A Review of the Nigerian Energy Industry

Financial market update

Financial markets01 August 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: Nigerian’s foreign exchange reserves fell 2.24 percent month on month to $46.96 billion by July 29, central bank data showed on Wednesday. Africa’s top crude exporter’s forex reserves stood at $48.04 billion on June 28. The data showed that the reserve had however risen by about 22.27 percent year on year, compared with $36.50 billion in the same period last year. Nigeria’s reserves have come under pressure from attempts by central bank to support the local currency, which has weakened by around 1.6 percent on persistent strong demand from importers and offshore investors existing the local bond market.

US:. Global stocks rose in July, beating bonds and the dollar by the most since at least January, while commodities had the best returns in 11 months as corporate profits topped analysts’ estimates and investors reversed bets on when the Federal Reserve will reduce stimulus. The MSCI All-Country World Index of equities in 45 markets climbed 4.8 percent, including dividends, as the Standard & Poor’s 500 Index rose to a record. Treasury yields dropped from a two-year high after Fed Chairman Ben S. Bernanke said July 17 that the end of bond purchases is not on a preset course, allaying speculation the central bank was preparing to phase out, or taper, stimulus as U.S. payrolls increased.

EUROPE: For investors waiting for Europe’s long-delayed recovery to appear, no news from Mario Draghi today may be a good sign. The task for Draghi will be to foster growth while assuring financial markets that the ECB won’t tighten monetary policy too soon, as it did in 2011. While euro-area manufacturing unexpectedly expanded in July for the first time in two years and business confidence improved for a third month, lending to companies and households across the 17-member bloc fell the most on record in June.

INDIA: The Reserve Bank of India tightened the cash supply last month to buoy the rupee and said July 30 the measures will be rolled back as the currency stabilizes, leaving its key policy rate unchanged the same day. The monetary authority also lowered its growth forecast to 5.5 percent for the year through March 2014 from 5.7 percent.

CHINA: Asian shares and commodities edged higher today after China’s official manufacturing activity data came in better than expected easing some concerns of a sharp slowdown in the world’s second largest economy.

COMMODITIES: WTI oil advanced for a second day, extending the biggest monthly gain since last August as manufacturing unexpectedly strengthened in China, the world’s second-largest crude consumer. WTI for September delivery climbed as much as 69 cents to $105.72 a barrel in electronic trading on the New York Mercantile Exchange.

Indicative Currency Exchange Rates
Bid      Offer

EURUSD     1.3242   1.3252
GBPUSD      1.5159   1.5169
USDJPY        98.61    99.01
USDCHF      0.9301  0.9321
GBPEUR      1.1448   1.1458
USDZAR      9.9010   10.0010
USDNGN     160.00   160.50
JPYNGN      1.6226    1.6726
CHFNGN     172.02    176.02
EURNGN    211.87     215.87
GBPNGN    242.54    246.54
ZARNGN    16.16       18.16

Commodities
WTI oil advanced for a second day, extending the biggest monthly gain since last August as manufacturing unexpectedly strengthened in China, the world’s second-largest crude consumer. WTI for September delivery climbed as much as 69 cents to $105.72 a barrel in electronic trading on the New York Mercantile Exchange.

Interest rates
NIBOR (%)                      LIBOR (%)

O/N              10.9167          USD 1 month        0.1872
7 Day            11.5000         USD 2 month       0.2275
30 Day         11.7500          USD 3 month       0.2650
60 Day         12.0000        USD 6 month        0.3970
90 Day         12.3333         USD 12 month       0.6732
Y/Y Consumer Inflation June 2013 :     8.4%
FX Reserves: 29 July 2013 (USD bn)    46.96
MPR                                                             12.00%
Source: FMD and CBN
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.

 

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