A Review of the Nigerian Energy Industry

Financial market update

27 March 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Central Bank of Nigeria Governor Lamido Sanusi said he supports keeping the benchmark interest rate on hold to contain inflation in Africa’s top-oil producing nation as policy makers increasingly opt for a cut. The 12-member MPC, led by Sanusi, left the key rate at a record high of 12 percent for a ninth meeting last week to help bolster the naira and keep inflation below 10 percent. Three members voted for a reduction, up from two in January, to support the economy. Policy makers have so far rejected calls from businesses and the government to lower borrowing costs.

EUROPE: European stocks advanced as better- than-estimated U.S. durable-goods orders and housing data helped offset concern euro-area lawmakers will impose losses on bank deposits in the region. The Stoxx Europe 600 Index added 0.2 percent to 293.76 at the close in London. The benchmark gauge is heading for a 10th month of gains, its longest winning streak since July 1997, after U.S. data beat forecasts and amid optimism central banks will continue monetary stimulus.

INDIA: India’s rupee weakened on concern the government will be unable to rein in a record current- account deficit as inflows into equities slow. The rupee declined 0.3 percent to 54.3650 per dollar in Mumbai, according to data compiled by Bloomberg.

CHINA: China’s stocks fell for a third day as losses by liquor-makers overshadowed gains by China Communications Construction Co. and Jiangxi Copper Co. The Shanghai Composite Index dropped 0.2 percent to 2,293.35 at 1:54 p.m. local time, erasing earlier gains and adding to yesterday’s 1.3 percent slump.

Bonds – Market stable yesterday, yields traded up slightly in reaction to the OMO results but they came off to close as demand in the bond markets appears to be sustained at these levels.

Bills – OMO auction on Tuesday saw yields trade up in the secondary market as the OMO auction levels also creeping up at the auction yesterday. Expectation is that the primary auction today will also see rates as the special auction seems to have tipped rates in the bill market on an upward move.

Money Market – OBB and unsecured O/N rates closing last week at 10.15% and 10.25% respectively. Market still liquid.

Indicative Currency Exchange Rates
Bid             Offer

EURUSD              1.2850          1.2860
GBPUSD               1.5158          1.5168
USDJPY                94.76            95.16
USDCHF               0.9488        0.9508
GBPEUR               1.1796          1.1806
USDZAR               9.2759         9.3759
USDNGN              157.75           158.50
JPYNGN               1.6647          1.7147
CHFNGN              166.26          170.26
EURNGN              202.71          206.71
GBPNGN               239.12          243.12
ZARNGN               17.01             19.01

West Texas Intermediate oil traded near a five-week high after U.S. economic data signalled growth in the world’s biggest crude consumer. The nation’s stockpiles of the commodity rose, an industry report showed. WTI for May delivery was at $96.15 a barrel, down 19 cents, in electronic trading on the New York Mercantile Exchange at 2:45 p.m. Singapore time.

Interest rates
NIBOR (%)                        LIBOR (%)

O/N               10.2500           USD 1 month          0.2037
7 Day             10.5000          USD 2 month          0.2430
30 Day          10.8333           USD 3 month          0.2836
60 Day          11.2083           USD 4 month          0.3311
90 Day          11.4583            USD 6 month         0.4459
USD 12 month        0.7325
Y/Y Consumer Inflation February 2013 :          9.5%
FX Reserves: 20 March 2013 (USD bn)            48.458
MPR                                                                           12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

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