A Review of the Nigerian Energy Industry

Financial market products & services update

Coins on a graph.

23 December 2014, Sweetcrude, Houston – Local and international financial market products and services update.
FX: USDNGN remained illiquid yesterday, as the interbank FX market still did not trade. Few FX traders showed indicative quotes in $100k size; range of quotes being 182.00-186.50, but almost impossible to get a firm quote. Banks continue to close out few bilateral trades, with market still skewed to RHS flows. CBN completely stayed off market today. An oil major offered an undisclosed amount of USD; the auction was reported to have closed above 188.00, a testament to the level of outstanding demand in the market. It is expected that CBN would maintain status-quo till the end of the year.FIXED INCOME: Yesterday’s trading was quiet as the end of year draws close. Ease on liquidity squeeze continues, as overnight dropped to 11.70% and this brought some demand on the short end of the Tbills curve from locals. Activity was relatively low on bonds, not much interest in the market while offshore clients were better sellers. There’s a Tbill auction this week and on offer are 21bn of 91-day and 31bn of 182-day bills.

COMMODITIES: Oil advanced for the second time in three days as investors weighed a projected decline in U.S. crude inventories against signs that Iraq is joining other OPEC members in defending market share. West Texas Intermediate futures climbed as much as 2.9percent in New York. Stockpiles in the U.S., the world’s largest oil consumer, probably dropped for a second week. Brent gained as much as 75cents to $60.86/bbl

Nigeria: The Federal Government has signed agreements with three companies to establish power plants that would generate a combined total of 1700mega watt of power using solar technologies. The memoranda of understanding (MoUs) were signed with South Korean backed firm, Solius NGDC; Peoples’ Homes Association; and Power House Energy Americas.

CHINA: China’s benchmark money-market rate dropped the most in eight months as demand for new share sales fell short of estimates, boosting the supply of cash. he seven-day repurchase rate, a gauge of interbank funding availability, fell 71 basis points to 5.46 percent as of 10:18 a.m. in Shanghai, according to a weighted average from the National Interbank Funding Centre. That was the biggest drop since April 4. The PBOC didn’t conduct any open-market operations today, according to two traders at primary dealers required to bid at the auctions.

INDIA: Indian Prime Minister Narendra Modi today risks failing to win approval from lawmakers for one of his biggest policy changes yet, a setback that dims prospects for other key bills until he wins greater sway in the upper house. In a parliamentary session expiring today, upper house members have refrained from a vote on raising the foreign ownership cap in the insurance sector to 49 percent from 26 percent. Under a best-case scenario, Modi won’t control the body until 2017; more realistically it’ll be 2018.

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   35.1341

Money Market Highlights
O/N                              12.0017
30 Days                       14.6180
90 Days                       15.5224
180 Days                     16.3741

USD 1 Month               0.1670
USD 2 Months             0.2103
USD 3 Months             0.2551
USD 6 Months             0.3544
USD 12 Months           0.6223

Benchmark Yields
Tenor      Maturity      Yield (%)
91d             12-Mar-15       14.34
182d          14-May-15       12.64
364d          03-Dec-15       18.17
2yr             16-Aug-16       15.54
3yr             27-Apr-17        15.38
5yr             29-June-19     15.46

Indicative Currency Exchange Rates
                         Bid         Offer
USDNG         185.73      186.43
EURUSD       1.2137      1.2339
GBPUSD       1.5493      1.5695
USDJPY        120.09     120.12
USDCHF       0.97805  0.9882
GBPEUR       1.2641      1.2845
USDZAR       11.4617    11.6651
JPYNGN         N/A         N/A
CHFNGN        N/A         N/A
EURNGN        N/A         N/A
GBPNGN        N/A         N/A
ZARNGN        N/A         N/A

In this article

Join the Conversation