A Review of the Nigerian Energy Industry

Financial market products & services update

Currency notes, coins & gold bars.
Currency notes, coins & gold bars.

18 December 2014, Sweetcrude, Houston – Local and international financial market products and services update.
FX: The pair came under pressure on Wednesday as it printed the years high of 187.40/50. Reason attributable to this is the shutting of the RDAS window yesterday, which forced clients to jostle for funds at the interbank market.
Brent trading lower at 58.71 was also a source of concern and further fuelling the depreciation. The CBN decided to stay out of the interbank market yesterday. It’s expected that the pressure would most likely persist into today and likely breach of the N190 levels (if the CBN do not inject liquidity into the interbank. CBN offered $200mio and sold $199.94m, lowest intervention rate was maintained again at N169.68 (1% commission inclusive i.e. N168.00). 14 banks bid. The CBN totally removed the Net open position of banks yesterday, impact would be felt today.FIXED INCOME: Bond yields printed at 15.49% (August 2016s), 15.20% (March 2024s), 15.49% (July 2034s); while T-Bills 11.31% (91day), 14.88% (182day) and 19.02% (364day). Wednesday was one-way traffic in secondary trading with dual auction – mostly bids wanted. New levels keep being established with every passing auction and are starting to ‘slightly’ reflect the risk in Nigeria credit.

US: Prices paid by American consumers dropped in November by the most in almost six years, providing a boost to buying power that will propel economic growth. The cost of living fell 0.3 percent, the most since December 2008, after being little changed the prior month, according to Labour Department figures issued yesterday in Washington.

COMMODITIES: Benchmark U.S. oil prices fell after an Energy Information Administration report showed inventories at Cushing rose last week. West Texas Intermediate futures dropped 1.9 percent.

Inventories at Cushing, Oklahoma, the delivery point for West Texas Intermediate futures, rose 2.92 million to 27.8 million, the highest level since March, the EIA said. Prices also decreased as Russia reiterated that it will keep production steady, echoing OPEC’s strategy of refraining from curbing supply to tackle a global surplus.

EU: The Bank of Russia took steps to stabilize the banking system as the Ruble collapse makes it more expensive to meet foreign-currency debt obligations.

Russian lenders and companies are concerned about coming foreign-currency debt payments, central bank First Deputy Governor Ksenia Yudaeva said in an e-mailed statement today in Moscow. The measures are intended to balance supply and demand to help stabilize the Ruble rate as soon as possible, she said.

CHINA: The People’s Bank of China rolled over at least a portion of a three-month lending facility from September that was set to expire, according to a government official familiar with the matter.

The earlier facility, reported Sept. 17 and later confirmed by the central bank, was for 500 billion yuan ($80.7 billion) over three months with an interest rate of 3.5 percent. The official, who couldn’t specify the terms of the roll-over, asked not to be named because the details haven’t been made public.

Macro Economic Indicators
Inflation rate (YoY) for Oct., 2014                     7.90%
Monetary Policy Rate current                            13.00%
FX Reserve (Bn $) as at December 15 2014    35.342

Money Market Highlights
O/N                                65.9667
30 Days                          17.5323
90 Days                          17.2368
180 Days                        17.7424

USD 1 Month                 0.1641
USD 2 Months               0.2090
USD 3 Months               0.2454
USD 6 Months               0.3436
USD 12 Months             0.6053

Benchmark Yields
Tenor      Maturity       Yield (%)
91d             12-Mar-15       14.01
182d          14-May-15       11.49
364d          03-Dec-15       13.23
2yr             16-Aug-16       14.99
3yr             27-Apr-17       15.08
5yr             29-June-19     15.04

Indicative Currency Exchange Rates
                         Bid           Offer
USDNG         185.29        185.99
EURUSD      1.2211          1.2413
GBPUSD       1.5479         1.5681
USDJPY        118.50         118.53
USDCHF       0.97355     0.9837
GBPEUR       1.2552        1.2756
USDZAR       11.4509      11.6543
JPYNGN       157.6897    157.7903
CHFNGN      190.21        191.89
EURNGN      229.56        230.92
GBPNGN      290.51        291.91
ZARNGN       15.02          16.95

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