A Review of the Nigerian Energy Industry

Financial market update

Financial markets04 June 203, Sweetcrude, Lagos – Local and international financial markets products and services update.
NIGERIA: Nigeria’s central bank may raise the benchmark interest rate if government spending increases before elections in 2015, Governor Lamido Sanusi said. While Finance Minister Ngozi Okonjo-Iweala has curbed expenditure, there will be probably more tightening “if the politicians spend money,” Sanusi said today in an interview on CNBC Africa television.The Central Bank of Nigeria left its policy rate unchanged at a record high of 12 percent for the 10th consecutive meeting on May 21, concerning spending is poised to rise as the government battle Islamist insurgents in the northeast.

EUROPE: Greek government bonds advanced after a U.S. investment firm offered to buy as much as 2.9 billion euros ($3.8 billion) of the securities. The price of Greek 30-year bonds was less than 47 cents on the euro, reflecting concern that a shrinking economy and political strife over budget cuts will hamper efforts to repay debt.

INDIA: India, the world’s third-largest coal consumer, imported 51 percent more of the fuel in April compared with a year ago as rising summer temperatures boosted demand for power generation, shipping data show.

CHINA: Chinese manufacturing indexes showed small businesses struggling, sapping momentum in the economy and underscoring the need for the government to shift support away from larger, state-backed companies

BONDS – Continued volatility in yesterday’s session in a continuation of the sell off from Friday. Demands also returning to markets as the yield levels begin to look interesting after the spike seen on Friday and in early trading today based on some left hand side flow attributed to offshore profit taking.

BILLS – Yields continued their upward trend in the market yesterday in continued reaction to offshore selling in the markets. The CBN came out to offer N50billion in 88 day bills, they failed to make any sales as the auction came in undersubscribed.

MONEY MARKET – OBB and unsecured O/N rates stable to close yesterday at 10.75% and 11.00%. The CBN came out to offer OMO bills today but failed to make any sales. ”

CBN WDAS AUCTION – CBN offered $350m and sold $350m. Marginal rate at 155.74 NAIRA with 20 banks participating.

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

Brent oil for July settlement rose $1.67, or 1.7 percent, to end at $102.06 a barrel on the London-based ICE Futures Europe exchange after closing May 31 at the lowest settlement since May 1. Volume for all contracts was 0.5 percent above the 100-day average. Brent’s premium over WTI rose to $8.61 from the previous day’s $8.42.

Interest rates
NIBOR (%)                  LIBOR (%)

O/N               12.4583     USD 1 month         0.1937
7 Day             12.7083     USD 2 month        0.2310
30 Day          12.8750     USD 3 month        0.2757
60 Day          13.1250      USD 4 month        0.3181
90 Day          13.3750      USD 6 month        0.4162
USD 12 month      0.6902
Y/Y Consumer Inflation April 2013 :          9.1%
FX Reserves: 31 May 2013 (USD bn)         48.410
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     158.40/50    158.00/10    158.18/28    158.30/40

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