A Review of the Nigerian Energy Industry

Financial market update

Financial-markets324 May 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The World Bank has said it will help Nigeria to generate additional 2,000 megawatts of electricity in the next two years through support to independent power producers. The Country Director for Nigeria, World Bank, Ms. Marie-Francoise Marie-Nelly also said the bank, which is seeking approval for projects worth $1.5bn in the country, planned to rehabilitate four dams in the country to help boost agricultural production through irrigation.

EUROPE: The European Union wants to establish an investment agreement with China aimed at deepening economic ties, without venturing into free trade negotiations, the bloc’s executive announced Thursday. The EU crucially wants better access to the Chinese market, in which foreign investors still face many hurdles and restrictions. Protection for investments is also a key aspect of the deal. In return, the agreement would guarantee the access and protection that China is already granted through bilateral arrangements with all EU states except Ireland, by replacing these with a single international deal.

INDIA: India’s rupee is poised for a third weekly decline after the Federal Reserve indicated it may slow debt purchases, fuelling concern that fund flows to emerging markets will reduce. The rupee weakened 1.5 percent this week and 0.3 percent today to 55.75 per dollar as of 10:18 a.m. in Mumbai, according to data compiled by Bloomberg.

CHINA: China’s stocks rose, lifting the Shanghai Composite Index from its biggest slump in a month, as gains by health-care and technology stocks overshadowed losses among property developers. The Shanghai Composite Index closed 0.6 percent higher at 2,288.53, taking its weekly gain to 0.3 percent.

Bonds – An initial sell off on Thursday, yields down 10bps on the 19s and 22s and 20bps on the 17s in the significant moves of the day. Driven by profit taking after the rally on Wednesday, but markets largely stable to close the day.

Bills – With the auction closing slightly higher than expectation, the market sold off yesterday in trading. The CBN came out to offer N70bio each in 182 and 196 days bills to try and mop up the excess liquidity in the markets.

Money Market – OBB and unsecured O/N rates stable at 10.25% with the market being kept liquid by the FAAC inflow of N272 billion which came in late Monday.

Indicative Currency Exchange Rates
Bid        Offer

EURUSD       1.2926     1.2936
GBPUSD        1.5089    1.5099
USDJPY        101.64      102.04
USDCHF      0.9683     0.9703
GBPEUR       1.1673      1.1683
USDZAR       9.5491     9.6491
USDNGN      157.75      158.50
JPYNGN       1.5520     1.6020
CHFNGN      162.91      166.91
EURNGN      203.91     207.91
GBPNGN      238.03     242.03
ZARNGN        16.52        18.52

Interest rates
NIBOR (%)                   LIBOR (%)

O/N              10.4583      USD 1 month      0.1932
7 Day            10.8333      USD 2 month     0.2305
30 Day         11.0833       USD 3 month     0.2727
60 Day         11.3750       USD 4 month     0.3156
90 Day         11.6250       USD 6 month     0.4174
USD 12 month   0.6858
Y/Y Consumer Inflation April 2013 :        9.1%
FX Reserves: 21 May 2013 (USD bn)      48.443
MPR                                                               12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

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