A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets01 August 2014, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Lagos State Internal Revenue Service (LIRS) on Thursday said it generated more than N120 billion from taxation between January and June this year. The Executive Chairman of the service, Mr Tunde Fowler, told the News Agency of Nigeria (NAN) in Lagos that 90 per cent of the taxes were generated from the organised private sector and civil servants. Fowler said that the remaining 10 per cent came from the informal sector, mostly market women, artisans, commercial drivers and taxable individuals in the state. He said the state had relied on the Internally Generated Revenue (IGR) to implement its budget following the dwindling statutory allocations. The chairman said the increase in the IGR to N237 billion in 2013 from N15 billion in 1999 were the fallouts of sustained mobilisation and tax education in the state.

FX: Spot moved within a 25 points range yesterday, as the mild volatility persists. Buoyed by news of an oil major selling about $50 mio, rates went south at open. We however failed a break sub 161.70 with pockets of month-end demand ensuring a reversal by mid-day. We resisted the 162.00 level yet again, recording 161.95 high and closing at about the day’s high at 161.85/95. Slight gains expected today as we open with news of an oil major selling $61 mio.

FIXED INCOME: More of the same on Thursday. With the news of the GDN (Global Depository Notes) re-opening filtering into the market yesterday morning, we saw a quick selloff at market open with yields closing higher on light activity. Sellers outnumbering buyers. We expect same sentiments to filter in today with the markets recording another quiet session.

COMMODITIES: West Texas Intermediate traded near the lowest level in more than four months amid signs of weaker fuel demand in the U.S., the world’s biggest oil consumer. WTI for September delivery was down 16 cents at $98.01 a barrel in electronic trading on the New York Mercantile Exchange at 2:59 p.m. Singapore time.

EUROPE: Bond issuance by banks in Europe slumped last month, making it the slowest July since 2001 as lenders waited for the next round of stimulus efforts by the European Central Bank. Banks issued 21.7 billion euros ($29 billion) of notes in pounds and the single currency, according to data compiled by Bloomberg. The slowest month of the year for sales came after lenders priced 300 billion euros of debt securities since the start of the year, the busiest half since the same period of 2011, the data show.

CHINA: China’s manufacturing expanded in July at the fastest pace in more than two years, signalling a pickup in economic growth is strengthening amid government support policies. The Purchasing Managers’ Index was at 51.7, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing, exceeding the median 51.4 estimate in a Bloomberg News survey and up from 51.0 in June.

Macro Economic Indicators
Inflation rate (YoY) for June. 2014               8.20%
Monetary Policy Rate current                      12.00%
FX Reserves (Bn $) as at July 24th 2014   38.942

Money Market Highlight

O/N                                 10.9167
30 Day                            12.9118
90 Day                            13.9198
180 Day                          14.6804
USD 1 Month                 0.1560
USD 2 Months               0.1985
USD 3 Months               0.2391
USD 6 Months               0.3345
USD 12 Months             0.5796

Bench Mark Yields
Tenor               Maturity           Yield

91d                      23-Oct-14             10.87
182d                    22-Jan-15            10.62
364d                   07-May-15           10.70
2y                        16-Aug-16             11.21
3y                         31-Aug-17            11.15
5y                         29-Jun-19           11.35

Indicative Currency Exchange Rates
Bid          Offer

EURUSD         1.3383       1.3393
GBPUSD         1.6848       1.6858
USDJPY          102.93       103.33
USDCHF        0.9088       0.9108
GBPEUR         1.2587        1.2597
USDZAR        10.7309      10.8309
USDNGN       161.10          161.85
JPYNGN          1.5651         1.6151
CHFNGN        177.27         181.27
EURNGN       215.60         219.60
GBPNGN        271.42        275.42
ZARNGN         15.01            17.01

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