A Review of the Nigerian Energy Industry

Financial market update

Financial markets20 May 2013, Sweetcrude, Lagos – Local and international financial market services update.
NIGERIA: Inflation rate measured by the Consumer Price Index increased by 0.5% in April, according to a report released by the National Bureau of Statistics, Thursday. “In April 2013 the Consumer Price Index (CPI), which measures inflation, rose by 9.1 percent year-on-year (compared to 8.6 per cent in March).This is the fourth consecutive month of single digit year-on-year rates being recorded, and the first time this has occurred since the movement to the new CPI base period,” according to the report released by the Statistician- General of NBS, Dr Yemi Kale.

EUROPE: European stocks climbed, with the Stoxx Europe 600 Index extending its advance following four consecutive weeks of gains. The Stoxx 600 added 0.1 percent to 309.04 at 8:07 a.m. in London. The gauge climbed 1.2 percent last week, reaching its highest level since June 2008, as the Bank of England lifted its growth forecast for Europe’s third-biggest economy.

INDIA: Indian equities gained, with the benchmark gauge advancing for a fifth day, as overseas funds continued to boost their holdings of local stocks. The S&P BSE Sensex added 0.5 percent to 20,382.46 at 12:05 p.m. in Mumbai, holding at the highest level since January 2011.

CHINA: China’s new-home prices rose last month in 68 of 70 cities tracked by the government, indicating Premier Li Keqiang will need to maintain efforts to cool the property market even as economic growth slows. China’s policy makers are trying to avoid property bubbles and make homes more affordable while bolstering an economy that lost steam in the first quarter. Expanding a campaign against housing speculation could choke off real-estate development that is helping counter a slowdown in manufacturing investment and supporting demand for steel, cement and household goods.

Bonds – Markets continued to rally on Friday in continued response to the lower than expected cut offs at auction on Wednesday. Yields down around 10bps on average from Thursday with a high possibility that the move is driven by some players who were short into the auction scrambling to cover positions as well as other market participants betting on a possible rate cut at the MPC.

Bills – With interest rate high and liquidity levels low market sold off slightly across the maturities on Friday. We will likely see demand back in when liquidity returns to the markets possibly after the FAAC payment expected this week.

Money Market – OBB and unsecured O/N rates did a sharp reversal going up 400bps on Friday back to the 14.50% and 14.75% levels. Funding for WDAS and the bond auction on the main causes of the spike again on Friday. The MPC meets on Monday/Tuesday where the policy rate is expected to be held flat in light of the recent acceleration in inflation.

Indicative Currency Exchange Rates
Bid         Offer

EURUSD          1.2863     1.2873
GBPUSD          1.5202      1.5212
USDJPY           102.58      102.98
USDCHF          0.9685     0.9705
GBPEUR          1.1818       1.1828
USDZAR          9.4045      9.5045
USDNGN        157.80        158.55
JPYNGN         1.5383        1.5883
CHFNGN        162.93        166.93
EURNGN        202.98       206.98
GBPNGN        239.89        243.89
ZARNGN 16.78 18.78

West Texas Intermediate crude swung between gains and losses near the highest price in a week. WTI for June
delivery was at $95.69 a barrel, down 33 cents in electronic trading on the New York Mercantile Exchange at 2:44 p.m. Singapore time.

Interest rates
NIBOR (%)                       LIBOR (%)

O/N             15.3750            USD 1 month          0.1967
7 Day           15.4583            USD 2 month         0.2335
30 Day        15.8333            USD 3 month         0.2736
60 Day        16.1667             USD 4 month         0.3161
90 Day        16.4167             USD 6 month         0.4194
USD 12 month       0.6883
Y/Y Consumer Inflation March 2013 :             8.6%
FX Reserves: 16 May 2013 (USD bn)               48.480
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     158.32/42    158.00/10   158.30/40  157.35/45

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