A Review of the Nigerian Energy Industry

Financial market products & services update

finance05 September 2014, Sweetcrude, Houston – Local and international financial market products and services update.
FX: Very active trading market yesterday. Momentum picked up at an hour to close of trading. Alleged offshore flows from interbank CP’s saw us trade a low of 162.00.For most of the day we were very much range bound and stable. Expectation is that market will go sub 162 levels today as market starts to position for the flow from the state owned oil company. Downward swing may however be curbed as a major Telco looking to remit dividend may end up buying at the low levels forcing a retracement above the 162 levels, certainly one to keep an eye on

FIXED INCOME: Rate action by European Central Bank saw some demand filter into the bond space especially for the March 2024s after an initial weak open. We saw the 91 day bill (4th Dec 14) squeeze lower adjusting to auction results. Small issue size on this T-bill should give it some support over the next few days. The short end of the t-bill curve continues to get most of the attention (NGN17bn traded today on 18 Sept – 10 day bill). Expect the positive sentiments to continue into today.

COMMODITIES: WTI headed for a weekly decline as refineries reduced operating rates at the end of the peak gasoline season in the U.S., the world’s biggest oil consumer. Brent was steady in London. Futures were little changed in New York and down 1.3 percent since Aug. 29. Refineries operated at 93.3 percent of capacity last week, down 0.2 percentage points, according to the Energy Information Administration.

NIGERIA: The Nigerian Government on Wednesday September 3, 2014 was applauded in Sweden for her efforts in constructing the multi-billion naira Kashimbilla Dam as one of the global strategies for connecting the nexus of food, water and energy. While speaking at the African Focus Day at the 24th Edition of the World Water Week in Stockholm – Sweden, the Minister of Water Resources, Sarah Reng Ochekpe said that the dam which cost the federal government $1 billion would generate about 30 megawatts of electricity to Benue and Taraba States.

USA: Treasuries fell, with yields rising to a seven-year high versus their developed-market peers, before a jobs report tomorrow forecast to show the U.S. economy is strengthening as major central bank policies diverge. David Tepper, founder of $20 billion hedge-fund firm Appaloosa Management LP, called the bond-market rally “done” after the European Central Bank unexpectedly cut interest rates and pledged to buy asset-backed securities to spur economic growth while staving off the threat of deflation.

CHINA: CHINA will help Zimbabwe build special economic zones and industrial parks to jump-start exports and a struggling economy, its ambassador to Harare said on Thursday as a Chinese firm started expanding the country’s largest hydro-power plant. The pledge by Beijing’s top envoy to Zimbabwe, Lin Lin, comes days after President Robert Mugabe returned from a trip to China during which he sought financial help and investment from the world’s number two economy.

Macro economic Indicators
Inflation rate (YoY) for July. 2014                     8.30%
Monetary Policy Rate current                            12.00%
FX Reserves (Bn $) as at September 2014      39.601

Money Market Highlights

O/N                               10.9167
30 Day                          12.4966
90 Day                          13.3096
180 Day                        14.2998
USD 1 Month               0.1561
USD 2 Months             0.1966
USD 3 Months             0.2331
USD 6 Months             0.3289
USD 12 Months           0.5641

Benchmark Yields
Tenor       Maturity        Yield (%)

91d              04-Dec-14         11.25
182d            05-Mar-15        11.42
364d           06-Aug-15         12.82
2y                16-Aug-16          11.16
3y                31-Aug-17           11.19
5y                29-Jun-19          11.21

Indicative Currency Exchange Rates
Bid         Offer

USDNGN          161.90       162.90
EURUSD          1.3035       1.3237
GBPUSD           1.6357       1.6559
USDJPY            104.90      105.95
USDCHF           0.9082      0.9284
GBPEUR           1.2417        1.2620
USDZAR          10.6297     10.8297
JPYNGN            1.5071        1.5983
CHFNGN           175.80       177.93
EURNGN          212.46        214.63
GBPNGN           266.42       268.62
ZARNGN            14.19          16.22

In this article

Join the Conversation