A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets 120 August 2014, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: The federal government has said Nigeria’s Electricity Supply Industry (NESI) is now showing signs of an electricity market with globally recognised standards in trading arrangements especially with regards to the presence of two key agencies. Vice-President Namadi Sambo said in Abuja that the presence of the Nigerian Electricity Regulatory Commission (NERC) and Nigeria Bulk Electricity Trading (NBET) Plc have provided the requisite conditions to attract essential funding and investments into the country’s electricity market.

FX: USDNGN traded within a narrow range today, capped at 162.26 after an initial move up from a 162.00/10 open. Rates went south momentarily as we continue to see some bids sub 162 which ensured the pair retrace upward. With no momentum on either direction, the pair closed just a tad above previous level after another relatively quiet day for the pair.

FIXED INCOME: Fairly firm session yesterday. Seeing some money being put to work by a few offshore investors in the tbill market. Active in selective bills but the 23 oct 14 bills benefitting the most though overall volumes quite low as expected on a day before a tbill auction. Bonds closing 2bps better across the curve recouping Monday’s losses – renewed demand from the local investors leading the rally in the market.

COMMODITIES: West Texas Intermediate swung between gains and losses amid speculation that crude and fuel inventories fell in the U.S., the world’s biggest oil consumer. WTI for October delivery, the most active contract, was at $92.78 a barrel in electronic trading on the New York Mercantile Exchange, down 8 cents, at 2:50 p.m. Singapore time.

US: The dollar climbed against most peers before the release of minutes from the Federal Reserve’s last meeting. The greenback advanced 0.2 percent versus the yen by 8:05 a.m. in London, adding at least 0.2 percent against the currencies of South Korea, Poland and Norway as the Bloomberg Dollar Spot Index traded at the highest level since February.

INDIA: India’s rupee fell the most in two weeks as demand for dollars increased amid speculation signs of a pickup in the U.S. economy will prompt the Federal Reserve to raise interest rates. The Indian currency fell 0.3 percent to 60.8400 per dollar as of 9:48 a.m. in Mumbai, prices from local banks compiled by Bloomberg show. That’s the biggest drop since Aug. 6.

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                          14.3136
90 Day                          14.7251
180 Day                        15.2407
USD 1 Month               0.1555
USD 2 Months             0.1937
USD 3 Months             0.2344
USD 6 Months             0.3285
USD 12 Months           0.5511

Benchmark yields
Tenor             Maturity         Yield
91d                    20-Nov-14         10.47
182d                  05-Mar-15         11.02
364d                 06-Aug-15          11.37
2y                      16-Aug-16           11.32
3y                      31-Aug-17           11.39
5y                       29-Jun-19          11.47

Indicative Currency Exchange Rates
                            Bid        Offer
EURUSD         1.3292       1.3302
GBPUSD         1.6665        1.6675
USDJPY          103.27       103.67
USDCHF         0.9106      0.9126
GBPEUR         1.2537        1.2547
USDZAR         10.6677     10.7677

USDNGN        161.78        162.53
JPYNGN          1.5666       1.6166
CHFNGN        177.66        181.66
EURNGN        215.04       219.04
GBPNGN         269.61       273.61
ZARNGN          15.17          17.17

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