A Review of the Nigerian Energy Industry

Financial market update

Financial markets09 October 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: According to the Financial Markets Dealers’ Association report, deposit taking and lending rates of deposit money banks last month increased slightly compared to preceding month, following the increase in CRR by the CBN. Deposit rates inched up slightly as the need to attract more private sector deposit intensified while keen competition for public sector deposits persist in the light of recent policy review.

BONDS: Market activity slowed yesterday to a halt in comparison with the previous day’s trading as there was no significant movement in yields. Yields on the shorter-term instrument declined by 0.02% while the yields on the longer-term instruments traded flat.

BILLS: Yields declined by an average of 0.01% to leave the average yield at 11.58% as yields on all tenors declined save for the 1M and 12M tenors which gained by 0.21% and 0.06% respectively.

MONEY MARKET: OBB and ON closed higher yesterday to close at 11.25% and 11.5% respectively.

US: President Obama will nominate Federal Reserve Vice Chair Janet Yellen to be the next head of the U.S. Central Bank on Wednesday, putting her on course to be the first woman to lead the institution in its 100-year history. If confirmed by the U.S. Senate, she would provide continuity with the policies the Fed has established under Bernanke and would be expected to tread carefully in winding down the extraordinary stimulus the central bank put in place to shore up the world’s largest economy. U.S. stock index futures rose and the dollar slipped against the Euro on the news of Yellen’s pending nomination.

EUROPE: Ireland’s international lenders have given it the green light to ease up on austerity in its 2014 budget, the government said on Tuesday, easing pressure on an economy that officials admitted would grow far slower than previously thought. Ireland has been the euro zone’s bailout success story and is on track to exit its international aid programme later this year, while other bailed-out countries struggle to hit their deficit targets. But the economy remains extremely fragile with the finance ministry on Tuesday slashing its 2013 growth forecast to 0.2 percent from an estimate of 1.3 percent made six months ago on shrinking domestic demand exports.

CHINA: China’s annual economic growth is forecast to have quickened in the September quarter after slowing through the first half of the year, but the pick-up is expected to be short-lived as the government pushes on with its reform agenda. Beijing has a growth target of 7.5 percent for 2013, which would be the weakest rate in more than 20 years, and has repeatedly said it would accept slower growth as it tries to restructure the economy to be driven by consumer demand, rather than investment, credit and exports.

COMMODITIES: WTI crude swung between gains and losses as U.S. lawmakers took steps toward raising the government’s debt limit, reducing the likelihood of a default that slows economic growth and saps fuel demand. WTI for November delivery was at $103.38 a barrel, down 11 cents in electronic trading on the New York Mercantile Exchange.

Indicative Currency Exchange Rates
Bid       Offer

EURUSD         1.3550     1.3600
GBPUSD          1.6055    1.6105
USDJPY            97.42      97.82
USDCHF          0.9070    0.9100
GBPEUR          1.1849      1.1859
USDZAR          9.9638    10.1138
USDNGN          159.70    160.45
JPYNGN           1.6393    1.6893
CHFNGN          176.07    180.07
EURNGN          216.39    220.39
GBPNGN          256.40    260.40
ZARNGN            16.03     18.03

Commodities
WTI crude swung between gains and losses as U.S. lawmakers took steps toward raising the government’s debt limit, reducing the likelihood of a default that slows economic growth and saps fuel demand. WTI for November delivery was
at $103.38 a barrel, down 11 cents in electronic trading on the New York Mercantile Exchange.

Interest rates
NIBOR (%)                       LIBOR (%)

O/N              12.3750           USD 1 month       0.1740
7 Day            13.0000          USD 2 month      0.2155
30 Day         13.7083           USD 3 month      0.2436
60 Day         13.9583           USD 6 month      0.3662
90 Day         14.2083          USD 12 month     0.6234
Y/Y Consumer Inflation August 2013 :         8.2%
FX Reserves: 02 October 2013 (USD bn)   45.388
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   160.20/30   159.45/55   159.70/80   160.25/35

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