September 2012 :     11.3%
FX Reserves: 11 November 2012 (USD bn)     42.72
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   157.70/80  157.25/35   157.45/55   157.3545

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    Financial market update.