A Review of the Nigerian Energy Industry

Financial market update

06 March 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s foreign direct investment (FDI) is projected to continue rising, from $5.8 billion in 2011 to $6.8 billion for last year, once the figures are in, the International Monetary Fund says. The IMF projects FDI to grow to $7.3 billion this year, $8.7 billion next and $9.6 billion in 2015. Yet much of this investment remains focused on oil and gas.

EUROPE: The ECB appears increasingly likely to ease monetary policy during the first half of the year as inflation slows and unemployment increases. President Mario Draghi may use this week’s press conference to lay the groundwork for a decrease of the main policy rate in the months ahead. Macroeconomic indicators for the euro area suggest a need for additional monetary easing. The first estimate of the CPI reading for February revealed a drop to 1.8 percent year over year from 2 percent in January. The unemployment rate rose to a record 11.9 percent in January from 11.7 percent in December.

INDIA: India’s rupee rose the most in more than a week on optimism an improvement in the U.S. services industry, which drove stocks in the world’s largest economy to a record, will spur inflows to emerging markets. The currency climbed 0.5 percent to 54.6700 per dollar as of 10:10 a.m. in Mumbai, the biggest gain since Feb. 25, according to data compiled by Bloomberg.

CHINA: China’s stocks posted the biggest two-day gain in seven weeks as the nation’s economic prospects spurred fund inflows. The Shanghai Composite Index rose 0.9 percent to 2,347.18 at the close. The gauge gained 2.3 percent yesterday as the government announced higher fiscal spending targets during the first day of the National People’s Congress.

Bonds – Volatile day in the markets yesterday as some profit taking pushed yields up across the bond curve. The 16.39% 22s went up 17bps followed closely by the 15.10% APR 17s which also went up 15bps. There will likely be a reversal in yields and trend today as closing levels begin to look interesting to both onshore and offshore investors.

Bills – The CBN was out again on Tuesday to offer OMO bills to the market. As a result rates went up an average 15bps across the maturities. Secondary market volumes have reduced significantly since the start of the year as most of the demand goes into OMO and primary bill auctions.

Money Market – OBB and unsecured O/N rates eased to 10.15% and 10.25% yesterday. Market is being kept liquid by OMO maturities.

Indicative Currency Exchange Rates
Bid          Offer

EURUSD        1.3051          1.3061
GBPUSD         1.5125          1.5135
USDJPY           93.29          93.69
USDCHF         0.9417         0.9437
GBPEUR         1.1588          1.1598
USDZAR         9.0290        9.1290
USDNGN        157.20         157.95
JPYNGN          1.6851         1.7351
CHFNGN         166.93        170.93
EURNGN         205.16        209.16
GBPNGN         237.77          241.77
ZARNGN         17.41            19.41

Brent oil for April settlement rose as much as 62 cents to $112.23 a barrel on the London-based ICE Futures Europe exchange and was at $111.86 at 3:16 p.m. in Singapore. The volume of all futures traded was 58 percent above the 100-day average.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N              10.2500          USD 1 month             0.2032
7 Day            10.6250          USD 2 month             0.2415
30 Day         10.9583          USD 3 month              0.2811
60 Day         11.3333           USD 4 month             0.3351
90 Day         11.6250           USD 6 month             0.4524
USD 12 month           0.7430
Y/Y Consumer Inflation January 2013 :             9.00%
FX Reserves: 4 March 2013 (USD bn)                 47.563
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 157.62/72    157.25/35     157.62/72    158.06/16

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