A Review of the Nigerian Energy Industry

Financial market update

20 December 2012, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The National Assembly has unanimously adopted a $79 per barrel oil price benchmark, as against $75 per barrel recommended in the 2013 budget proposal sent to the lawmakers by President Goodluck Jonathan. The new price benchmark and crude oil production target adds approximately N587bn to the Federal Government projected revenues in 2013, cutting the budget deficit by half. Analysts have however warned that the higher benchmark would expose the nation to the downside risk in crude oil prices. [BusinessDay]

USA : The number of building applications issued in November rose to a four year high as sing the US housing market recover will extend into 2013. Permits a proxy for future construction climbed 3.6% to an 899,000 annual rate. The most since July 2008. The average growth rate from Sep-Nov has was the strongest since the three months ended Aug 2008.

CHINA : Expectations are building for China to raise interest rates from the second half of 2013 as a brightening outlook for Asia’s biggest economy. The PBOC will boost its one year deposit rate of 3% by at least 0.25% next year according to 9 out of 23 economists surveyed by BBG. 6 of 22 predicted an increase in Nov poll. The benchmark 2 year bond yield has risen 78bps since Jun to 3.13% and set for a six month climb that is the longest since at least 2007.

Bonds – A bit of a sell off to open market on Wednesday though the trend turned very quickly and yields dipped especially on the 15.10% APR 2017s as the market anticipated it will close lower at the auction.

Bills – Quiet markets, some buying interest on the short dated bills around 91 days.

Money Market – OBB and unsecured O/N rates dipped further today to 10.00% and 10.25% as the market remained liquid from the inflow received from FAAC on Tuesday

WDAS : CBN offered and sold $300mio, lowest intervention rate 157.3277 (1% inclusive), they maintained the rate from last 2 auctions. 19 banks bided.

Indicative Currency Exchange Rates
                         Bid          Offer
EURUSD       1.3224       1.3234
GBPUSD        1.6259       1.6269
USDJPY          84.15         84.55
USDCHF        0.9131       0.9151
GBPEUR         1.2294      1.2304
USDZAR        8.4903      8.5903
USDNGN       157.78       158.53
JPYNGN        1.8750       1.9250
CHFNGN       172.80       176.80
EURNGN       208.65       212.65
GBPNGN        256.53       260.53
ZARNGN         18.58        19.33

Oil rallied higher overnight to close at $110.36 on Brent and $89.51 on WTI after DOE reports showed refinery rates last week rose to the highest level in four months.

Interest rates
NIBOR (%)                    LIBOR (%)

O/N              10.5000       USD 1 month           0.2107
7 Day            10.9583       USD 3 month           0.3100
30 Day         12.0833       USD 4 month           0.3631
60 Day         12.4583        USD 6 month           0.5098
90 Day         12.8750        USD 12 month         0.8430
Y/Y Consumer Inflation November 2012 :          12.3%
FX Reserves: 11 December 2012 (USD bn)         44.567
MPR                                                                            12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

                             Hi            Low           Close          Prev.Close
USD/NGN  158.20/30   157.80/90   157.80/90   157.98/08

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