A Review of the Nigerian Energy Industry

Financial market update

Financial-market19 June 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Chartered Institute of Stockbrokers, CIS, has said the capital market is big enough to raise funds to finance any project in the country. Speaking at the press conference ahead of the upcoming workshop of the body, Chairman of CIS, Mr. Ariyo Olushekun said the Nigerian Stock Exchange, NSE, has the capacity for any company in the country to raise funds needed to grow their businesses. He said before now people did not believe that Nigerian banks could fund the kind of project they are funding today, adding that the same thing is applicable to the capital market. The National Pension Commission, PENCOM, has been able to build pension funds up to N3.4 trillion and challenge us to come out with products (instruments) through which they can invest this fund.

EUROPE: European car sales fell to a 20-year low in May as record joblessness caused by a recession in the euro area reduced demand at PSA Peugeot Citroen, Renault SA, Fiat SpA and General Motors Co. Registrations dropped 5.9 percent to 1.08 million vehicles from 1.15 million a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today.

INDIA: A panel set up by India’s finance ministry has recommended increasing foreign investment limits in industries including defense, telecom and retail, said three government officials. The review of investment limits is part of Finance Minister Palaniappan Chidambaram’s effort to attract foreign investment to bridge the record current-account deficit and revive economic growth from the slowest in a decade.

CHINA: Foreign direct investment in China rose in May by the least in four months, a sign of concern that growth is slowing in the world’s second-biggest economy.

BONDS: With investors confidence rising and in the absence of any major left-hand side flows the rally continued yesterday. Yields down about 30bps on the Jan 22s and about 45 on the Jun 19s in the biggest moves of yesterday.

BILLS: Slight reversal in trend as some profit taking stemmed the downward movement in rates yesterday. Volatility across the maturities. Rates closing up about 40bps on average across the maturities. Bill auction today likely to close higher than current levels as the markets anticipates.

MONEY MARKETS: OBB and unsecured O/N up between 75 and 100bps to close at 13.75% and 14.00% respectively as liquidity levels drop and in the wake of the FAAC payment which is being delayed by political wrangling.

COMMODITIES: West Texas Intermediate crude rose, approaching a nine-month high, as the Syrian conflict bolstered concern that the flow of supplies from the Middle East may be disrupted and on signs that economic growth is accelerating. Futures advanced to within 25 cents of yesterday’s peak of $98.74 a barrel, the most since Sept. 17.

Indicative Currency Exchange Rates
Bid        Offer

EURUSD       1.3401      1.3411
GBPUSD       1.5634      1.5644
USDJPY        94.91        95.31
USDCHF      0.9192      0.9212
GBPEUR      1.1700       1.1710
USDZAR      10.0100    10.1100
USDNGN     158.45      158.95
JPYNGN      1.6695      1.7195
CHFNGN     172.38      176.38
EURNGN     212.34      216.34
GBPNGN     247.72      251.72
ZARNGN      15.83        17.83

Commodities
West Texas Intermediate crude rose, approaching a nine month high, as the Syrian conflict bolstered concern that the flow of supplies from the Middle East may be disrupted and on signs that economic growth is accelerating. Futures advanced to within 25 cents of yesterday’s peak of $98.74 a barrel, the most since Sept. 17.

Interest rates
NIBOR (%)                   LIBOR (%)

O/N              14.6250      USD 1 month        0.1916
7 Day            14.7500      USD 2 month       0.2305
30 Day         15.0000     USD 3 month        0.2722
60 Day         15.2500     USD 4 month        0.3181
90 Day         15.5000     USD 6 month        0.4092
USD 12 month      0.6681
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
    161.10/20    159.95/05    159.95/05   159.98/08

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