A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets28 August 2014, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: The Minister of Mines and Steel Development, Mr. Musa Sada, has said that the federal government has targeted coal to contribute 30 per cent of power generation in the country by 2015. Sada stated that the federal government was determined to address the country’s power challenge through coal. He said the ministry was taking steps towards meeting the target by making effort to determine the amount of coal deposit in the country. The minister explained that the quantity and life span of coal deposit in the country would determine the basis for designing the coal power plant to generate power supply. He said the federal government would ensure that gas, solar and wind energy contributed to power generation, adding that all the countries that had steady power supply did same.

FIXED INCOME: Market remained well bid for most part of the day especially bonds recouping previous day’s losses. With OMO maturities of approximately NGN198billion expected to support system liquidity today, we anticipate some improvement in demand for bills baring any OMO auction.

FX: USDNGN opened at 162.15/25 and closed lower than previous close at 161.90/00. We have seen a limited impact of this month’s round of oil major sales.

USA: The U.S. budget picture will likely worsen this year as companies wait to see what actions Congress will take on taxes in coming months, a report from the Congressional Budget Office showed on Wednesday. The U.S. budget deficit for fiscal year 2014 ended Sept. 30 will be an estimated $506 billion, a slight increase from the $492 billion projected in April, based on lower-than-expected corporate tax receipts, the non-partisan CBO said.

COMMODITIES: Brent was steady in London. Brent for October settlement was 4 cents lower at $102.68 a barrel on the London-based ICE Futures Europe exchange.

EUROPE: Britain’s economy looks set to grow at its fastest rate since 2007 this year, but the rapid pace is unlikely to be sustained, the British Chambers of Commerce said on Wednesday after nudging up its growth forecasts for this year and next. The BCC said it expected Britain’s economy to grow by 3.2 percent this year and by 2.8 percent in 2015, up from forecasts of 3.1 percent and 2.7 percent three months earlier and a little above economists’ average forecast in a poll.

Macro Economic Indicators
Inflation rate (YoY) for July. 2014                       8.30%
Monetary Policy Rate current                              12.00%
FX Reserves (Bn $) as at August 22nd 2014     39.582

Money Market Highlights

O/N                               11.2500
30 Day                          12.5204
90 Day                          13.4059
180 Day                        14.2116
USD 1 Month               0.1567
USD 2 Months             0.1971
USD 3 Months             0.2346
USD 6 Months             0.3319
USD 12 Months           0.5626

Benchmark Yields
Tenor        Maturity       Yield

91d               20-Nov-14       9.45
182d             05-Mar-15     10.94
364d            06-Aug-15      11.53
2y                 16-Aug-16       11.33
3y                 31-Aug-17       11.28
5y                 29-Jun-19       11.34

Indicative Currency Exchange Rates
Bid        Offer

USDNGN     161.60       162.30
EURUSD      1.3113       1.3314
GBPUSD      1.6503      1.6705
USDJPY       103.73      103.76
USDCHF      0.9080    0.9182
GBPEUR      1.2465      1.2667
USDZAR     10.5369   10.7373
JPYNGN      1.5105      1.6117
CHFNGN     176.49     178.24
EURNGN     213.32     214.67
GBPNGN     268.20    269.60
ZARNGN      14.32        16.13

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