A Review of the Nigerian Energy Industry

Financial market update

Financial markets04 June 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Central Bank of Nigeria (CBN) on Wednesday said it had commenced registration of agent banks to drive its financial inclusion strategy. Mr Paul Eluhaiwe, CBN Director of Development Finance, disclosed this at 18th seminar for finance correspondents and business editors in Abia State. The theme of the seminar is “Financial Inclusion Initiatives in Nigeria: Issues, Challenges and Prospects”. Eluhaiwe said that more agent banks would be registered before the end of the year. NAN reports that agent banking was introduced in the country last year as a measure to further promote the financial inclusion strategy of the apex bank. Eluhaiwe stressed the importance of financial inclusion, saying that the financial inclusion policy was aimed at reducing the percentage of financially excluded in the country.

EUROPE: European stocks advanced, halting a two-day decline, as investors awaited interest-rate decisions from the European Central Bank and the Bank of England. U.S.index futures and Asian shares rose. The ECB will leave its benchmark interest rate unchanged at a record low of 0.5 percent today, according to 61 of 62 forecasts in a Bloomberg survey of economists. The central bank announces the decision at 1:45 p.m. in Frankfurt.

CHINA: China’s benchmark money-market rate dropped for a 10th day, the longest stretch in almost 14 months, as the central bank refrained from draining funds from the financial system in the wake of the worst cash crunch on record. “The market is reassured that the central bank will come to the rescue if liquidity gets tight,” said Song Qiuhong, a bond analyst at Foshan Shunde Rural Commercial Bank Co. in Foshan, a city in the southern province of Guangdong.

With bonds trading a tight range over the last week and ahead of the US nonfarm payroll data expected this Friday, some de risking saw yields trade up 18bps on average across the Jan 22s and Apr 17s. Local market players now tracking this indicator and the performance of the US economy as it has wider implications to the local market

The CBN for a third day failed to sell any OMO bills after coming out to offer N100billion in 78 and 92 day bills. This has fuelled demand feeding into the secondary market as players with significant pools of liquidity look here to fill their interest.

OBB and unsecured O/N rates stable yesterday at 10.15% and 10.25% respectively. The market remains liquid as the CBN fails to sell OMO bills after offering N100bio yet again yesterday.

Indicative Currency Exchange Rates
Bid          Offer

EURUSD         1.3000       1.3010
GBPUSD          1.5253       1.5263
USDJPY           99.65         100.05
USDCHF         0.9440       0.9460
GBPEUR          1.1820       1.1830
USDZAR          10.0500    10.1500
USDNGN         159.50       160.00
JPYNGN          1.6006       1.6506
CHFNGN         168.96       172.96
EURNGN        207.35        211.35
GBPNGN        243.29        247.29
ZARNGN         15.87          17.87


WTI crude traded near the highest price in 14 months as U.S. stockpiles shrank the most this year and the ouster of Egypt’s president fanned concern unrest will disrupt Middle East oil supply. WTI for August delivery was at $101.30 a barrel, up 6
cents, in electronic trading on the New York Mercantile Exchange at 2 p.m. Singapore time.

Interest rates
NIBOR (%)                        LIBOR (%)

O/N              10.2500            USD 1 month           0.1937
7 Day            10.7500            USD 2 month           0.2310
30 Day         11.0000            USD 3 month           0.2757
60 Day         11.2500             USD 4 month          0.3181
90 Day         11.5000            USD 6 month           0.4162
USD 12 month         0.6907
Y/Y Consumer Inflation April 2013 :                   9.1%
FX Reserves: 22 May 2013 (USD bn)                  48.432
MPR                                                                            12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria.

                           Hi                Low           Close       Prev.Close
USD/NGN  161.50/60   160.00/10   160.25/35   160.25/35

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