A Review of the Nigerian Energy Industry

Financial market update

Financial-market24 April 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: The naira declined for a fifth day, reaching its lowest in more than five weeks on increased demand for dollars by oil importers and as the central bank cut the amount of U.S. currency sold at yesterday’s auction. The currency weakened 0.1 per cent to N158.83 to the dollar, the lowest on a closing basis since March 14, according to data compiled by Bloomberg.

UK: The Bank of England will extend by on year its plan to provide cheaper loans to companies and consumers and increase incentives to get funds to smaller firms enhancing a nine month old program to aid the economy. The funding the Lending Scheme will last until Jan 2015 and will make loans to small companies more attractive and open to non bank lenders.

INDIA: Inflation in India is slowing though the measure isn’t near the government’s comfort zone says Chakravarthy Rangarajan, Chairman of Prime Minster Manmohan Singh’s economic advisory unit. Policy changes are to be incremental and not “Big Bang”

ASIA:  Asian stocks rose the most in two weeks as Japanese exporters advanced after they yen weakened overnight and higher sales of new homes in the US added to recovery signs. Markets seems to be taking the “Risk On” position amid signs the US economy is recovering and on speculation the government and central bank in Japan will succeed in ending deflation.

Bonds – Another stable session in the bond market as prices continue its recovery after last week’s post auction sell-off, demand remains weak and expected same till after the bill auction on today.

Bills – Bearish session due to OMO auction announcement early on Tuesday. Auction was conducted to mop-up liquidity inflow, bill yields traded 15bps up in yesterday’s session. Primary t-bill auction holds on Wednesday.

Money Market – Additional liquidity disbursed by the CBN into the market today as payment for personnel cost, lending rates only down 25bps to 10.25% and 10.50% on O/N and OBB respectively.

Indicative Currency Exchange Rates
Bid         Offer

EURUSD           1.3001       1.3011
GBPUSD           1.5254       1.5264
USDJPY            99.51          99.91
USDCHF          0.9448       0.9468
GBPEUR          1.1731          1.1741
USDZAR          9.2136        9.3136
USDNGN         158.70        159.45
JPYNGN          1.5948         1.6448
CHFNGN         167.97         171.97
EURNGN        206.33         210.33
GBPNGN         242.08        246.08
ZARNGN         17.22           17.97

WTI climbed higher after report showed stockpile declined in US, as it gained as much as $0.47 to $89.65/bbl. Brent only gained $0.04 to $100.35/bbl with the WTI-Brent benchmark premium down to $10.97.

Interest rates
NIBOR (%)                     LIBOR (%)

O/N              10.7917         USD 1 month        0.2002
7 Day            11.0000        USD 2 month       0..2398
30 Day         11.2500         USD 3 month       0.2756
60 Day         11.5000         USD 6 month       0.4314
90 Day         11.7917          USD 12 month      0.7110
Y/Y Consumer Inflation March 2013 :        8.6%
FX Reserves: 17 April 2013 (USD bn)         48.768
MPR                                                                    12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

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USD/NGN  158.85/95    158.60/70    158.70/80    158.60/70

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