A Review of the Nigerian Energy Industry

Financial market update

Financial-market28 June 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Minister of Agriculture, Dr. Akinwumi Adesina, in Katsina State recently said the proportion of hunger has been reduced to 8.5 per cent between 2011 and 2013. Speaking when he paid a courtesy call on Governor Ibrahim Shema, the minister said the proportion of hunger in the country was 19.3 per cent, but within three years, the ratio declined to 8.5 per cent.
Dr. Adesina also said that last year, farmers in the country produced nine million metric tons of assorted food, which was 85 per cent above the five million metric tons set for the country.

EUROPE: The United Kingdom is in danger of missing its greenhouse gas emission reduction targets after 2017 if it does not introduce more effective policies, an independent government advisory body said June 26. The Committee on Climate Change (CCC) based its warning on figures showing that, had unusual circumstances not existed, the rate of emissions cuts in 2012 would have been no more than half the annual 3 percent required to ensure steady progress to meet future targets.

CHINA: China’s benchmark interest-rate swap and interbank lending rate fell for a fifth day, the longest runs of declines in at least two months, on signs the central bank is adding funds selectively to ease a cash squeeze. About 10 transactions for overnight loans in the interbank market were recorded yesterday after 3:55 p.m. in Shanghai at rates of between 3.5 percent and 4 percent, according to data compiled by Bloomberg.

INDIA: India’s cabinet agreed to increase the price of natural gas as it seeks to augment exploration of the clean-burning fuel. The decision will benefit Reliance Industries Ltd. and Oil & Natural Gas Corp.

BONDS: Demand kicked into the market yesterday as players who had slowed their interest looking to a possible blowout at the T-bill auction came in today pulling yields down about 20bps on average. The Apr 17s and Jan 22s continue to be the only liquid stock trading in the secondary market at the moment and they dipped 26bps and 20bps respectively.

BILLS: Rates came off yesterday as the primary auction closed moderately lower than expectation and also in reaction to the fact that the CBN pegged its sale at OMO. Only N14.4billion was sold at 13.299% in 231day bills, indicating that they are unwilling to sell above current levels. That led to some reversal of the sell off which has been the market trend over the last two weeks. Rates came lower an average 30 bps across the maturities.

MONEY MARKET: OBB and unsecured O/N rates stable yesterday at 10.15% and 10.25% respectively.

COMMODITIES: WTI climbed, trimming Brent crude’s premium to a two-year low, as fewer Americans filed claims for unemployment benefits last week and consumer spending rebounded in May. WTI for August delivery rose $1.55, or 1.6 percent, to $97.05 a barrel on the New York Mercantile Exchange, the highest settlement since June 19.

Indicative Currency Exchange Rates
Bid           Offer

EURUSD           1.3045         1.3055
GBPUSD           1.5240          1.5250
USDJPY            98.89           99.29
USDCHF          0.9461          0.9481
GBPEUR          1.1820          1.1830
USDZAR          10.2600       10.3600
USDNGN         161.00          161.75
JPYNGN          1.6281          1.6781
CHFNGN         170.17          174.17
EURNGN         210.02         214.02
GBPNGN          245.36         249.36
ZARNGN          15.69           17.69

Commodities
WTI climbed, trimming Brent crude’s premium to a two-year low, as fewer Americans filed claims for unemployment benefits last week and consumer spending rebounded in May. WTI for August delivery rose $1.55, or 1.6 percent, to $97.05 a barrel on the New York Mercantile Exchange, the highest settlement since June 19.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N              10.3750          USD 1 month          0.1950
7 Day            10.8500         USD 2 month          0.2361
30 Day         11.6871           USD 3 month          0.2741
60 Day         11.9000          USD 4 month          0.3126
90 Day         12.1667           USD 6 month          0.4164
USD 12 month        0.6911
Y/Y Consumer Inflation April 2013 :                9.1%
FX Reserves: 06 Junel2013 (USD bn)             48.423
MPR                                                                        12.00%
Source: FMD and CBN
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria.

Fx
Hi                Low          Close       Prev.Close
USD/NGN
    161.75/85    161.30/40   161.50/50   161.40/50

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