A Review of the Nigerian Energy Industry

Financial market update

20 March 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s central bank left its benchmark interest rate at a record high to bolster the currency of Africa’s top oil producer and keep inflation under control. The Monetary Policy Committee kept the policy rate at 12 percent for a ninth consecutive meeting, Governor Lamido Sanusi told reporters yesterday in the capital, Abuja. Policy makers opted against lowering rates “because it could send wrong signals of a premature termination of an appropriately tight monetary policy stance,” Sanusi said

EUROPE: European policy makers must weigh how far to push Cyprus after lawmakers in the Mediterranean nation rejected an unprecedented levy on bank deposits, throwing into limbo a rescue package designed to keep it in the euro. Luxembourg Finance Minister Luc Frieden called for the 17 euro-area finance ministers to reconvene “as soon as possible” to cobble together a new package. The European Central Bank, whose Governing Council meets today in Frankfurt, will also have to decide whether to give Cyprus more time or consider cutting off liquidity to the country’s banks.

INDIA: India’s benchmark index headed for the longest losing run in more than five weeks amid concern the withdrawal of the government’s biggest partner from the ruling alliance may jeopardize economic reforms. The S&P BSE Sensex dropped for the fourth day, losing 0.2 percent to 18,976.22 at 10:25 a.m. in Mumbai

CHINA: China’s stocks rose the most in two months before a report that may show manufacturing expanded and as Market Studies LLC’s Tom DeMark said Shanghai’s equity index will rally as much as 28 percent by September. The Shanghai Composite climbed 2.7 percent to 2,317.38 at the close.

Bonds – Markets rallied on Tuesday ahead of the MPC decision as some market players took a bet on a cut at the MPC or a lowering of the asymmetric corridor. Rates dipped an average 30bps across the 2022s and 2017s as the biggest movers of the day. The volatility and swings in markets is likely to continue as rate direction remains uncertain.

Bills – Another lightly bearish day yesterday as the CBN came out to offer OMO bills selling N43billion in 121 days bills at 10.90% discount and N81billion in 177 days bills at 11.00%. The OMO activity will continue as the CBN will continue trying to manage the glut in liquidity.

Money Market – OBB and unsecured O/N rates trading down to 10.15% both yesterday. An injection of liquidity coming from FAAC of about N286billion.

Indicative Currency Exchange Rates
Bid          Offer

EURUSD       1.2899        1.2909
GBPUSD       1.5092        1.5102
USDJPY        95.27          95.67
USDCHF       0.9467       0.9487
GBPEUR       1.1702        1.1712
USDZAR       9.2523       9.3523
USDNGN      158.10        158.85
JPYNGN       1.6595        1.7095
CHFNGN      167.00       171.00
EURNGN      203.93      207.93
GBPNGN      238.60      242.60
ZARNGN       17.09         19.09

Brent oil rebounded from the lowest level in three months, widening its premium to West Texas Intermediate crude for the first time in four days. Brent for May settlement on the London-based ICE Futures Europe exchange climbed as much as 73 cents to $108.18 a barrel and was at $108.14
at 2:48 p.m. Singapore time.

Interest rates
NIBOR (%)                    LIBOR (%)

O/N              10.2500       USD 1 month         0.2037
7 Day            10.5417        USD 2 month        0.2420
30 Day         10.8750       USD 3 month        0.2821
60 Day         11.2083       USD 4 month        0.3310
90 Day         11.6250       USD 6 month        0.4479
USD 12 month       0.7350
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 MarketDealers Association Standard Chartered Bank Nigeria.

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 158.90/00   158.54/64   158.60/70   158.60/70

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