A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets19 August 2014, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Federal Government said it has concluded plans to provide N2 billion Agricultural and Infrastructure Support Fund for investors in the sugar industry. Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, disclosed this during the Quarterly Meeting with the Directors General and Chief Executive Officers of agencies and parastatals under the Ministry in Abuja. Aganga noted that the intervention fund which will be disbursed at a single digit interest rate, would serve as cheap and affordable capital for investors who are investing in the Backward Integration Programme of the Federal Government in the sugar sector.

FX: We had a flow driven day with NGN closing unchanged yesterday. The pair was very bid at open, seeing the market move towards the mid-162 level few minutes into trading, however only peaking at 162.40. We saw a change in sentiments thereafter with sellers dominating the rest of the day.

FIXED INCOME: Bond trading yesterday started with a slight sell-off. Short end bonds closing 5bps higher average while long end closing 2bps lower average. The 2034s recorded modest gains on Monday closing at 12.34% (-3bps) after being a laggard for bit now. Light day and fairly weak tone in the tbill market as street makes room for the PMA auction on Wednesday with NGN70.6 billion on offer on the 91day and 182day tenors.

COMMODITIES: West Texas Intermediate rose for the second time in three days before supply data that may signal the strength of fuel demand in the U.S., the world’s biggest oil consumer. WTI for September delivery, which expires tomorrow, gained as much as 55 cents to $96.96 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.93 at 2:37 p.m. Singapore time.

EUROPE: The European Union activated emergency support for fruit and vegetable producers with a budget estimated at 125 million euros ($167 million) through November after Russia restricted imports of European farm goods. The EU measures include market withdrawals for some fruit and vegetables, as well as compensation for non-harvesting and curbing yields, the European Commission said in a statement Aug. 18. Russia on Aug. 7 announced a ban on a range of food products from the EU and the U.S., including all fruit and vegetables, in retaliation for sanctions against the country over Ukraine (153 DER A-13, 8/8/14).

INDIA: India’s rupee rose to this month’s strongest level as stocks advanced on optimism the government is stepping up efforts to rein in the budget deficit. The S&P BSE Sensex index of local shares climbed as much as 0.5 percent to a record high today. The Indian currency gained 0.1 percent 60.6850 per dollar as of 9:55 a.m. in Mumbai, prices from local banks compiled by Bloomberg show.

Macro Economic Indicators
Inflation rate (YoY) for June. 2014                   8.20%
Monetary Policy Rate current                            12.00%
FX Reserves (Bn $) as at August 15th 2014    39.593

Money Market Highlights

O/N                             10.9167
30 Day                         13.9099
90 Day                         14.4475
180 Day                       15.0776
USD 1 Month               0.1555
USD 2 Months             0.1938
USD 3 Months             0.2321
USD 6 Months             0.3285
USD 12 Months           0.5511

Benchmark yields
Tenor             Maturity           Yield

91d                    20-Nov-14           10.45
182d                  05-Mar-15           11.03
364d                  06-Aug-15           11.33
2y                       16-Aug-16            11.38
3y                       31-Aug-17            11.42
5y                       29-Jun-19            11.55

Indicative Currency Exchange Rates
Bid          Offer

EURUSD      1.3345       1.3355
GBPUSD       1.6691       1.6701
USDJPY        102.60       103.00
USDCHF       0.9072       0.9092
GBPEUR       1.2504       1.2514
USDZAR       10.6313      10.7313

USDNGN      161.80       162.55
JPYNGN        1.5770       1.6270
CHFNGN       178.35       182.35
EURNGN       215.92       219.92
GBPNGN       270.06       274.06
ZARNGN         15.22         17.22

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