A Review of the Nigerian Energy Industry

Financial market products & services update

Coins on a graph
Coins on a graph

05 January 2015, Sweetcrude, Houston – Local and international financial market products and services update.
FX: As expected, we ended the year with CBN’s zero Net Open Position enforcement for banks still in play. We saw a few bilateral trades between some counterparties, but still without an active 2 way quotes market. Last week’s reported interbank range was N180.00 – N187.00.

Last day of the year didn’t bring much action. Market was very quiet across the curve and liquidity was very thin. The Federal Government of Nigeria had also announced Friday 2nd January 2015 as a public Holiday to mark the Eid El Maloud celebration. Market would open for 2015 year today the 5th Jan and there would be PMA on the 7th on offer are N20.15bn of 91 day, N50.40bn of 182 day and N85.85bn of 364 day bills.

NIGERIA: The Nigerian equities market remained bullish last week despite the decline recorded on the last trading day of the week, indicating that profit-taking has begun. However, there were also speculations that bargain hunting will continue to drive up prices of some stock this week. At the close business for the week, which was the last for 2014, the NSE All-Share Index and market capitalization appreciated by 0.66 percent to close last Wednesday at N34,657.15 and N11.478 trillion respectively.

COMMODITIES: Oil fell for a third day, extending its drop from the lowest close since 2009, as record supplies from Iraq and Russia bolstered speculation a global glut that’s driven crude into a bear market may persist this year. Futures slid as much as 2.1 percent in London, after losing 5.1 percent last week. Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, plans to boost crude exports this month, the oil ministry said.

CHINA: China’s stocks rallied for their best start in 22 years, as investors piled into shares of the largest companies and developers amid speculation the government will take more steps to bolster economic growth. Petro China Co. surged 10% to lead a gauge of energy shares to the biggest advance since 2008. China Vanke Co. and Poly Real Estate Group Co. soared more than 7% after Beijing signaled it will make it easier for first-time home buyers to borrow money to buy homes.

EUROPE: The euro fell to the weakest in almost nine years against the dollar amid speculation the European Central Bank is moving closer to large-scale bond purchases.

The shared currency slid as much as 1.2 percent today after President Mario Draghi last week gave his clearest signal the ECB will start quantitative easing. The euro also weakened as Greece began an election campaign that may see victory by an anti-austerity party. A gauge of the dollar headed for its highest ever close as the Federal Reserve moves toward raising interest rates.

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   35.528

Money Market Highlights
O/N                               10.9583
30 Days                        14.5226
90 Days                        15.2433
180 Days                      15.9265

USD 1 Month              0.1675
USD 2 Months            0.2142
USD 3 Months            0.2556
USD 6 Months            0.3648
USD 12 Months          0.6328

Benchmark Yields
Tenor     Maturity      Yield (%)
91d            02-Apr-15       13.91
182d         25-Jun-15        12.86
364d         17-Dec-15        16.86
2yr            16-Aug-16        15.28
3yr            27-Apr-17        15.25
5yr            29-June-19      15.30

Indicative Currency Exchange Rates
                       Bid       Offer
USDNG         N/A        N/A
EURUSD     1.1849     1.2051
GBPUSD     1.5193      1.5795
USDJPY       120.33     120.36
USDCHF     0.00045  0.0106
GBPEUR     1.2697      1.2901
USDZAR      11.5912   11.7946
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

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