A Review of the Nigerian Energy Industry

Financial market update

23 November 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigeria – The preferred bidders for the country’s power generation and distribution firms are expected to take control of the companies between June and July next year according to the Bureau of Public Enterprises (BPE). The BPE plans to start negotiations with the five preferred bidders for the generation companies and 10 for the distribution companies from the first week of December to January 2013, after which the process of transferring the companies to the bidders will commence proper

Europe – Divisions between rich and poor countries flared over the EU’s next seven year budget leading German Chancellor Angela Merkel to rule out an accord until the new year. France defended farm subsidies, Britain clung to a rebate and Denmark demanded its own refund while countries in eastern and southern Europe said reduced financing for public-works project would condemn their economies to lag behind the wealthier north.

USA – More Americans this month said the world’s largest economy will improve than at any time in the past decade led by a surge among Democrats following the re-election of President Obama. Rising home values, job growth and falling gasoline prices are shorting up household finances as retailers prepare for the holiday shopping season. Improved consumer spending is expected to sustain the expansion as lawmakers strive to avoid the so called fiscal cliff of tax increases and spending cuts

Bonds – Yesterday was marked with profit taking as yields went up to close the day. The session started with buying across the curve and yields looked set to dip but the profit taking which had dominated most of this week’s trading came out in force to push yields above the previous day’s closing levels

Bills – The Central bank came out to mop up the excess liquidity by selling N101bio in 84day and 145bio in 98 day OMO bills selling in excess of the offered amount. Rates came off in the secondary market as the liquidity put downward pressure on rates.

Money Market – OBB and unsecured O/N rates held stable again today at 10.00% & 10.25%, the market still liquid from the FAAC flows which hit the system on Wednesday but after the OMO we will likely see rates trend upward.

Indicative Currency Exchange Rates
Bid           Offer

EURUSD           1.2889         1.2899
GBPUSD           1.5951           1.5961
USDJPY            82.25            82.65
USDCHF           0.9344         0.9364
GBPEUR           1.2376          1.2386
USDZAR           8.9224         9.0224
USDNGN          157.65           158.15
JPYNGN           1.9167           1.9667
CHFNGN          168.72          172.72
EURNGN          203.20         207.20
GBPNGN          251.47           255.47
ZARNGN          17.67             19.67

Oil continues third weekly gain amidst concerns on  threat to Middle East supplies and falling US crude stockpiles. No settlement for WTI yesterday due to Thanksgiving holiday but it was trading at $87.10/bbl (- $0.28), while Brent settled at $110.55/bbl (-$0.31) with the WTI-Brent benchmark premium at $23.17.

Interest rates
NIBOR (%)                    LIBOR (%)
O/N              10.5000       USD 1 month         0.2075
7 Day            10.8333        USD 2 month        0.2570
30 Day         11.9167          USD 3 month        0.3115
60 Day         12.4167         USD 6 month        0.5270
90 Day         13.0000        USD 12 month      0.8610
Y/Y Consumer Inflation September 2012 :     11.30%
FX Reserves: 15 November 2012 (USD bn)     43.37
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  157.67/77  157.25/35   157.45/55   157.60/70

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