A Review of the Nigerian Energy Industry

Financial market update

Financial-market15 April 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The federal government Wednesday assured Nigerians that despite the challenges in the power sector, it was still hopeful of ramping up on-grid electricity generation and distribution capacity to 5,000 megawatts (MW) within the year. The assurance came just as it denied that the recent drop of over 1,112mw of electricity was occasioned by system failure. Minister of Power, Prof. Chinedu Nebo, described as false, reports that system collapse recorded in the transmission network was responsible for the sharp drop in power generation and distribution across the country from the all-time high of about 4,500mw to about 3,300mw.

EUROPE: European stocks were little changed, following their biggest weekly gain in a month, as China’s economy grew at a slower pace than estimated and as investors awaited a report on manufacturing in the New York area. The Stoxx Europe 600 Index was unchanged at 292.4 as of 8:09 a.m. in London.

INDIA: Indian inflation eased in March by more than economists estimated to a 40-month low, boosting the case for an interest-rate cut to revive a struggling economy. The wholesale-price index rose 5.96 percent from a year earlier, after climbing 6.84 percent in February, the Commerce Ministry said in a statement in New Delhi today. India’s central bank has lowered borrowing costs twice in 2013 to spur investment, after the government pared the budget deficit to help curb price increases and eased caps on capital inflows to fund a record current-account gap.

CHINA: China’s economic growth unexpectedly lost momentum in the first quarter as gains in factory output and consumption weakened, driving stocks and commodities lower on concern global expansion will slow. Gross domestic product rose 7.7 percent from a year earlier, the National Bureau of Statistics said in Beijing today. That compares with 7.9 percent in the fourth quarter.

Bonds – Another quiet session on Friday, yields coming off to close the day an average 6bps

Bills – Active session on Friday, volatile across board with no clear pattern or direction as liquidity levels drop. Demand doesn’t appear to be slowing with offshore interest in the markets still quite significant.

Money Market – OBB and unsecured O/N rates volatile this week as rates went up again on Friday to 11.75% and 12.00% as liquidity levels dropped after the CBN successfully mopped up liquidity through an OMO offering on Thursday.

Indicative Currency Exchange Rates
                         Bid        Offer
EURUSD       1.3088      1.3098
GBPUSD       1.5338       1.5348
USDJPY         98.21         98.61
USDCHF       0.9287      0.9307
GBPEUR       1.1717        1.1727
USDZAR       9.0059     9.1059
USDNGN      157.40      158.15
JPYNGN       1.6027      1.6527
CHFNGN      169.48      173.48
EURNGN      206.01     210.01
GBPNGN      241.42      245.42
ZARNGN      17.48        19.48

West Texas Intermediate dropped below $90 a barrel to the lowest level in more than three months as economic growth unexpectedly eased in China, the world’s second-largest crude consumer. WTI for May delivery decreased as much as $2.83 in electronic trading on the New York Mercantile Exchange and was at $89.11 a barrel at 2:48 p.m. Singapore time.

Interest rates
NIBOR (%)                    LIBOR (%)

O/N             12.4167          USD 1 month        0.1997
7 Day           12.7500         USD 2 month       0.2403
30 Day        13.0000         USD 3 month       0.2776
60 Day        13.2083         USD 4 month       0.3231
90 Day       13.5000          USD 6 month       0.4379
USD 12 month     0.7190
Y/Y Consumer Inflation February 2013 :    9.5%
FX Reserves: 10 April 2013 (USD bn)         48.699
MPR                                                                    12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

Hi               Low          Close        Prev.Close
157.90/00   157.55/65   157.85/95   157.60/70

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