A Review of the Nigerian Energy Industry

Financial market update

Financial-markets07 March 2014, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Federal Executive Council (FEC) has ratified a diaspora bond of $100-300 million, Information Minister Labaran Maku has disclosed. Maku disclosed this yesterday while briefing journalists on the outcome of the Federal Executive Council (FEC) meeting. He said the bond was expected to encourage Nigerians living abroad living to invest in their father land. Giving the details of the bond, Finance Minister Ngozi Okonjo-Iweala said it was specifically aimed at attracting investment in the nation’s infrastructure.

FIXED INCOME: On the back of the PMA stop rate of Wednesday, bills market turned bearish as investors reacted to the higher stop rates offered at the primary market auction. Sell off was seen across most maturities as average yields closed higher by 20bps to 13.51%. Bulk of the advancement was seen on the shortest and longest dated paper. OMO auction yesterday with NGN50B on offer on the 126DTM. Despite market subscription of NGN64.4bn at bid range of 13.10% – 14% discount, no sale was made. Bearish run in the Bond market yields closed higher across all maturities save for the 2030 which closed flat. Nonetheless, with yields at the secondary market still lower than the primary market levels, we anticipate some further sell-offs in the T-Bills.

COMMODITIES: West Texas Intermediate headed for its first weekly loss since January before data forecast to show hiring lagged behind the seasonal pace in the U.S., the world’s biggest oil consumer. WTI for April delivery was at $101.85 a barrel in electronic trading on the New York Mercantile Exchange.

EUROPE: European stocks were little changed, paring earlier gains, after the European Central Bank kept its benchmark interest rate unchanged. The Stoxx Europe 600 Index rose less than 0.1 percent to 337.28 at the close of trading in London after earlier gaining as much as 0.6 percent. The gauge, which fell 0.2 percent this week amid tension over Ukraine.

INDIA: India’s rupee was headed for its biggest weekly gain in three months on speculation a shrinking current-account deficit will spur overseas demand for the nation’s assets. The rupee rose 0.1 percent to 61.045 per dollar as of 10:18 a.m. in Mumbai.

Macro Economic Indicators
Inflation rate (yoy) for Jan.2014      8%
Monetary Policy Rate                         12%
Fx Reserves (Bn $) as at Mar.3       39.725

Money Market Highlights

O/N                   12.1667
7 Day                 12.5417
30 Day              12.7917
60 Day              13.0417
90 Day              13.3333
USD 1 Month        0.1544
USD 2 Months      0.1955
USD 3 Months      0.2351
USD 6 Months      0.3320
USD 12 Months    0.5520

Benchmark Yields
Tenor          Maturity          Yields
91d                05-Jun-14        13.28%
182d             04-Sep-14         14.13%
364d             19-Feb-15         14.98%
2y                  23-Apr-15         14.40%
4y                  31-Aug-17         13.89%
5y                  30-May-18       13.89%

Indicative Currency Exchange Rates
                          Bid       Offer
EURUSD     1.3870    1.3880
GBPUSD      1.6740    1.6750
USDJPY       102.90    103.30
USDCHF      0.8791    0.8811
GBPEUR      1.2068    1.2078
USDZAR      10.6159   10.7159
USDNGN     164.43     165.18
JPYNGN      1.5980     1.6480
CHFNGN     187.04     191.04
EURNGN     228.06    232.06
GBPNGN     275.26     279.26
ZARNGN     15.49        17.49

                               Hi                Low            Close      Prev.Close
USD/NGN  164.52/62   163.75/85   164.48/58   163.70/80

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