A Review of the Nigerian Energy Industry

Financial market update

Financial markets12 November 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Federal Government said on Monday in Abuja that in the last three years, over N3.2tn ($20bn) Foreign Direct Investment had been attracted into the Nigerian economy. The N3.2tn investments represent 10 percent of the entire African’s continent’s FDI, reports show.

BONDS: The bond market closed yesterday with a slight increase in yields across all maturities with average now about 12.63%. We saw the greatest increase in the 4y and 20Y bond yield closing about 9bps higher. We still maintain our bullish view on bonds, expecting a decline in yields on the back of the high demand (majorly from the PFA) in the Bond auction coming up on Wednesday.

BILLS: We had a quiet day yesterday, seeing some demand from locals tipping yields slightly lower again. We expect this trend to continue today.

MONEY MARKET: OBB rates and ON rates remained unchanged at 10.50%. Liquidity in the system still at about 372Bio.

CBN RDAS AUCTION: CBN offered $300 million and sold $299.9 million. Marginal rate was N155.71/US$ (excluding CBN 1% Commission). 19 banks bid.

US: Longer-term Treasuries are set to deliver the world’s biggest loss for sovereign debt this year as stronger-than-expected economic data out of the U.S. add to the case for the Federal Reserve to reduce asset purchases. Benchmark yields rose to an almost eight-week high, and U.S. bonds with maturities longer than 10 years have slid 11 percent this year, reports show.

EUROPE: Germany came under renewed pressure from the European Union to boost domestic spending as the EU’s top economy official said higher German demand would help temper the euro’s strength and reiterated a threat to open an in-depth probe of the country’s trade surplus. The German current-account surplus, at 7 percent of gross domestic product, is the second-highest in the euro area, and EU Economic and Monetary Affairs Commissioner, Olli Rehn said an increase in the nation’s domestic demand would bring the balance down and help struggling EU nations boost their exports.

CHINA: China’s broadest measure of new credit fell by more than estimated in October, suggesting authorities are trying to keep shadow-finance risks in check as leaders map out a blueprint to sustain growth. Aggregate financing was 856.4 billion Yuan ($140.6 billion), the People’s Bank of China said yesterday in Beijing, below all nine projections in a Bloomberg News survey. New local-currency loans of 506.1 billion Yuan compared with the 580 billion Yuan median estimate of analysts. M2, the broadest measure of money supply, rose 14.3 percent from a year earlier.

COMMODITIES: West Texas Intermediate fell from the highest closing price this month amid speculation crude stockpiles rose to the most since June in the U.S., the world’s biggest oil consumer. WTI for December delivery dropped as much as 34 cents to $94.80 a barrel in electronic trading on the New York Mercantile Exchange.

Indicative Currency Exchange Rates
Bid          Offer

EURUSD        1.3383        1.3433
GBPUSD        1.5963         1.6013
USDJPY          99.65         100.05
USDCHF       0.9214         0.9244
GBPEUR        1.1928         1.1938
USDZAR      10.3760       10.5260
USDNGN      158.50         158.80
JPYNGN       1.5906         1.6406
CHFNGN      172.02         176.02
EURNGN      212.12          216.12
GBPNGN      253.01          257.01
ZARNGN       15.28            17.28

Commodities

West Texas Intermediate fell from the highest closing price this month amid speculation crude stockpiles rose to the most since June in the U.S., the world’s biggest oil consumer. WTI for December delivery dropped as much as 34 cents to $94.80 a barrel in electronic trading on the New York Mercantile
Exchange.

Interest rates
NIBOR (%)                     LIBOR (%)

O/N               10.7917        USD 1 month          0.1685
7 Day             11.0833       USD 2 month          02073
30 Day          11.7500       USD 3 month          0.2393
60 Day         12.1250        USD 6 month          0.3546
90 Day         12.5417        USD 12 month         0.5950
Y/Y Consumer Inflation September 2013 :      8.0%
FX Reserves: 06 November 2013 (USD bn)  45.005
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    
159.15/25    158.55/65    158.95/05   158.50/60

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