A Review of the Nigerian Energy Industry

Financial market update

Financial markets13 May 2013, Sweetcrude, Lagos – Local and international financial market services update.
NIGERIA: Nigeria’s economy grew by an estimated 6.6% year on year in the first quarter of 2013, down from 7.1% in the preceding quarter, according to the Economic Report, produced by the Central Bank of Nigeria (CBN), for the first quarter of 2013. In the report published on May 8th, the CBN attributed the drop in GDP growth to a slowdown in the non-oil sector, which has in recent years been the main driver of growth in Africa’s second-biggest economy.

EUROPE: European policy makers expressed a willingness to consider new ways to revive their ailing economy as they confronted fresh U.S. pressure to take action. The bloc’s finance ministers and central bankers left weekend talks of the Group of Seven signalling that they’re poised to scale back austerity, are open to increased monetary aid and looking to unfreeze bank lending. European officials will meet in Brussels today to discuss the economy and review aid payments for crisis-struck nations from Greece to Spain.

INDIA: Indian equities declined from a 28- month high as some investors judged the recent rally may have outpaced the outlook for earnings growth. The S&P BSE Sensex fell 0.8 percent to 19,953.37 at 12:10 p.m. in Mumbai, bound for the biggest drop in a month.

CHINA: China’s stocks fell as economic reports overshadowed speculation the government will postpone the resumption of initial public offerings. A resumption of IPOs may be delayed until after June because of the economic environment, the China Securities Journal reported today, citing unidentified people. The Shanghai Composite Index declined 0.2 percent to 2,241.92 at the close.

Bonds – Bullish trend continued again on Friday with yields coming off about 5-10bps across the curve in early trading. Market stabilized to close the day we can expect a volatile week in the lead up to the bond auction.

Bills – The Central Bank was out on Friday to offer OMO bills in a bid to further squeeze liquidity. They sold N75billion against an offer of N50billion in 153 day bill. The secondary market was volatile in trading on Friday, dipping across most parts of the curve.

Money Market – OBB and unsecured O/N rates rising to 12.00% & 12.25% respectively as liquidity levels dropped on Friday with the market opening up 166billion and the CBN coming out to sell N75billion in OMO bills.

Indicative Currency Exchange Rates
Bid          Offer

EURUSD       1.2965         1.2975
GBPUSD        1.5360        1.5370
USDJPY         101.64         102.04
USDCHF       0.9582        0.9602
GBPEUR       1.1846          1.1856
USDZAR       9.0940        9.1940
USDNGN      156.95          157.70
JPYNGN       1.5442          1.5942
CHFNGN      163.80         167.80
EURNGN      203.49       207.49
GBPNGN       241.08       245.08
ZARNGN        17.26          19.26

West Texas Intermediate crude fell for a third day, the longest run of declines in four weeks, as OPEC boosted
output to the highest level in five months. WTI for June delivery dropped as much as 97 cents to $95.07 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.28 at 2:21 p.m. Singapore time.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N              12.8333          USD 1 month        0.1992
7 Day            13.0000         USD 2 month        0.2374
30 Day         13.2083          USD 3 month       0.2751
60 Day         13.4583          USD 4 month       0.3176
90 Day         13.7500          USD 6 month       0.4264
USD 12 month     0.7011
Y/Y Consumer Inflation March 2013 :          8.6%
FX Reserves: 7 May 2013 (USD bn)              48.651
MPR                                                                     12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

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