A Review of the Nigerian Energy Industry

Financial market update

14 January 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigerian interbank lending rates rose by about 100 basis points this week, to an average of 12.5 per cent, as dollar sales by the state-owned energy firm NNPC and treasury bills sapped naira liquidity.

EUROPE: European leaders declaring they’ve gained the upper hand in the three-year-old debt crisis are sharpening efforts to channel a rebound in financial markets to an economic recovery to chip away at soaring unemployment. Even as euro-area chiefs call for more time to lock in a bailout package for Cyprus and elections loom next month in Italy, German Finance Minister Wolfgang Schaeuble said Jan. 11 that the single currency is “over the worst of the crisis.”

INDIA: Indian stocks rose to a two-year high, led by banks and technology shares, after lower-than- estimated government inflation data boosted speculation the central bank will cut interest rates. The BSE India Sensitive Index, or Sensex, climbed 0.8 percent to 19,822.35 at 12:50 p.m. Mumbai time, poised for the highest close since Jan. 6, 2011.

CHINA: China’s unexpected surge in exports last month renewed concern from some analysts that statistics from the nation can be unreliable. The 14.1 percent jump from a year earlier was the biggest positive surprise since March 2011, according to data compiled by Bloomberg. The increase didn’t match goods movements through ports and imports by trading partners according to UBS, while Goldman Sachs and Mizuho Securities Asia Ltd. cited a divergence from overseas orders in a manufacturing index.

Bonds – Quiet session at the end of the week, yields stayed relatively flat on Friday. Demand still exists and activity should pick up in the new week.

Bills – Bills bought in Friday’s session as OMO issuance seem to be reducing and cash markets remain liquid.

Money Market – OBB and O/N rate close the week at 12.25% and 12.50% respectively.

Indicative Currency Exchange Rates
                       Bid         Offer
EURUSD      1.3365      1.3375
GBPUSD       1.6131       1.6141
USDJPY         89.36       89.76
USDCHF       0.9138      0.9158
GBPEUR       1.2068      1.2078
USDZAR       8.7244      8.8244
USDNGN      155.95       156.45
JPYNGN        1.7452       1.7952
CHFNGN       170.66      174.66
EURNGN       208.43      212.43
GBPNGN        251.56      255.56
ZARNGN        17.88        19.88

Crude for February delivery rose as much as 71 cents to $94.27 a barrel and was at $94.22 in electronic trading on the New York Mercantile Exchange at 2:31 p.m. Singapore time.

Interest rates
NIBOR (%)                   LIBOR (%)
O/N              12.6250      USD 1 month            0.2057
7 Day            12.9583      USD 2 month            0.2510
30 Day          13.6250      USD 3 month            0.3040
60 Day          13.8333       USD 4 month           0.3561
90 Day          14.2500       USD 6 month          0.4960
USD 12 month         0.8210
Y/Y Consumer Inflation November 2012 :       12.3%
FX Reserves: 08 January 2013 (USD bn)          44.653
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  156.45/55   156.10/20   156.20/30   156.13/23

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