A Review of the Nigerian Energy Industry

Financial market update

Financial markets01 July 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: Nigeria is now the world’s second-largest importer of rice and sub-Saharan Africa’s biggest wheat and sugar buyer. Farmers in northern Nigeria once grew cotton, peanuts, cowpeas and rice for export. Half of Nigeria’s 160 million people dwell in rural areas and four-fifths of those live on less than a dollar a day, according to the United Nations’ International Fund for Agricultural Development. Nigeria attracted agricultural investment worth more than $8 billion in the past 18 months, Adesina said. Still, only 40 percent of its 21 million hectares (51.9 million acres) of arable land is cultivated.“Our strategy is to change the face of the north,” Adesina said. “We’re using agriculture for poverty reduction; our intention is to create wealth.”

EUROPE: The euro region’s record current- account surplus and slowing inflation are giving its shared currency the kind of strength that has made the yen a haven in times of financial and economic turmoil. The euro is poised for its biggest quarterly advance since December 2008, gaining 5 percent against a basket of 10 major currencies since the end of March, according to Bloomberg Correlation-Weighted Indexes.

CHINA: China’s new home prices jumped in June by the most since they reversed declines in December, defying the government’s tightened property curbs as increased sales supported developers’ efforts to avoid price cuts. Prices surged 7.4 percent last month from a year earlier to 10,258 yuan ($1,671) per square meter (10.76 square feet), SouFun Holdings Ltd., the nation’s biggest real estate website owner, said in a statement after a survey of 100 cities.

INDIA: Rice exports from India, the world’s second-largest grower, may decline this year from a record as buyers turn to cheaper supplies from Vietnam and Pakistan, according to a traders’ group.

BONDS: Yields dipped on Friday’s session with the focus on the Jan 22s which came off 29bps as the most significant mover of the day. Liquidity outside the 17s and 22s remains weak. We could possibly see rates lower next week as the market rallies with confidence returning as the left hand side flows seem to have dried up temporarily.

BILLS: Flat session for the most part on Friday, relatively quiet session. CBN came out to offer 230day bills, selling N54billion at 13.299% in an attempt to mop up liquidity.

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

COMODITIES: West Texas Intermediate fluctuated after a quarterly decline as manufacturing in China expanded at the slowest pace in four months, raising speculation demand may ease in the world’s second-largest oil consumer. WTI for August delivery was at $96.78 a barrel in electronic trading on the New York Mercantile Exchange, up 22 cent, at 3 p.m. Singapore time.

Indicative Currency Exchange Rates
Bid         Offer

EURUSD         1.3045        1.3055
GBPUSD          1.5187        1.5197
USDJPY           99.58         99.98
USDCHF         0.9441       0.9461
GBPEUR         1.1810        1.1820
USDZAR         10.2000    10.3000
USDNGN        162.00       162.75
JPYNGN         1.6268       1.6768
CHFNGN        171.59        175.59
EURNGN        211.33       215.33
GBPNGN        246.03       250.03
ZARNGN        15.88          17.88

Commodities
West Texas Intermediate fluctuated after a quarterly decline as manufacturing in China expanded at the slowest pace in four months, raising speculation demand may ease in the world’s second-largest oil consumer. WTI for August delivery was at $96.78 a barrel in electronic trading on the New York Mercantile Exchange, up 22 cent, at 3 p.m. Singapore time.

Interest rates
NIBOR (%)                    LIBOR (%)

O/N              10.4550        USD 1 month        0.1950
7 Day            10.7500        USD 2 month       0.2356
30 Day         11.0000        USD 3 month       0.2731
60 Day         11.2500         USD 4 month       0.3126
90 Day         11.5000         USD 6 month       0.4134
USD 12 month      0.6856
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
   162.60/70    161.50/60    162.50/60    161.50/60

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