A Review of the Nigerian Energy Industry

Financial market update

Financial markets02 July 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The World Bank Group’s board of executive directors has approved two International Development Association (IDA) credits amounting to 48 billion naira (US$300 million) “to boost the Government of Nigeria’s efforts to expand its agriculture sector while also providing food security and improved nutrition of the rural poor.” According a statement signed by a communication associate, Africa Region of the Bank, Bamidele Oladokun, the first IDA credit,16 billion naira ($100 million) will fund the Nigeria Agriculture Sector Development Policy Operation while the second IDA credit 32 billion naira ($200 million) will fund the third National Fadama project (Fadama III), supporting small holder farmers, organized in clusters in six states. This new project focuses on providing opportunity to Nigeria’s growing ranks of agribusiness entrepreneurs in a way that will generate higher incomes for farmers while also enhancing expansion in the industrial sector, ensuring food security and enhancing foreign exchange earnings.”

EUROPE: European stocks were little changed, following yesterday’s rally for the benchmark Stoxx Europe 600 Index, as investors awaited reports on U.K. construction activity and U.S. factory orders. U.S. index futures and Asian shares climbed.

CHINA: China’s overnight money-market rate dropped to a one-month low on speculation the central bank used targeted injections to ease the worst cash squeeze on record. Around 50 transactions for overnight funds in the interbank market were recorded at rates of 4% or less in the final 90 minutes of trading in Shanghai over the past 5 days, according to Bloomberg.

INDIA: Price swings in India’s bond market have widened to the most in a year as the rupee’s worst slide since 2011 threatens to fuel inflation, prompting money managers to cut investments and keep more cash.

BONDS: Fairly quiet session yesterday, rates down about 6bps on average on the curve. No significant flows from offshore players seen in the last trading week.

BILLS: Demand feeding into the short dates, stable and quiet session, Players expected to be filled at the OMO auction where the CBN offered 94 & 227 day bills, but the CBN failed to make any sale without citing a reason. Market rates likely to dip if no fresh supply comes from OMO auctions or if the sell off slows down from offshore.

MONEY MARKET: OBB and unsecured O/N rates went up to open the week at 10.15% and 10.25% respectively. The CBN came out to offer N100 billion in OMO bills but failed to make any sale”.

COMMODITIES: U.S. crude supplies probably dropped for the first time in four weeks as refineries boosted gasoline output to meet summer demand and pipelines in Canada were shut because of flooding, a Bloomberg survey showed. WTI crude for August delivery climbed $1.43, or 1.5 percent, to settle at $97.99 a barrel yesterday on the New York Mercantile Exchange.

Indicative Currency Exchange Rates
Bid          Offer

EURUSD         1.3069        1.3079
GBPUSD         1.5235         1.5245
USDJPY           99.81          100.21
USDCHF         0.9450       0.9470
GBPEUR         1.1810         1.1820
USDZAR         9.9000      10.0000
USDNGN        162.00        162.75
JPYNGN         1.6231         1.6731
CHFNGN        171.43         175.43
EURNGN        211.72         215.72
GBPNGN        246.81         250.81
ZARNGN         16.36           18.36

Commodities
U.S. crude supplies probably dropped for the first time in four weeks as refineries boosted gasoline output to meet summer demand and pipelines in Canada were shut because of flooding, a Bloomberg survey showed. WTI crude for August delivery climbed $1.43, or 1.5 percent, to settle at $97.99 a barrel yesterday on the New York Mercantile Exchange.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N              11.5000          USD 1 month         0.1958
7 Day            11.6250          USD 2 month         0.2369
30 Day         11.8750          USD 3 month         0.2731
60 Day         12.1250          USD 4 month         0.3126
90 Day         12.3750          USD 6 month         0.4144
USD 12 month        0.6902
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
    162.55/65   161.35/45   161.50/60     162.50/60

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