A Review of the Nigerian Energy Industry

Financial market products & services

Financial markets
Financial markets

03 February 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Central Bank of Nigeria (CBN) on Monday commenced the disbursement of a total of N18.26 billion to five electricity distribution and generating companies as part of its N213 billion Nigerian Electricity Stabilisation Facility to the power sector.

The first beneficiaries of the special CBN power sector intervention facility include the Eko Electricity Distribution Company Plc and Ibadan Electricity Distribution Company Plc which received cheques valued at N5.16 billion and N11.36 billion respectively.

FX: USDNGN resumed the week with bid reversing some of late last week gains from the oil flows and daily CBN intervention trades. Another Oil major offered and sold about $50 mio yesterday, with more whispers of another late CBN intervention also present. Further upside bias on the pair this week given an expected dip in volume of oil flows.

CBN sold $199.06 mio of the $200 mio on offer at yesterday’s RDAS. Marginal rate was maintained at 169.68(1% commission inclusive).

FIXED INCOME: Quiet start for the week. Yesterday’s OMO auction from CBN got even less attention compared to that of Friday last week. Bonds remain quiet and T-bill secondary trading a bit of a mixed bag with the sellers emerging to close. O/N rates at approximately 10% with liquidity up NGN 457.19 billion.

CHINA: Alibaba Group Holding Ltd. is from today offering loans through LendingClub Corp. to help U.S. buyers’ source products from China and boost the e-commerce giant’s expansion overseas.

The program allows U.S. based businesses to apply for short-term credit lines of as much as $300,000 to purchase goods from Chinese suppliers on Alibaba.com, the Hangzhou-based company said in an e-mailed statement. The loans, which have terms of up to six months, carry fixed monthly interest rates of between 0.5% and 2.4%, according to the program’s website.

U.S: Yields on Treasury notes and bonds are increasingly at odds with the U.S. economy’s performance and outlook, according to James W. Paulsen, Wells Capital Management Inc.’s chief investment strategist.

Eighteen European countries had 10-year government bond yields lower than the Treasury’s yield at the end of last week, according to data compiled by Bloomberg. Switzerland’s 10-year debt, whose yield turned negative on Jan. 16, was one of them. The European Central Bank is preparing a bond-purchase program, designed to bolster the region’s economy and rein in deflation.

COMMODITIES: Oil advanced for a fourth day, the longest rising streak since August, while gasoline extended gains as strikes continued at U.S. refineries that account for 10% of the nation’s capacity. Futures climbed as much as 1.8% in New York. The United Steelworkers union’s work stoppage, which started Feb. 1 at nine sites, has resulted in the shutdown of one plant while management has taken control of operations at six other facilities.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                 8.00%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     34.281

Money Market Highlights
O/N                                 10.2917
30 Days                           13.5143
90 Days                           14.7865
180 Days                         15.8640

USD 1 Month                0.1695
USD 2 Months              0.2085
USD 3 Months              0.2521
USD 6 Months              0.3574
USD 12 Months            0.6194

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           30-Apr-15        14.00
182d         30-Jul-15         13.88
364d         21-Jan-16        16.33
2yr            16-Aug-16        15.07
3yr            31-Aug-17        15.28
5yr            23-Oct-19        15.25

Indicative Currency Exchange Rates
                          Bid         Offer
USDNG         187.00       192.00
EURUSD      1.1231         1.1433
GBPUSD      1.4900        1.5102
USDJPY       117.22         117.24
USDCHF      0.92145      0.9317
GBPEUR      1.3137         1.3340
USDZAR      11.4410       11.6450
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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