A Review of the Nigerian Energy Industry

Financial market update

Financial markets25 June 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Naira pared its biggest loss since September after the Nigerian central bank sold the most dollars in 20 months at its regular auction today. The Central Bank of Nigeria sold $500 million, the highest amount since Oct. 12, 2011, according to data on its website. The regulator auctions dollars on Mondays and Wednesdays to support the local currency. Foreign investors were said to exit Africa’s biggest oil producer boosting dollar demand that earlier weighed on the Naira.“The pressure on the currency will persist in the absence of foreign capital inflows, and especially if there are further outflows.” “The naira is under pressure from a combination of falling oil production and portfolio outflows as foreign investors adjust their positions in light of Fed comments last week,”

EUROPE: Spanish officials predicting an end in the next quarter to the worst recession in the country’s democratic history are pinning that hope on its export recovery as a consumer slump shows little sign of abating. With record unemployment weighing on domestic demand, supermarket chain Eroski sought to kickstart sales last week by cutting prices of 2,000 branded products from olive oil to diapers in more than a third of its 1,500 stores. Such tactics show the pain retailers are willing to endure to revive spending in an economic downturn that started in 2008

CHINA: China’s growth worries and credit tightening sent ripples across global stocks on Monday with major U.S. stock indices, in particular, dropping 1 percent on the back of a 2-percent decline last week..

INDIA: Global funds have cut rupee debt holdings by $5.4 billion since May 22, when Federal Reserve Chairman Ben S. Bernanke first signaled stimulus could be scaled back, and are set to end 12 months of net buying of Indian stocks, exchange data show

BONDS: Yields went up about 17bps on average during yesterday’s session, average volume traded so it is likely that sentiment was driving the move as opposed to flow from any de-risking.

BILLS: Bearish markets still as the sell off continued again yesterday, the CBN came out to offer N100billion in OMO bills but didn’t make any sales. Rates up about 55bps on the longer dated maturities and about 70bps on the short dated bills. Market players are looking to the auction this week with N60billiopn on offer on the 364day bill, it will be instructive to see how much demand will go into the auction and where it cuts.

MONEY MARKET: OBB and unsecured O/N rates eased further today to close at 10.15% and 10.25%. The FAAC payments hit the system late Friday and market opened liquid to start the week. ”

COMMODITIES: Brent for August settlement was at $101.31 a barrel, up 15 cents on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $6.01 to WTI. The spread was $5.98 yesterday, the narrowest based on closing prices since January 2011.

Indicative Currency Exchange Rates
Bid          Offer

EURUSD         1.3132         1.3142
GBPUSD         1.5401         1.5411
USDJPY          98.75           99.15
USDCHF         0.9380       0.9400
GBPEUR         1.1810         1.1820
USDZAR         9.7400       9.8400
USDNGN        159.25        160.00
JPYNGN         1.6135         1.6635
CHFNGN        169.78        173.78
EURNGN       208.95        212.95
GBPNGN        245.26        249.26
ZARNGN         16.35          18.35

Commodities
Brent for August settlement was at $101.31 a barrel, up 15 cents on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $6.01 to WTI. The spread was $5.98 yesterday, the narrowest based on closing prices since January 2011

Interest rates
NIBOR (%)                        LIBOR (%)
O/N               12.5833           USD 1 month          0.1930
7 Day             12.8715            USD 2 month         0.2328
30 Day          13.2500           USD 3 month         0.2727
60 Day          13.5000           USD 4 month         0.3096
90 Day          13.7500           USD 6 month         0.4138
USD 12 month       0.6829
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   161.85/95        158.98/08     159.00/10      160.00/10

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