A Review of the Nigerian Energy Industry

Financial market update

20 March 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The Central Bank of Nigeria will probably keep its benchmark lending rate at a record high after President Goodluck Jonathan approved a budget that boosts spending in Nigeria. The Monetary Policy Committee, led by Governor Lamido Sanusi, will hold its policy rate at 12 percent for a ninth consecutive meeting today, according to 10 of the 11 economists surveyed by Bloomberg News. Jonathan last month approved a budget that raises the benchmark oil price by $4 to $79 a barrel, a move that Finance Minister Ngozi Okonjo-Iweala and Sanusi warned could stoke inflation as it gives the government more funds to spend. Inflation accelerated to 9.5 percent in February from a 17-month low of 9 percent in the previous month.

EUROPE: Euro-area finance ministers told Cyprus to raise 5.8 billion euros ($7.5 billion) from bank depositors to unlock emergency loans, maintaining the revenue target while suggesting sparing small-scale savers. The finance chiefs from the 17 euro countries kept the pressure on Cyprus as they signalled flexibility in applying the tax announced three days ago.

INDIA: Indian stocks tumbled the most in three weeks after the government’s biggest partner withdrew support and the central bank said there’s limited room for further easing. The S&P BSE Sensex fell 1.1 percent to 19,077.69 at 12:33 p.m. in Mumbai, bound for the biggest drop since Feb. 28.

CHINA: China’s foreign direct investment rose for the first time in nine months in February, a sign confidence in the world’s second-biggest economy is improving amid optimism growth will keep rebounding. Inbound investment gained 6.3 percent from a year earlier to $8.21 billion, the Ministry of Commerce said in a statement today in Beijing.

Bonds – Continued volatility in the markets, a sell off to open yesterday but as yields peaked between 11.65-11.70 this led to a rally though yields closed lower than the open. Possibly a quieter session today in ahead of the MPC decision.

Bills – Rates up an average 10-15bps across the maturities. No OMO offerings on Monday, volumes relatively low in yesterday’s markets.

Money Market – OBB and unsecured O/N rates up slightly to 10.25% and 10.50% on Monday.

CBN WDAS AUCTION- CBN offered and sold $300m. Marginal rate at 155.76 naira, same as previous sale on March 13.

Indicative Currency Exchange Rates
Bid             Offer

EURUSD        1.2944          1.2954
GBPUSD        1.5103           1.5113
USDJPY          95.47             95.87
USDCHF        0.9466          0.9486
GBPEUR        1.1663           1.1673
USDZAR         9.1901          9.2901
USDNGN         158.15          158.90
JPYNGN          1.6565          1.7065
CHFNGN         167.07          171.07
EURNGN         204.71          208.71
GBPNGN          238.85        242.85
ZARNGN         17.21              19.21

West Texas Intermediate oil traded near a one-month high as tension eased over a bank tax in Cyprus that threatens to worsen Europe’s debt crisis. WTI for April delivery, which expires tomorrow, was at $93.75 a barrel, up 1 cent, in electronic trading on the New York Mercantile Exchange at
2:51 p.m. Singapore time.

Interest rates
NIBOR (%)                  LIBOR (%)

O/N              10.6250      USD 1 month          0.2032
7 Day            10.9167       USD 2 month         0.2415
30 Day          11.2917       USD 3 month         0.2801
60 Day          11.6250      USD 4 month         0.3321
90 Day          11.9583       USD 6 month        0.4454
USD 12 month       0.7315
Y/Y Consumer Inflation February 2013 :    9.5%
FX Reserves: 15 March 2013 (USD bn)       48.315
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  159.40/50   158.40/50    158.60/70    159.40/50

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