A Review of the Nigerian Energy Industry

Financial market update

09 January 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s foreign trade improved sharply in the second quarter of 2012 with $12 billion surplus occasioned by 42 per cent decline in imports. The surplus represents 43 per cent increase when compared with the surplus of N8.62 billion recorded in the second quarter of the year. The Central Bank of Nigeria (CBN) disclosed this in its External Sector report for the quarter posted on its website, yesterday.

EUROPE: European stock futures advanced, indicating the Stoxx Europe 600 Index will gain for the first time in three days, as Alcoa Inc. began the U.S. earnings season by posting sales that beat estimates and investors awaited German industrial-output data. Futures on the Euro Stoxx 50 Index expiring this month rose 0.3 percent to 2,693 at 7:05 a.m. in London.

INDIA: India’s automakers’ association lowered its full-year domestic car sales forecast for the third time in six months as slowing economic growth and high interest rates continue to keep buyers from showrooms. Local deliveries in December fell 13 percent to 141,083 cars, the second consecutive monthly decline, the group said.

CHINA: China’s bank loans as a share of funding in the economy may have fallen to a record low, highlighting the growth of alternative financing channels that have prompted warnings of rising credit risks. New yuan loans probably dropped 14 percent last month from a year earlier, according to the median projection in a Bloomberg News survey of 37 analysts ahead of data due by Jan. 15.

Bonds – The profit takers were out yesterday selling across the curve as some rumors crept in of an increase in issuance size coming at this month’s bond auction. Some market players had already began to question the rapid dip in yields and this gave them the courage to cut some positions. Market is expected to remain volatile until the calendar comes out and in the aftermath as market trades the information.

Bills – Some light buying in the secondary market yesterday. No OMO activity for the first time this year as liquidity levels drop. First primary auction for the year comes up today.

Money Market – OBB and unsecured O/N rates up about to close at 12.00% and 12.25% as liquidity levels dip on the back of all the OMO activity.

Indicative Currency Exchange Rates
                                 Bid             Offer
EURUSD              1.3080           1.3090
GBPUSD               1.6047           1.6057
USDJPY                87.51             87.91
USDCHF               0.9240         0.9260
GBPEUR               1.2268          1.2278
USDZAR              8.5799           8.6799
USDNGN             156.20           156.70
JPYNGN              1.7849           1.8349
CHFNGN            169.05            173.05
EURNGN             204.31          208.31
GBPNGN             250.65          254.65
ZARNGN               18.21            20.21

Oil fluctuated in New York after an industry report showed rising stockpiles in the U.S., the world’s biggest crude-consuming nation. Crude for February delivery
was at $93.04 a barrel, down 11 cents, in electronic trading on the New York Mercantile Exchange at 2:45 p.m. Singapore time.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N              12.2083         USD 1 month            0.2077
7 Day            12.7500         USD 2 month            0.2520
30 Day         13.5833         USD 3 month            0.3050
60 Day         14.1250          USD 4 month           0.3601
90 Day         14.3750          USD 6 month           0.5003
USD 12 month         0.8345
Y/Y Consumer Inflation November 2012 :           12.3%
FX Reserves: 07 January 2013 (USD bn)              44.612
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   157.00/10   156.35/45   156.40/50    156.95/05

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