A Review of the Nigerian Energy Industry

Financial market update

13 December 2012, Sweetcrudereports, Lagos – Local and international financial market update.

Nigeria –  The Federation Accounts Allocation Committee (FAAC) on Wednesday logged NG161.59 billion to the Excess Crude Account (ECA) taking the balance up to USD9.66bn. The target set by the Accountant General of the Federation Mr Jonah Otunla was at USD10.0bn by the end of 2012.

USA – The FED moved further into unchartered policy territory when the Chairman tied the banks interest rate outlook to unemployment and inflation rates. In order to continue stimulating the economy, policy makers boosted their main stimulus tool by adding USD45bn of monthly Treasury purchases to an existing program where they buy USD40bn of mortgage backed debt a month.

EUROPE – The EU finance ministers agreed to put the ECB in charge of all euro area lenders in a deal that paves the way for the currency bloc’s firewall fund to provide direct bail out to banks.  The new supervisory body will be ready by March 01, with about 200 banks that would automatically qualify for direct ECB oversight.

INDIA – India is poised to raise at least USD1.1bn selling a stake in the nation’s biggest iron ore miner as it seeks to curb a budget deficit that’s puts its investment grade credit rating at risk.  The 10% sale of NMDC Ltd received bids for 1.73 times the 396.5mn shares on offer. The government expects to raise USD5.5bn by divesting assets.

Bonds – The rally continued again on Wednesday with yields dipping about 10bps on average. All the liquid securities are currently offered sub 12.00%. With the release of the auction circular for next week and the floating of up to N30 bio on the 16.39%, Jan 22s and the 16.00% Jun 19s we might see yields back up a bit but ultimately heading into 2013 we will see yields dip back below the 12.00% levels.

Bills – Rates were stable on Wednesday, only a few trades going through as market was relatively quiet.

Money Market – OBB and unsecured O/N rates are up at 13.25% and 13.50% as liquidity levels drop, OMO maturities of about 171billion are expected into the market tomorrow and so we will likely see the rates drop.

CBN WDAS – CBN offered and sold $180mio, with the marginal rate at 157.3277 [1% commission inclusive] which is a point higher than the previous cut-off.

Indicative Currency Exchange Rates
Bid           Offer

EURUSD       1.3086        1.3096
GBPUSD        1.6145         1.6155
USDJPY         83.63         84.03
USDCHF       0.9260       0.9280
GBPEUR       1.2337        1.2347
USDZAR       8.6457        8.7457
USDNGN      156.90        157.40
JPYNGN       1.8761         1.9261
CHFNGN      169.44        173.44
EURNGN      205.32       209.32
GBPNGN       253.32       257.32
ZARNGN       18.15          18.90

OPEC kept its production target unchanged for a second time this year as the group’s members judged prices are sufficiently high amid forecasts that supply  will outpace demand in 2013.

Interest rates
NIBOR (%)                     LIBOR (%)

O/N              13.8750         USD 1 month         0.2090
7 Day            14.1250         USD 2 month         0.2550
30 Day         14.3750         USD 3 month         0.3095
60 Day         14.6250         USD 6 month         0.5145
90 Day         14.8750         USD 12 month       0.8495
Y/Y Consumer Inflation October 2012 :            11.70%
FX Reserves: 30 November 2012 (USD bn)      44.47
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   157.80/90  157.38/48   157.70/80  157.40/50

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