A Review of the Nigerian Energy Industry

Financial market update

20 February 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria, Africa’s largest oil producer, is seeking international help to stop the theft of crude by criminal syndicates tapping pipelines in the Niger River delta, Petroleum Minister Diezani Alison-Madueke said. President Goodluck Jonathan held talks last week with U.K. Prime Minister David Cameron and French President Francois Hollande who are “all coming on board to help sort out this particular menace,” she said. The thefts cost the West African nation about $7 billion in 2011, according to the central bank. Nigeria loses an estimated 250,000 barrels a day in stolen crude, according to a government report on the oil industry prepared for Jonathan.

EUROPE: Euro-area construction output declined for a second month in December as activity in Germany slumped the most in 10 months. Construction in the 17-nation euro area fell 1.7 percent from November, when production dropped 0.4 percent, the European Union’s statistics office in Luxembourg said yesterday. From a year earlier, December output declined 4.8 percent.

INDIA: Indian stocks climbed to a two-week high as overseas investors continued a record buying spree on speculation the government will extend economic reforms in next week’s budget. The S&P Dow Jones Sensex Index, or Sensex, increased 0.2 percent to 19,675.03 at 10:55 a.m., bound for the highest level since Feb. 4.

CHINA: Chinese stocks rose as a gauge of health-care companies rallied the most in more than two years after the People’s Daily said the government plans to reduce the number of drug wholesalers. The Shanghai Composite Index gained 0.6 percent to 2,397.18 at the close, erasing a 0.5 percent decline.

Bonds – Markets rallied again on Tuesday, though not as aggressively as the initial reaction seen on Monday. The effects of the drop in inflation numbers added to an injection of liquidity into the markets are putting downward pressure on yields.

Bills – With the announcement of an OMO auction yesterday in response to the liquidity injection, a round of profit taking was seen on Tuesday in the markets. Rates went up an average 20bps after dipping significantly on Monday.

Money Market – OBB and unsecured O/N rates crashed yesterday about 300bps to 10.15 and 10.25% respectively as inflows from FAAC of about N286billion and maturing bonds of approximately N489billion came into the system yesterday.

Indicative Currency Exchange Rates
Bid             Offer

EURUSD             1.3423             1.3433
GBPUSD             1.5439             1.5449
USDJPY              93.24               93.64
USDCHF             0.9192            0.9212
GBPEUR             1.1501              1.1511
USDZAR             8.8465            8.9465
USDNGN            157.00            157.75
JPYNGN             1.6838            1.7338
CHFNGN            170.80            174.80
EURNGN            210.74            214.74
GBPNGN            242.39            246.39
ZARNGN            17.75                19.75

Brent oil for April settlement dropped 35 cents, or 0.3 percent, to $117.03 a barrel on the London-based ICE Futures Europe exchange. Trading volume was 34 percent below the 100-day average.

Interest rates
NIBOR (%)                            LIBOR (%)

O/N                 10.5417              USD 1 month         0.2017
7 Day               10.8750             USD 2 month         0.2455
30 Day            11.7500              USD 3 month         0.2891
60 Day           12.4167               USD 4 month         0.3446
90 Day           12.8750              USD 6 month         0.4629
USD 12 month       0.7595
Y/Y Consumer Inflation December 2012 :           12.00%
FX Reserves: 15 February 2013 (USD bn)           46.726
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   157.25/35   157.32/42   157.30/40

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