A Review of the Nigerian Energy Industry

Financial market update

finance03 June 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: Nigeria plans to sell inflation- linked bonds to address the concern of investors about the impact of inflation on the domestic debt market, the Debt Management Office said.“The inflation-linked bond is part of our 2013 to 2017 strategic plan,” Abraham Nwankwo, director general of the agency known as DMO, told reporters today in Enugu. Africa’s top oil producer is also planning to sell 80 billion naira ($505 million) in federal government bonds “in the form of global depository receipts” and will introduce “bond switches and securities lending” to deepen the market, Nwankwo said.

EUROPE: Euro-area manufacturing output contracted less than initially estimated in May, adding to signs the currency bloc’s economy is beginning to emerge from a record-long recession. A gauge of manufacturing in the 17-nation euro area increased to 48.3 last month from 46.7 in April, London-based Markit Economics said today. That’s above an initial estimate of 47.8 on May 23. The gauge has been below 50, indicating contraction, since July 2011.

INDIA: Most Indian stocks fell, paring a monthly advance, as earnings of some of the biggest companies lagged behind estimates and as regional equities declined. Two stocks declined for every one that rose on the S&P BSE Sensex, which retreated 0.1 percent to 20,119.51 at 12:10 p.m. in Mumbai.

CHINA: China granted 15.6 billion yuan ($2.54 billion) in quotas allowing offshore yuan to be invested in mainland capital markets in May, the biggest monthly amount this year, a jump that would help make the currency more attractive to foreigners.

Bonds – A very volatile start to Friday’s session in markets on news of some left hand side flow from offshore participants as they look to hedge against possible tightening by the US fed. With most of the offshore participants heavily invested in the Jan 22s, they sold off 45bps while the Jun 19s went up 54bps and the Apr 17s 37bps. Markets likely to continue to be volatile as markets struggle to find a new level. Some buying to close the session and we could possibly see it open that way on Monday.

Bills – Yields went up across the market today also following reaction of possible offshore selling in the markets. The CBN came out to offer N70billion in 83 day bills selling N44billion at 12.19% as the OMO auction was undersubscribed.

Money Market – OBB and unsecured O/N rates stable to close today at 10.75% and 11.00%.”

Indicative Currency Exchange Rates
Bid           Offer

EURUSD        1.3034        1.3044
GBPUSD         1.5264        1.5274
USDJPY          100.13        100.53
USDCHF        0.9545        0.9565
GBPEUR         1.1695         1.1705
USDZAR        10.0348     10.1348
USDNGN        158.10        158.60
JPYNGN         1.5789       1.6289
CHFNGN        165.64        169.64
EURNGN       206.07       210.07
GBPNGN        241.32       245.32
ZARNGN         15.76          17.76

International crude oil prices moderated, week to date, following sustained weak demand from developed economies as well as rising crude oil inventory in the world’s leading oil consumer, the United States.

Interest rates
NIBOR (%)                     LIBOR (%)

O/N              13.2083        USD 1 month     0.1937
7 Day            13.5000        USD 2 month    0.2310
30 Day         13.7083        USD 3 month     0.2757
60 Day         14.0000       USD 4 month     0.3181
90 Day         14.2917        USD 6 month     0.4162
USD 12 month   0.6907
Y/Y Consumer Inflation April 2013 :        9.1%
FX Reserves: 22 May 2013 (USD bn)      48.432
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     158.93/03        157.95/05         158.05/15      158.40/50

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