A Review of the Nigerian Energy Industry

Financial market update

Financial markets17 June 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: Nigeria’s inflation rate fell to 9 percent in May, the National Bureau of Statistics said. The inflation rate of Africa’s top oil producer fell from 9.1 percent in April, the Abuja-based statistics office said on Sunday in an e-mailed report. The Central Bank of Nigeria, which targets an inflation rate of less than 10 percent, may raise its policy rate if government spending increases before the elections in 2015, Governor Lamido Sanusi said on June 3. The bank’s Monetary Policy Committee held its benchmark interest rate at a record 12 percent for the 10th consecutive meeting on May 21, concerned spending is poised to rise as the military steps up operations in the northeast against Islamist militants.

EUROPE: European stocks advanced, after the Stoxx Europe 600 Index posted its longest streak of weekly losses in 14 months, as investors awaited signals from the Federal Reserve on stimulus measures. The Stoxx 600 rose 0.6 percent to 292.84 at 8:09 a.m. in London.

INDIA: India left interest rates unchanged after a plunge in the rupee to a record low threatened to stoke inflation in Asia’s third-largest economy. Governor Duvvuri Subbarao kept the repurchase rate at 7.25 percent, a Reserve Bank of India statement showed in Mumbai today. The rupee’s fall of about 6 percent versus the dollar this quarter is among the steepest in Asia and may fan import costs in a country with the second-highest consumer inflation in the Group of 20 nations. The currency has been weighed down by an unprecedented current-account deficit that Subbarao has said is the biggest risk in an economy hurt by moderating investment. The rupee fell 0.5 percent to 57.8250 per dollar as of 11:04 a.m. in Mumbai. It touched an all-time low of 58.985 on June 11.

CHINA: China’s stocks fell for the ninth time in 10 days, dragged down by property developers and material producers, after Beijing tightened rules for real estate projects to contain a rebound in home prices. The Shanghai Composite Index slipped 0.3 percent to 2,156.22 at the close, with trading volumes 24 percent lower than the 30-day average.

Bonds – Volatility persists after the monthly bond auction, selling interest at market open was outrun by demand midday Friday trading bond yields slightly lower than market open. Volatile week ahead. Inflation news on Monday.

Bills – Takers hit hard on bill yields in the market on Friday in reaction to the announcement of Q3 t-bill issuance calendar, 1yr bill issuance volume down ngn230 bio in comparison to offer size in Q2 2013, bill direction not sustainable due to the currency depreciation.

Money Market – OBB and ON rate up 25bps to close last week at 10.75% and 11.00%, ngn depreciation continued closing on Friday at 162.60/70 a 10-month low against the USD. Volatile week ahead.

Indicative Currency Exchange Rates
Bid         Offer

EURUSD          1.3339       1.3349
GBPUSD          1.5718        1.5728
USDJPY            94.91         95.31
USDCHF          0.9226      0.9246
GBPEUR          1.1782        1.1792
USDZAR          9.8662      9.9662
USDNGN         162.10       162.85
JPYNGN          1.7079       1.7579
CHFNGN         175.70       179.70
EURNGN         216.23       220.23
GBPNGN         254.79       258.79
ZARNGN         16.43         18.43

West Texas Intermediate crude traded near the highest price in more than four months on renewed speculation that unrest in Syria will spread to other parts of the Middle East and disrupt supplies. WTI for July delivery was at $97.81 a barrel, down 4 cents in electronic trading on the New York Mercantile Exchange at 3:01 p.m. Singapore time.

Interest rates
NIBOR (%)                    LIBOR (%)

O/N               11.7917       USD 1 month         0.1925
7 Day            12.1250       USD 2 month        0.2302
30 Day         12.4583       USD 3 month        0.2727
60 Day         12.6250       USD 6 month        0.4112
90 Day         12.8750       USD 12 month      0.6691
Y/Y Consumer Inflation April 2013 :          9.1%
FX Reserves: 13 June 2013 (USD bn)        48.479
MPR                                                                  12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

Hi                 Low         Close       Prev.Close
162.60/70   161.05/15   162.60/70    160.20/30

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