A Review of the Nigerian Energy Industry

Financial market update

finance06 June 2013, Sweetcrude, Lagos – Local and international financial markets products and services update.
NIGERIA: Nigerian currency depreciated 0.1% to 158.60/$ yesterday, lowest level since April 26. Currency decline reflects increased corporate demand to cover import bills and other Forex obligations. Market rallied further on gains in largely capped stocks Nigerian stocks advanced for the third consecutive day this month, recording highest one-day rise since early May when the leading index of the bourse, All Share Index appreciated 3.18 percent.

EUROPE: The European Union is considering whether to hand oversight of the scandal-ridden London interbank offered rate to the European Securities and Markets Authority. The European Commission is proposing to move regulation of Libor away from the U.K. to Paris-based ESMA because the rates may affect banks, administrators and consumers in multiple member countries, according to a draft of the proposed regulation obtained by Bloomberg News.

INDIA: India’s bonds fell for a second day on concern the rupee’s slide to the lowest level in almost a year will increase the cost of imports and reduce the central bank’s room to cut interest rates..

CHINA: China Federation of Logistics & Purchasing (CFLP) and National Bureau of Statistics (NBS) jointly released that the China manufacturing Purchasing Managers’ Index (PMI) in May 2013 was 50.8 percent, up 0.2 points from the previous month. It was the eighth month that the index had stayed above the benchmark rate of 40 percent.

BONDS – The volatility continues markets still bearish and liquidity relatively thin. Very fragmented trading, still a lot of panic in the markets as flows on the left hand side attributed to offshore profit taking continues to cause a stir in markets. The T-bill auction results should prove informative and chart direction over the next couple of days.

BILLS – Volatile session in the markets today ahead of the long anticipated results of the auction which many market participants are using to gauge level of interest in market both from offshore and onshore players given the recent spike in yields.

MONEY MARKET – OBB and unsecured O/N rates stable to close yesterday at 14.25% and 14.50% liquidity tight on the back of funding for WDAS as the CBN window cannot be accessed on WDAS days

CBN WDAS AUCTION – CBN offered $300m and sold $300m. Marginal rate at 155.75 NAIRA with 20 banks participating.

Indicative Currency Exchange Rates
Bid       Offer

EURUSD        1.3117    1.3127
GBPUSD        1.5434   1.5444
USDJPY         99.18      99.58
USDCHF        0.9410   0.9430
GBPEUR        1.1810    1.1820
USDZAR        9.7400   9.8400
USDNGN       158.10    158.85
JPYNGN        1.5941     1.6441
CHFNGN       168.01    172.01
EURNGN      207.38    211.38
GBPNGN       244.01    248.01
ZARNGN       16.23       18.23

Brent futures steadied near $103 a barrel as worries the US Federal Reserve may scale back its stimulus countered the optimism steaming from a huge in Oil stockpiles in the world’s top consumers.

Interest rates
NIBOR (%)                     LIBOR (%)

O/N              14.4583        USD 1 month         0.1928
7 Day            14.7917         USD 2 month        0.2301
30 Day         14.9167         USD 3 month        0.2744
60 Day         15.1667         USD 4 month        0.3181
90 Day         15.7917         USD 6 month        0.4127
USD 12 month      0.6862
Y/Y Consumer Inflation April 2013 :           9.1%
FX Reserves: 06 April 2013 (USD bn)        48.433
MPR                                                                   12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

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