A Review of the Nigerian Energy Industry

Financial market update

31 January 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigerian President Goodluck Jonathan approved the transfer of $1 billion from oil-revenue savings to be shared by the country’s 36 states and federal government. The funds will be used to implement “people-oriented projects,” Rivers state Governor Rotimi Amaechi, who is also chairman of the Nigerian Governors Forum, said yesterday in an e- mailed statement from the capital, Abuja. Nigeria, Africa’s largest oil producer, relies on crude exports for about 95 percent of its foreign-currency earnings and 80 percent of government revenue, according to the Finance Ministry. The Excess Crude Account currently has $9.2 billion, Amaechi said.

EUROPE: Economic confidence in the euro area rose more than economists forecast in January, adding to signs that the 17-nation currency bloc may be emerging from a recession. An index of executive and consumer sentiment rose to 89.2 from a revised 87.8 in December, the European Commission in Brussels said yesterday. That’s the highest since June.

INDIA: India’s rupee headed for its first monthly gain since September as policy makers’ steps to boost growth and improve public finances attracted capital. The rupee advanced 3.4 percent this month to 53.18 per dollar as of 9:58 a.m. in Mumbai, according to data compiled by Bloomberg.

CHINA: Most Chinese stocks fell, led by property developers, amid concerns over equity valuations at a 10-month high. Miners and utilities advanced. The Shanghai Composite Index added 0.1 percent to 2,385.42 at the close, even as five stocks fell for every four that gained.

Bonds – The market continued to trade relatively quietly, with yields inching downward across board. Yields expected to continue the downward trend over the next few weeks.

Bills – The Central Bank came into the market yestersday to offer N140billion in OMO bills. Selling N188.69billion in 85 and 106day bills at 12.30% and 12.35% respectively. This increase in supply at the short end is leading to a sell off on the short end with rates going up about 110bps yesterday. Expectation is that short end rates will continue to trend upward as the OMO activity is likely to continue to stay short and the long dated maturities which are in shorter supply will trend downward.

Money Market – OBB and unsecured O/N rates still trending upward closing 75bps above yesterday at 13.00% and 13.25% as the central bank came out to mop up liquidity.

CBN WDAS AUCTION- CBN offered and sold $120mio, lowest intervention rate 157.2974 (1% commission inclusive), 13 banks bided at the auction.

Indicative Currency Exchange Rates
Bid             Offer

EURUSD          1.3556            1.3566
GBPUSD          1.5829            1.5839
USDJPY           90.90             91.30
USDCHF         0.9111             0.9131
GBPEUR         1.1674              1.1684
USDZAR         9.0603           9.1603
USDNGN        156.95            157.70
JPYNGN          1.7266           1.7766
CHFNGN        172.26            176.26
EURNGN        212.76            216.76
GBPNGN         248.44          252.44
ZARNGN         17.32              19.32

Oil traded near the highest price in more than four months in New York as the Federal Reserve maintained an asset purchase program to boost the economy of the world’s biggest crude-consuming nation. Crude for March delivery was $97.92 a barrel, down 2 cent, in electronic trading on the New York Mercantile Exchange at 1:52 p.m. Singapore time.

Interest rates
NIBOR (%)                           LIBOR (%)

O/N              13.5833               USD 1 month           0.2017
7 Day            13.8750               USD 2 month          0.2455
30 Day         14.1667                USD 3 month          0.2985
60 Day         14.5000              USD 4 month           0.3491
90 Day         14.8333               USD 6 month          0.4732
USD 12 month         0.7905
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 157.33/43   157.00/10    157.30/40        157.10/20

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