A Review of the Nigerian Energy Industry

Financial market update

Financial markets13 June 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The president, Goodluck Jonathan, and his People’s Democratic Party (PDP) face various challenges to political stability that threaten to distract them from the reform agenda required to propel Nigeria’s development. The greatest single threat to political stability comes from the violent activities of militant Islamist fundamentalists in the north of the country. Dealing with these groups has been complicated by their evolution in recent years from a band of zealous, anti-establishment Islamists seeking to carve out an Islamic republic into a more sophisticated and loosely formed movement containing different elements, including jihadis, political activists and criminals.

The next national and state-level elections are due in 2015. The issue likely to dominate the elections is whether Mr Jonathan will seek another term in office. If he declares his intention to run again, this would almost certainly provoke ructions within the PDP especially the northern caucus that could lead to splits in the party. However, even if Mr Jonathan were to stand down, the competition to succeed him within the PDP would be fierce.

EUROPE: European stocks fell for a fourth day, with the benchmark index sliding to a seven-week low, as the World Bank cut its global growth forecast, and amid investor concern that central banks may scale back stimulus measures. U.S. futures and Asian shares also declined.

CHINA: China’s latest trade and manufacturing data trailed estimates, fuelling concerns the central bank will halt currency gains to revive exports and economic growth, according to Standard Chartered Plc.

BONDS – Extreme Volatility yesterday as yields traded up to breach 15% and fell sharply to close at around 14.50% as some demand hit markets towards the close. Rates gapped lower as market players who have felt the pain of the left hand side flows try to make some recoveries in the rally.

BILLS – Continued bearish markets yesterday as the bill market continues to see some significant left hand side flows. Rates up about 25bps across board on average today as bill rates reach their high for the year. No OMO auctions yesterday as liquidity levels are tight at the moment.

MONEY MARKET – OBB and unsecured O/N going up 300bps to 15.25% and 15.50% as market opened down N8 billion yesterday as liquidity dried up today. Being a WDAS day the repo window with the CBN was inaccessible to most institutions added to that the funding for large FX transactions helped push rates up

COMMODITIES
Brent has lost almost 8 percent this year, trading today at $102 a barrel on the London-based ICE Futures Europe exchange, as economic stagnation in Europe, slowing expansion in China and threats to recovery in the U.S. constrain fuel consumption.

Indicative Currency Exchange Rates
Bid         Offer

EURUSD           1.3350       1.3360
GBPUSD           1.5660       1.5670
USDJPY            94.12          94.52
USDCHF           0.9182       0.9202
GBPEUR           1.1712         1.1722
USDZAR           10.0900     10.1900
USDNGN          159.20        159.95
JPYNGN           1.6915         1.7415
CHFNGN          173.38         177.38
EURNGN          212.53         216.53
GBPNGN           249.31         253.31
ZARNGN           15.78           17.78

Commodities
Brent has lost almost 8 percent this year, trading today at $102 a barrel on the London-based ICE Futures Europe exchange, as economic stagnation in Europe, slowing expansion in China and threats to recovery in the U.S. constrain fuel consumption.

Interest rates
NIBOR (%)                                LIBOR (%)

O/N              15.7083                    USD 1 month           0.1948
7 Day            16.0417                    USD 2 month           0.2302
30 Day         16.2917                     USD 3 month           0.2732
60 Day         16.5417                     USD 4 month           0.3181
90 Day         16.7917                     USD 6 month           0.4109
USD 12 month         0.6832
Y/Y Consumer Inflation April 2013 :                           9.1%
FX Reserves: 06 Junel2013 (USD bn)                        48.423
MPR                                                                                   12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

Fx
Hi                 Low         Close       Prev.Close
USD/NGN
      160.10/20   159.45/55  159.95/05    159.45/55

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