A Review of the Nigerian Energy Industry

Financial market update

03 April 2013, Sweetcrude, Lagos – Local and international financial market update.

NIGERIA:  Nigerian banks may report increased loan losses from next year amid growth in lending, according to Standard & Poor’s. Banks in Africa’s top oil producer are expected to see loans and deposits rise 20 per cent to 30 per cent this year helped by foreign exchange and non-oil industry lending, said Matthew Pirnie, a Johannesburg-based analyst at S&P. Lenders had “muted” credit growth last year of about 12 per cent as they pushed down ratios of non-performing loans, he said.

EUROPE: European stocks declined after yesterday’s biggest rally for the region’s benchmark index in four weeks, as investors await reports on U.S. employment and services industries. The Stoxx Europe 600 Index fell 0.3 per cent to 296.68 at 8:04 a.m. in London, paring yesterday’s 1.3 per cent advance.

INDIA: Indian stocks dropped for the first time in five days, led by telecom companies and automakers. The S&P BSE Sensex lost 0.3 per cent to 18,984.75 at 11:31 a.m. in Mumbai, with volumes 27 per cent lower than the 30-day average for this time of day.

CHINA: China’s stocks rose from a three- month low after data showed the nation’s service industries expanded at a faster pace last month. The Shanghai Composite Index increased 0.5 percent to 2,239.33 as of 9:35 a.m. local time after closing yesterday at the lowest level since Dec. 27. The non-manufacturing Purchasing Managers’ Index rose to 55.6 from 54.5 in February, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement today. Readings above 50 signal expansion.

Bonds – Market continued its rally yesterday with yields dipping about 30bps across the curve as offshore interest resurfaces in the markets largely in reaction to the Barclays inclusion of FG bonds on their emerging markets index. it is very likely that we will still see rates lower in the next few trading days.

Bills – The long dated maturities came off about 50bps on average yesterday as demand went into the longer dates after a lull in that end of the curve and especially as OMO maturities being issued have stayed short dated.

Money Market – OBB and unsecured O/N rates closing last week at 10.10% and 10.20% respectively. Market still liquid.

Indicative Currency Exchange Rates
Bid           Offer

EURUSD       1.2796          1.2806
GBPUSD        1.5106          1.5116
USDJPY         93.41            93.81
USDCHF        0.9513         0.9533
GBPEUR        1.1803          1.1813
USDZAR         9.2355         9.3355
USDNGN        157.95         158.70
JPYNGN         1.6909         1.7409
CHFNGN        166.04         170.04
EURNGN        202.11         206.11
GBPNGN         238.60        242.60
ZARNGN         17.10            19.10

West Texas Intermediate fell for the second time in three days after an industry report showed U.S. crude stockpiles increased the most in four weeks and a government order
prevented the restart of a pipeline to the Texas Gulf Coast.
WTI for May delivery declined as much as 68 cents to $96.51 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.62 at 3:18 p.m. Singapore time.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N              10.3333         USD 1 month          0.2027
7 Day            10.5833         USD 2 month          0.2415
30 Day         10.9583         USD 3 month          0.2821
60 Day         11.3333          USD 4 month         0.3301
90 Day         11.5833          USD 6 month         0.4439
USD 12 month        0.7280
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.

Hi             Low         Close           Prev.Close
         158.65/75    158.20/30   158.50/60    158.53/63

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