A Review of the Nigerian Energy Industry

Financial market update

28 January 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Foreign-direct investment in Nigeria, Africa’s biggest oil producer, probably rose by 50 percent in 2012 and may increase the same rate this year, Trade and Industry Minister Olusegun Aganga said. FDI in West Africa’s biggest economy last year was “far more than the intake in 2011” of $8.9 billion, he said in an interview at the World Economic Forum in Davos, Switzerland Friday. The growth will be led by higher investment in non-oil industries, Aganga said.

EUROPE: Euro-area jobless data this week will expose the social cost of last year’s debt crisis and recession on southern European economies as unemployment across the region probably rose to a record in December. Unemployment in the 17-nation bloc climbed for a fifth month to 11.9 percent, according to the median of 34 economists in a Bloomberg News survey. That result due on Feb. 1 would show the highest jobless rate since records began in 1995.

UK: The pound fell for a third week against the euro, dropping to the least in more than a year, as data showed the U.K. economy shrank more than analysts forecast in the fourth quarter, tipping it back toward recession. The pound fell 1.5 percent in the week to 85.17 pence per euro, at 5 p.m. London time on Friday, after sliding to 85.37 pence, the lowest level since Dec. 12, 2011.

CHINA: China’s stocks rose, driving the benchmark index to the highest level in seven months, after industrial profits climbed for a fourth month in December. The Shanghai Composite Index rose 2.4 percent to 2,346.51, the highest close since June 1.

Bonds – The auction on Thursday was quite aggressively bid and the secondary market reflected this as yields dipped across board in Friday’s trading. With the markets set to remain liquid it is possible that we will see yields drop even further in the secondary market as offshore interest remains keen in addition to the expected local demand.

Bills – The bill auction was also very well bid and the rates at the primary also dipped to reflect the heavy demand brought about by the current liquidity in the system.

Money Market – OBB and unsecured O/N rates creeping up again on Friday another 25bps to 11.00% and 11.25% as the liquidity continues to thin out.

Indicative Currency Exchange Rates
Bid            Offer

EURUSD           1.3436          1.3446
GBPUSD            1.5724          1.5734
USDJPY              90.71            91.11
USDCHF            0.9281         0.9301
GBPEUR            1.1705           1.1715
USDZAR            8.9640         9.0640
USDNGN           156.95           157.70
JPYNGN             1.7302          1.7802
CHFNGN            169.11           173.11
EURNGN            210.88         214.88
GBPNGN             246.79         250.79
ZARNGN              17.51            19.51

Oil traded near the highest price in four months in New York after posting the longest run of weekly gains since April 2009, lifted by speculation that a global economic recovery will boost fuel demand. Crude for March delivery was at $96.04 a barrel, up 16 cents, in electronic trading on the New York Mercantile Exchange at 2:31 p.m. Singapore time.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N                11.1250         USD 1 month           0.2037
7 Day              11.6667         USD 2 month          0.2485
30 Day           12.0417         USD 3 month          0.3005
60 Day           12.5833         USD 4 month          0.3511
90 Day           13.0000        USD 6 month          0.4765
USD 12 month        0.7965
Y/Y Consumer Inflation December 2012 :        12.00%
FX Reserves: 23 January 2013 (USD bn)          45.425
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   157.08/18   157.20/30   157.35/45 

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