A Review of the Nigerian Energy Industry

Financial market update

27 February 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s external reserves, which have been on the upswing since the last quarter of 2012, due to the stability enjoyed by the naira as well as reasonably high oil prices, climbed higher to close at $47.01 billion on Friday.

EUROPE: The European Union on Thursday agreed its first law to regulate safety in offshore oil and gas drilling across the 27-member bloc and seek to prevent any repeat of BP’s catastrophic Gulf of Mexico spill. Some environmental campaigners said the law, which still needs final endorsement from member state and the European Parliament, was not robust enough. Others argue it could help to protect Arctic waters from oil spills.

INDIA: India’s main stock indexes fell more than 1 percent on Tuesday on widespread profit-taking in blue chips such as ICICI Bank and Tata Motors ahead of the 2013/14 budget to be unveiled on Thursday. The NSE index fell 1 percent to below 5,800 points for the first time since Nov. 29 2012

CHINA: China’s stocks fell, dragging the benchmark index to the lowest level in a month, on concern the government will introduce more property curbs and after the central bank drained liquidity from the financial system. The Shanghai Composite Index slumped 1.1 percent to 2,301.39 at 2:41 p.m. local time.

Bonds – Bullish session yesterday though volumes were low in the market. The bearish sentiment that ended the week appears to have slowed and we will possibly see rates gradually drop over the next few weeks with intermittent profit taking.

Bills – Some short end selling on Monday, in reaction to the OMO offering by the CBN, general trading and rates trending up across the maturities. Rates went up an average 20bps to close the day.

Money Market – OBB and unsecured O/N rates averaging 10.25% and 10.50% yesterday. Market is still fairly liquid even though the central bank came out again to offer OMO bills today as they aggressively try and mop up this liquidity.

CBN WDAS AUCTION- CBN offered and sold $150mio. Marginal rate at 155.75 naira, with 19 banks participating.

Indicative Currency Exchange Rates
Bid              Offer

EURUSD            1.3049              1.3059
GBPUSD             1.5177               1.5187
USDJPY              91.82                 92.22
USDCHF              0.9318             0.9338
GBPEUR              1.1629              1.1639
USDZAR              8.8237             8.9237
USDNGN             156.95              157.70
JPYNGN               1.7093             1.7593
CHFNGN             168.44             172.44
EURNGN             204.80            208.80
GBPNGN             238.20             242.20
ZARNGN              17.79                19.79

Brent crude traded near the highest level in four days before international talks with Iran on its nuclear program. Brent for April settlement advanced as much as $1.77 to $115.87 a barrel, the highest level since it settled at $117.52 on Feb. 19. It was at $115.54 as of 1:28 p.m. local time on the Londonbased ICE Futures Europe exchange.

Interest rates
NIBOR (%)                       LIBOR (%)

O/N              10.6250          USD 1 month           0.2027
7 Day            11.0417           USD 2 month           0.2440
30 Day          12.0000         USD 3 month           0.2866
60 Day          12.6250          USD 4 month           0.3426
90 Day          13.1250           USD 6 month           0.4599
USD 12 month         0.7545
Y/Y Consumer Inflation January 2013 :             9.00%
FX Reserves: 19 February 2013 (USD bn)          47.017
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   1576.50/60    157.30/40    157.35/45   157.38/48

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