A Review of the Nigerian Energy Industry

Financial market update

04 April 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: AMCON Tuesday said it had stopped buying non-performing loans (NPLs) from the banking sector. Reuters quoted the Managing Director/Chief Executive Officer, AMCON, Mr. Mustapha Chike-Obi, to have said that the move aimed at discouraging excessive risk-taking after the 2009 financial crisis. AMCON was set up in 2010 to clean up the banking system following a $4 billion rescue of nine lenders that came close to collapse. Chike-Obi said the corporation would no longer serve as a lifeline to banks with bad loans.

Bonds – A reversal in trend came on Wednesday as yields went up on the back of some profit taking as some players felt market had hit a low. With offshore interest returning to the markets on the back of the Barclays inclusion of Nigerian Bonds on their emerging markets index yields are still likely to dip in the days ahead. Markets are likely to be volatile in the days ahead as it struggles to find stable levels.

Bills – Rates rallying in the markets on Wednesday on the back of expected liquidity from maturing bills as well as significant offshore interest in the markets. The short dated bills down an average 60bps while the medium and long end came off about 15bps.

Money Market – OBB and unsecured O/N rates closing last week at 10.10% and 10.20% respectively. Market still liquid. The CBN came out yesterday with another special rate OMO auction issuing a 289 day bill at 12.75%. They were able to mop up about N378billion.

EUROPE: Euro-area inflation slowed less than economists forecast in March as steeper price increases for services offset an easing in energy costs. Annual price growth in the 17-nation economy was 1.7 percent, down from 1.8 percent in February, the European Union’s statistics office in Luxembourg said on Wednesday.

INDIA: India’s benchmark stock index fell the most in two weeks, led by automobile and telecommunication companies. The S&P BSE Sensex retreated 1.3 percent to 18,801.64 at the close in Mumbai on Wednesday.

CHINA: China’s 4Q current account’s surplus was revised to $45.1b, State Administration of Foreign Exchange says in statement on website.

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

Brent for May settlement retreated for a second day on Wednesday on the London-based ICE Futures Europe exchange, dropping 99 cents to $109.70 a barrel.

Interest rates
NIBOR (%)                      LIBOR (%)
O/N              11.0417          USD 1 month          0.2017
7 Day            11.2500         USD 2 month          0.2415
30 Day         11.5417           USD 3 month         0.2811
60 Day         11.8750          USD 4 month         0.3286
90 Day         12.0833         USD 6 month         0.4424
USD 12 month       0.7250
Y/Y Consumer Inflation February 2013 :       9.5%
FX Reserves: 28 March 2013 (USD bn)         48.573
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  158.38/48    157.90/00     157.95/05    158.50/60

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