A Review of the Nigerian Energy Industry

Financial market update

08 January 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: OANDO Plc has concluded plans to raise N54.6 billion from the capital market by way of a rights issue. They plan to issue 4,548,236,276 ordinary shares of 50 kobo at N12.00 per share.

EUROPE: European investor confidence increased for a fifth month in January as signs that the region’s debt crisis is easing multiplied, the Sentix research institute said yesterday. The European Central Bank’s pledge last year to buy unlimited government bonds of countries signing up to reform plans has damped expectations that the euro area would break up. Since then, Greece has secured further aid needed to prevent default and the region’s leaders have agreed a plan for greater financial-market coordination.

INDIA: India’s rupee will rise at least 10 percent in 2013, its biggest gain in six years, as central bank interest-rate cuts spur growth in Asia’s third-largest economy, according to the most-accurate forecaster. Dollar-based investors will earn 14.9 percent, including interest income, from holding rupees this year, based on the median estimate in a Bloomberg survey and prevailing deposit rates.

CHINA: Most Chinese stocks rose, led by industries that have underperformed during a bull-market rally for the CSI 300 Index such as health-care, technology and consumer staples. The Shanghai Composite Index lost 0.3 percent to 2,279.53 at 1:08 p.m., even as about two stocks rose for each one that fell.

Bonds – Yield direction stays one directional as yields continued to dip yesterday. The buying is being met by some mild profit taking but we are sure to crash through 11.00% across board, with the floor uncertain at this point though we might see some more aggressive profit taking should we begin to tough the 10.50% levels.

Bills – A relatively quiet secondary market yesterday as the CBN came out again yesterday to offer N100billion in 101 & 129 day bills as they are keeping up with their mop up activity. The CBN sold a total of N133.84billion at 13.25% on the 101day and 13.274% on the 129day.

Money Market – OBB and unsecured O/N rates up about 25bps to 11.25% and 11.50% respectively as the OMO auctions reduced liquidity levels to close last week.

Indicative Currency Exchange Rates
                       Bid         Offer
EURUSD    1.3110        1.3120
GBPUSD     1.6085      1.6095
USDJPY       87.44        87.84
USDCHF    0.9220      0.9240
GBPEUR    1.2269       1.2279
USDZAR    8.5879       8.6879
USDNGN   156.80       157.30
JPYNGN    1.7932        1.8432
CHFNGN   170.07       174.07
EURNGN   205.56      209.56
GBPNGN    252.21      256.21
ZARNGN     18.26        20.26

Oil traded near the highest level in almost four months in New York before a government report that may show refinery utilization rose and stockpiles increased in the U.S., the world’s biggest crude-consuming nation. Crude for February delivery was at $93.08 a barrel, down 11 cents, in electronic trading on the New York Mercantile Exchange at 2:57 p.m. Singapore time.

Interest rates
NIBOR (%)                  LIBOR (%)

O/N              11.3750      USD 1 month       0.2077
7 Day            11.9167      USD 2 month       0.2525
30 Day         13.2500     USD 3 month       0.3050
60 Day         13.6250     USD 4 month       0.3601
90 Day         14.0417      USD 6 month       0.5003
USD 12 month     0.8345
Y/Y Consumer Inflation August 2012 :        12.3%
FX Reserves: 04 January 2013 (USD bn)    44.497
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 157.60/70   156.95/05   156.95/05   157.20/30

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