A Review of the Nigerian Energy Industry

Financial market update

01 February 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria, yesterday, recorded a milestone in her investment drive as the federal government and General Electric Company of the United States sealed a $1bn (N158bn) investment deal for the establishment of a new manufacturing and assembly facility in Calabar. The deal, which comprises $250million capital expenditure and over $800 million incremental spending on local sourcing of goods and services, is expected to create 2,300 jobs and make Nigeria the regional hub for GE’s manufacturing service and innovation in Africa. It will also support the company’s power generation, oil and gas production and exploration activities.

EUROPE: The euro gained for a sixth straight month against the dollar, the longest winning streak in almost a decade, as optimism increased that the worst is over in the currency bloc’s sovereign-debt crisis. The euro reached $1.3594, the highest level since Nov. 18, 2011, before trading at $1.3579 at 5 p.m. New York time. It lost 0.2 percent earlier.

INDIA: Most Indian stocks advanced after the benchmark index capped a third monthly advance yesterday, as foreign funds continued to be net buyers of local equities. The BSE India Sensitive Index, or Sensex, fell 0.1 percent to 19,880.44 at 11:57 a.m. in Mumbai, after changing directions at least eight times.

CHINA: China’s machinery industry maintained slower but moderate growth in 2012 with positive signs of restructuring and upgrading, the China Machinery Industry Federation (CMIF) said today. The total output of the machinery industry grew 12.64 percent to 18.41 trillion yuan (2.93 trillion U.S. dollars) in 2012, the federation said, citing data from the National Bureau of Statistics.

Bonds – The market continued to trade relatively quietly on Wednesday, 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 on Wednesday 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 on Wednesday. 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.

Indicative Currency Exchange Rates
Bid              Offer

EURUSD          1.3625              1.3635
GBPUSD          1.5865              1.5875
USDJPY           92.15                92.55
USDCHF          0.9092             0.9112
GBPEUR          1.1643              1.1653
USDZAR          8.9322             9.0322
USDNGN         156.85              157.60
JPYNGN          1.7021              1.7521
CHFNGN         172.51              176.51
EURNGN         213.71              217.71
GBPNGN         248.84            252.84
ZARNGN         17.56                19.56

Oil headed for the longest run of weekly gains in more than eight years in New York before a report that may show the U.S. added jobs last month, signalling an economic recovery in the world’s biggest crude consumer. Crude for March delivery was at $97.55 a barrel, up 6 cents, in electronic trading on the New York Mercantile Exchange at 5:06 p.m. Sydney time.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N               11.0000         USD 1 month         0.1997
7 Day             11.4583          USD 2 month        0.2455
30 Day          11.8750          USD 3 month        0.2980
60 Day          12.2917          USD 4 month        0.3471
90 Day          12.4583         USD 6 month        0.4684
USD 12 month      0.7810
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.


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