A Review of the Nigerian Energy Industry

Financial market update

17 January 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigerian Stock Exchange has unveiled six stock broking firms as Fixed Income Market Makers. This is in line with the planned introduction of retail bonds trading into the Nigerian capital market. According to the Exchange, the six broking firms selected out of 14 applications are Capital Bancorp; Cordros Capital; ESS/Dunn Loren Merrifield; FSDH Securities; Greenwich Securities and GTB Securities.

EUROPE: European Central Bank President Mario Draghi may prove too successful at bolstering confidence in the 17-nation euro. Europe’s common currency has climbed against 30 of its 31 most-traded peers since Draghi said in July that he would do “whatever it takes” to save the currency. Foreign investors are returning to markets they deserted in 2012, buying more than 60 percent of the 6 billion euros ($7.97 billion) of bonds Italy sold two days ago.

INDIA: Indian equities climbed as foreign investors added to their holdings of domestic shares for a 13th straight day. Automobile and software makers lead the advance. The BSE India Sensitive Index, or Sensex, rose 0.5 percent to 19,913.79 at 12:28 p.m. in Mumbai.

CHINA: China’s economy is set to exit a seven-quarter slowdown as the government rolls out infrastructure projects and limited inflation lets officials hold off from tightening monetary policy. The National Bureau of Statistics will report tomorrow that gross domestic product expanded 7.8 percent in the fourth quarter from a year earlier, according to the median estimate of 53 economists surveyed by Bloomberg News.

Bonds – Yields retraced yesterday after going up suddenly in trading Tuesday on the back of the release in the Q1 provisional calendar which signified a sizeable increase in issuance size. Yields came off as some market players look towards a possibly reduction in the standing deposit facility rate when the MPC meets next week.

Bills – Continued bullish run in the markets on Wednesday with rates dipping an average 35-40bps as the market aims to position ahead of any likely policy changes when then MPC meets early next week. No OMO activity yesterday as liquidity levels have dipped significantly.

Money Market – OBB and unsecured O/N rates up another 100bps yesterday to close at 14.25% and 14.50%. Liquidity levels dipping on the back of the OMO activity of the CBN.

CBN WDAS: CBN offered $120mio and sold $108.48mio and maintained the marginal rate at 157.2772 [1% commission incl.]

Indicative Currency Exchange Rates
                          Bid           Offer
EURUSD        1.3286        1.3296
GBPUSD        1.5995         1.6005
USDJPY          88.57          88.97
USDCHF        0.9340        0.9360
GBPEUR        1.2040         1.2050
USDZAR         8.7912         8.8912
USDNGN        157.23          157.98
JPYNGN         1.7752          1.8252
CHFNGN        168.34         172.34
EURNGN        208.90        212.90
GBPNGN         251.49         255.49
ZARNGN         17.88           19.88

Oil fell in New York as investors speculated a rally to the highest level in four months was exaggerated amid concern the global economic recovery may falter, curbing fuel demand. Crude for February delivery declined as much as 44 cents to $93.80 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.83 at 1:12 p.m. Singapore time.

Interest rates
NIBOR (%)                         LIBOR (%)
O/N              14.6250             USD 1 month           0.2057
7 Day            14.8333             USD 2 month           0.2500
30 Day         15.1667               USD 3 month          0.3030
60 Day         15.4583              USD 4 month          0.3541
90 Day         15.7083              USD 6 month          0.4875
USD 12 month        0.8095
Y/Y Consumer Inflation November 2012 :             12.3%
FX Reserves: 10 January 2013 (USD bn)                44.678
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  157.45/55   156.98/08   157.18/28   157.05/15


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