A Review of the Nigerian Energy Industry

Financial market update

Financial-markets321 May 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Investors’ interest and confidence in the Nigerian economy is surging, Minister of State for Finance, Dr. Yerima Lawan Ngama has disclosed. Citing 14 million hits and download of data from the website of the Nigerian Federal Office of Statistics, FOS, as a pointer, the minister observed too, that the percentage of non- filers in Nigeria of companies income tax regime declined from 54 per cent to 46 per cent last year.

EUROPE: European stocks retreated from the highest level in almost five years as Carnival Corp. led travel companies lower after cutting its forecasts. The Stoxx Europe 600 Index slipped 0.3 percent to 308.97 at 8:17 a.m. in London. The equity benchmark closed at the highest level since June 2008 yesterday as carmakers rose. the gauge has still rallied 96 percent since March 2009 as European Central Bank President Mario Draghi pledged to preserve the euro and the U.S. Federal Reserve embarked on three rounds of stimulus.

INDIA: India is using a surge in inflows into local bonds and equities to rebuild its currency reserves, boosting its ability to avoid a junk debt rating. The Reserve Bank of India bought $820 million more than it sold in March, the first net purchase since 2010, official data published May 13 show. RBI Governor Duvvuri Subbarao said this month India should be prepared for the probability of outflows next year as developed economies consider withdrawing stimulus measures.

CHINA: China’s stocks rose for a fifth day, sending the benchmark index to its longest winning streak in three months, as technology and solar companies climbed on improving earnings prospects. The Shanghai Composite Index gained 0.2 percent to 2,305.11 at the close, the highest level since March 25.

Bonds – Market sold off yesterday as some correction took place with most of the focus on the Jan 22s which was up 10bps on the day.

Bills – A bullish day in the bill markets on Monday ahead of the auction this week. With rates trading higher than expected closing levels at the auction market bought yesterday around the tenors to be offered.

Money Market – OBB and unsecured O/N rates came off to 13.00% on expectation that FAAC was to be paid yesterday or today. When it does eventually come in, rates will likely go down to 10.50%

CBN WDAS AUCTION- CBN offered $300m and sold $245.4m. Marginal rate at 155.74 naira with 19 banks participating.

Indicative Currency Exchange Rates
Bid         Offer

EURUSD         1.2876       1.2886
GBPUSD         1.5225        1.5235
USDJPY          102.71        103.11
USDCHF         0.9676      0.9696
GBPEUR         1.1823        1.1833
USDZAR         9.4694       9.5694
USDNGN        157.75        158.50
JPYNGN         1.5359        1.5859
CHFNGN        163.03       167.03
EURNGN        203.12       207.12
GBPNGN        240.17        244.17
ZARNGN        16.66          18.66

West Texas Intermediate crude traded near the highest price in almost two months before U.S. government data that is forecast to show the first back-to-back decrease in stockpiles this year. WTI for June delivery was at $96.77 a barrel, up 6 cents, in electronic trading on the New York Mercantile Exchange at 2:51 p.m. Singapore time.

Interest rates
NIBOR (%)                   LIBOR (%)

O/N             14.0833       USD 1 month         0.1961
7 Day           14.2917        USD 2 month        0.2335
30 Day        14.5417        USD 3 month        0.2731
60 Day        14.7917        USD 4 month        0.3161
90 Day        15.0750       USD 6 month        0.4184
USD 12 month      0.6873
Y/Y Consumer Inflation April 2013 :         9.1%
FX Reserves: 17 May 2013 (USD bn)         48.463
MPR                                                                  12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

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