A Review of the Nigerian Energy Industry

Financial market update

01 March 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigerian President Goodluck Jonathan approved a 4.98 trillion naira ($31.6 billion) budget for 2013, higher than he originally proposed to lawmakers in October, presidential spokesman Reuben Abati said. The legislature on Dec. 20 approved a 4.98 trillion naira spending plan for 2013, higher than the 4.92 trillion naira budget Jonathan presented. Lawmakers increased the benchmark oil price by $4 to $79 a barrel, providing more funds to the government to spend and narrowing the budget deficit to 1.18 percent from 2.17 percent. The country expects to produce 2.53 million barrels of oil a day this year, according to the budget.

EUROPE: European Central Bank President Mario Draghi signalled the bank has no intention of tightening monetary policy anytime soon with inflation projected to “significantly” undershoot its 2 percent target next year. The ECB has cut its benchmark interest rate to a record low of 0.75 percent, extended over 1 trillion euros ($1.3 trillion) in cheap loans to banks and pledged to buy the bonds of debt- strapped nations if they agree to economic reforms. The ECB in December forecast the 17-nation euro economy will contract 0.3 percent this year and inflation will slow to 1.4 percent in 2014.

INDIA: India set its target for capital infusion into state-run banks at 140 billion rupees ($2.6 billion) for the next fiscal year to help lenders comply with tighter rules while boosting credit growth.

CHINA: China’s stocks rose, driving the biggest gains for the benchmark index in four weeks, on economic growth optimism and as property developers rallied after China Vanke Co.’s profit beat analyst estimates. The Shanghai Composite Index rose 1.1 percent to 2,338.81 as of 1:12 p.m. local time, heading for the biggest advance since Feb. 1.

Bonds – Low traded volumes in the bond market yesterday though yields went up an average 5-10bps across the curve.

Bills – The Central Bank was out to mop up liquidity yesterday offering N200billion in 120 and 190 day bills. Secondary market activity was relatively low and market lightly bearish on the back of the OMO auction which took most of the demand available in markets.

Money Market – OBB and unsecured O/N rates stable at 10.25% and 10.50% yesterday. Market is still fairly liquid.

CBN WDAS AUCTION- CBN offered and sold $200mio. Marginal rate at 155.75 naira, with 18 banks participating.

Indicative Currency Exchange Rates
Bid            Offer

EURUSD     1.3136          1.3146
GBPUSD      1.5170           1.5180
USDJPY       92.39           92.79
USDCHF      0.9298        0.9318
GBPEUR      1.1545          1.1555
USDZAR      8.8340        8.9340
USDNGN     157.75          158.50
JPYNGN       1.7074         1.7574
CHFNGN      169.66        173.66
EURNGN      207.22        211.22
GBPNGN       239.31        243.31
ZARNGN       17.86          19.86

West Texas Intermediate oil gained a second day, trimming the first monthly drop since October. U.S. crude stockpiles increased for a sixth week, according to a report from the Energy Information Administration. WTI for April delivery gained as much as 42 cents to $93.18 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.02 at 12:45 p.m. Singapore time.

Interest rates
NIBOR (%)                       LIBOR (%)

O/N              10.7500           USD 1 month             0.2037
7 Day            11.2500           USD 2 month             0.2435
30 Day         11.9583            USD 3 month            0.2871
60 Day         12.4583           USD 4 month            0.3406
90 Day         12.8750           USD 6 month            0.4569
USD 12 month          0.7525
Y/Y Consumer Inflation January 2013 :             9.00%
FX Reserves: 21 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  158.25/35   157.55/65   158.18/28   157.75/85

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