A Review of the Nigerian Energy Industry

Financial market update

Financial-market30 December 2013, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: Nigeria is to become the 25th largest economy in the world by 2028, second only to Egypt in Africa. This will firmly consolidate the country’s place as the largest economy in Sub-Saharan Africa, the 2013 Centre for economic and Business Research’s World Economic League Table has revealed. Nigeria’s GDP is estimated to hit $927 billion, $655 billion higher than the current estimate of $272 billion.

BONDS: No trading on Friday as the market winds down for year end.

BILLS: No trading on Friday as the market winds down for year end.

MONEY MARKET: OBB and ON rates reduced to 10.25% and 10.50% respectively. This move lower was on the back of huge liquidity boost from the N611.88 Bio bills that matured on Thursday and Friday, which was followed by OMO auction sales of about N141 Bio as the CBN attempted to mop up. More OMO auctions are expected to follow in the next couple of days.

US: Orders for long-lasting U.S. manufactured goods surged in November and a gauge of planned business spending on capital goods recorded its largest increase in nearly a year, pointing to sustained strength in the economy. While another report on Tuesday showed new home sales slipped in November, sales in October were revised to show the highest pace in more than five years. In addition, house prices rebounded, underscoring the economy’s improving fundamentals.

EU: Greek bonds returned almost four times as much as any other government securities this year as the nation that sparked Europe’s sovereign debt crisis moved toward economic recovery after six years of contraction. Greece’s 47 percent year-to-date return was the best of 34 sovereign debt markets according to reports.

CHINA: China’s benchmark money-market rate fell for a fifth day after the first weekly cash injection by the central bank this month, and the Yuan touched a 20-year high following a record fixing. The seven-day repurchase rate fell 28 basis points, or 0.28 percentage point, to 4.82 percent.

COMMODITIES: West Texas Intermediate oil traded above $100 a barrel for a second day after government data showed U.S. crude stockpiles fell more than forecast to the lowest level since September. WTI for February was at $100.32 a barrel in electronic trading on the New York Mercantile Exchange, up 2 cents.

Macro Economic Indicators
Inflation rate (yoy) for Nov. 2013       7.9%
Monetary Policy Rate current              12%
FX Reserves (Bn $) as at Dec. 24        43.880

Money Market Highlights
O/N                                   10.7917
7 Day                                 11.0833
30 Day                              11.3333
60 Day                              11.5833
90 Day                              11.8333
USD 1 Month                   0.1690
USD 2 Months                 0.2121
USD 3 Months                 0.2466
USD 6 Months                 0.3490
USD 12 Months               0.5831

Benchmark Yields
Tenor                 Maturity           Yield (%)

91 days                 27-Mar-14            11.98
182 days               05-Jun-14            11.60
364 days              04-Dec-14             12.38
2 years                  23-Apr-15             12.71
4 years                  31-Aug-17             12.58
5 years                  30-May-18           12.57

Indicative Currency Exchange Rates
Bid         Offer

EURUSD        1.3737        1.3787
GBPUSD         1.6476       1.6526
USDJPY          105.37       105.77
USDCHF         0.8924      0.8954
GBPEUR         1.1519        1.1529
USDZAR         10.454       10.604
USDNGN        160.00      160.30
JPYNGN          1.6238      1.6738
CHFNGN        172.05       176.05
EURNGN        212.18       216.18
GBPNGN         244.41      248.41
ZARNGN          16.19        18.19

                           Hi                 Low           Close       Prev.Close
USD/NGN  160.70/80    159.60/70   160.50/70   159.40/50

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