A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets 104 June 2014, Sweetcrude, Houston, Tx – Local and international financial market products and services update.
NIGERIA: Godwin Emefiele, the new Governor of Central Bank of Nigeria (CBN), will on Thursday, unveil the new strategies to be adopted by the bank under his leadership, a statement, signed by Isaac Okoroafor for the CBN Director, Corporate Communications, announced on Tuesday. Emefiele is the 10th indigenous CBN governor, the statement said. It also stated that Emefiele arrived at the apex bank premises in Abuja at 7.30a.m. on Tuesday and was welcomed by the four deputy governors and staff, led by Dr Sarah Alade, whose tenure as Acting CBN Governor ended on Monday. Additionally, the statement stated that the new CBN governor is expected to have a maiden World Press Conference on Thursday, June 5, where he will unveil his agenda for the Central Bank of Nigeria and the people of Nigeria.

FIXED INCOME: The market opened on a bullish note yesterday, as yields continued to decline across all tenors for FG bonds. This move was however halted before midday trading as market saw some selloff. The market closed relatively flat when compared to Monday’s close as market begins to cautiously position for the expected outcome of today’s primary auction. At current yields, we are likely to experience some calmness all through today’s trading session.

FX: We saw oil inflows totalling about $21.7 million yesterday; this initially stabilized rates until we saw increased USD demand towards midday. We are still expecting the state owned Oil Company to come in this week. CBN is likely to sell $300 million at today’s auction, as demand in the official window seems to be waning.

COMMODITIES: West Texas Intermediate rose for a second day after an industry report showed crude inventories declined in the U.S., the world’s biggest oil consumer. WTI for July delivery climbed as much as 32 cents to $102.98 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.82.

US: U.S. job growth likely slowed in May and the unemployment rate probably ticked up, but not by enough to upset the view that the economy is bouncing back strongly after a winter slump. Employers probably added 218,000 jobs to their payrolls last month, according to reports. While that would be a step down from April’s robust 288,000 job gain, it would still be above the average for the preceding six months.

CHINA: Home prices in China are still facing upward pressures in some cities, and the issue of a shortage of housing supply is difficult to solve in the short term, the country’s housing ministry said in a statement ahead of a news briefing on Wednesday. Private surveys showed China’s home prices fell slightly in May from the previous month, adding to fresh signs of cooling in a property market that has skirted bubble territory in recent months.

Macro Economic Indicators
Inflation rate (yoy) for Apr. 2014          7.9%
Monetary Policy Rate current                12%
FX Reserves (Bn $) as at May. 29         37.147

Money Market Highlights

O/N                            10.7500
30 Day                       12.4937
90 Day                       13.5002
180 Day                     14.3776
USD 1 Month            0.1510
USD 2 Months          0.1905
USD 3 Months          0.2272
USD 6 Months          0.3219
USD 12 Months        0.5345

Benchmark Yields
Tenor         Maturity        Yield

91d                28-Aug-14        10.41
182d             04-Dec-14        10.73
364d            07-May-15        11.26
2y                 16-Aug-16         11.38
4y                 31-Aug-17         11.48
5y                 29-Jun-19         11.77

Indicative Currency Exchange Rates
Bid            Offer

EURUSD          1.3552       1.3654
GBPUSD          1.6707       1.6811
USDJPY           102.31       102.34
USDCHF          0.8936      0.9038
GBPEUR          1.2270       1.2371
USDZAR          10.5359     10.7431
USDNGN         161.95        162.65
JPYNGN          1.5707        1.7207
CHFNGN         187.26        192.86
EURNGN        227.56        232.76
GBPNGN         273.06       278.26
ZARNGN         14.32          18.12

Hi               Low            Close      Prev.Close
      162.67/77    162.20/30   162.25/35    162.67/77

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