A Review of the Nigerian Energy Industry

Financial market products & services update

Currency notes, coins and gold bars.
Currency notes, coins and gold bars.

06 January 2015, Sweetcrude, Houston – Local and international financial market products and services update.
FX: RDAS resumed yesterday, with CB selling $178.94m of the $200m on offer. Marginal rate was maintained at 169.68 inclusive of 1% commission) for the 5th consecutive auction. Not much changed in the spot market anyway as the NOP directive is still in play. 3 oil majors offered an estimated $250m on Monday, with the auctions reported to have closed above 184.50. Reported bilateral interbank trades were in the 184.50-186.50 range.

FIXED INCOME: It was an Interesting start to the year as redemption of T-Bills this January was very supportive – O/N rates down to 10% (averaging 11% last week). The initial hour or so of trading was fairly positive as bonds and T-Bills were bid. Market paused by mid-day and was a bit quiet to the close. On Wednesday, the first T-Bill auction for the year would hold with the secondary market demand to filter into the auction outcome. OMO auction floated yesterday printing at 15.31% yield only NGN55.9bn sold.

NIGERIA: The two chambers of the National Assembly on Monday dispelled fears that the 7th National Assembly would not pass the Petroleum Industry Bill before the end of its tenure on June 5, 2015. The Senate and the House of Representatives claimed that the bill would be passed before the expiration of their tenure on June 5. With just around 151 days left to the end of the current legislative tenure, there have been fears that the bill may be left un-passed as was the case in the 6th National Assembly.

COMMODITIES: West Texas Intermediate oil fell below $50 a barrel for the first time since April 2009 as surging supply signaled that the global glut that drove crude into a bear market will persist. Futures slid as much as 5.2 percent in New York. Brent futures earlier slid below $55 in London for the first time since May 2009. Russia’s output rose to a post-Soviet high in December, preliminary Energy Ministry data showed.

CHINA: China is accelerating 300 infrastructure projects valued at 7 trillion Yuan ($1.1 trillion) this year as policy makers seek to shore up growth that’s in danger of slipping below 7 percent.

Premier Li Keqiang’s government approved the projects as part of a broader 400-venture, 10 trillion Yuan plan to run from late 2014 through 2016, said people familiar with the matter who asked not to be identified as the decision wasn’t public.

EUROPE: The euro weakened to an almost nine-year low versus the dollar amid investor concern Greece might leave the currency union and on speculation the European Central Bank has moved closer to large-scale sovereign-bond purchases.

A gauge of the dollar reached the strongest in nine years with the Federal Reserve moving toward raising interest rates.

The yen rose to an eight-week high against the euro as a slide in Asian stocks boosted demand for haven assets. Russia’s ruble tumbled as oil fell. The British pound fell a second day.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                    7.90%
Monetary Policy Rate current                           13.00%
FX Reserve (Bn $) as at December 31 2014   35.468

Money Market Highlights
O/N                                   11.2017
30 Days                            14.1216
90 Days                            14.8599
180 Days                          15.6187

USD 1 Month                    0.1680
USD 2 Months                  0.2156
USD 3 Months                  0.2536
USD 6 Months                  0.3623
USD 12 Months                0.6338

Benchmark Yields
Tenor       Maturity      Yield (%)
91d             02-Apr-15        12.42
182d           25-Jun-15        12.84
364d          17-Dec-15         16.33
2yr             16-Aug-16        14.83
3yr             27-Apr-17        14.85
5yr             29-June-19      14.91

Indicative Currency Exchange Rates
                          Bid         Offer
USDNG             N/A         N/A
EURUSD        1.1833      1.2035
GBPUSD        1.5125       1.5727
USDJPY         119.15       119.18
USDCHF       1.00165    1.0118
GBPEUR        1.2656     1.2860
USDZAR        11.6043   11.8077
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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