A Review of the Nigerian Energy Industry

Financial market update

Financial-market05 June 2013, Sweetcrude, Lagos – Local and international financial products and services market update.
NIGERIA: Nigeria will privatise 10 more state power plants by mid-2014, advisers to the government said on Monday, as part of plans to overhaul the country’s electricity sector. President Goodluck Jonathan pledged nearly three years ago to privatise the bulk of Nigeria’s electricity sector, in an effort to end chronic power shortages that are the biggest brake on growth in Africa’s second largest economy. Although Jonathan’s roadmap is more than a year behind schedule, the government accepted deposits in April for 10 generation and five distribution companies that were created by unbundling the defunct state electricity firm.

EUROPE: European shares fell on Wednesday, extending a retreat from multi-year highs reached last month, as fresh concerns about a possible tapering in U.S. economic stimulus measures hit markets. The pan-European FTSEurofirst 300 index, which hit a 5-year high of 1,258.09 points in late May, fell 0.7 percent to 1,203.41 points, while the euro zone’s blue-chip Euro STOXX 50 index fell 0.8 percent to 2,733.56 points.

INDIA: Indian services activity expanded last month at its fastest pace since February as burgeoning new orders drove optimism to a five-month high, a business survey showed on Wednesday. The Services Purchasing Managers’ Index based on a survey of around 400 companies, rose to 53.6 last month from 50.7 in April. The April reading was the weakest since October 2011.

CHINA: Activity in China’s services sector expanded in May but at a pace little changed from the month before, the latest sign that the world’s No. 2 economy is struggling to regain momentum. The Purchasing Managers’ Index (PMI) for the services industry, released on Wednesday, inched up to 51.2 last month after seasonal adjustment, the second-lowest reading since August 2011. It had registered 51.1 in April.

Bonds – Still very volatile markets on Tuesday though liquidity is slowly returning. Very fragmented trading, still a lot of panic in the markets as flows on the left hand side attributed to offshore profit taking is causing a stir in markets.

Bills – Some retracement in rates yesterday after the spike in rates seen over the last two days. No OMO offerings from the CBN on Tuesday. The T-bill auction will be very instrumental in determining rate direction over the next few weeks.

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

Indicative Currency Exchange Rates
Bid         Offer

EURUSD          1.3075        1.3085
GBPUSD          1.5331         1.5341
USDJPY           99.73          100.13
USDCHF          0.9473       0.9493
GBPEUR          1.1726         1.1736
USDZAR          9.8672        9.9672
USDNGN         157.95         158.70
JPYNGN          1.5838         1.6338
CHFNGN         166.74         170.74
EURNGN        206.52         210.52
GBPNGN         242.15         246.15
ZARNGN         16.01            18.01

Brent Crude futures held above $103 a barrel on Wednesday, supported by an improved outlook for demand after South Korea boosted incentives for non-Middle East oil imports and data showed a surprise fall in U.S. crude stockpiles.

Interest rates
NIBOR (%)                   LIBOR (%)

O/N              11.1250       USD 1 month           0.1932
7 Day            11.4167       USD 2 month          0.2296
30 Day         11.6667       USD 3 month          0.2739
60 Day         11.9167       USD 6 month          0.4117
90 Day         12.1667      USD 12 month         0.6872
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.

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