A Review of the Nigerian Energy Industry

Financial market products & services update

Financial chart, currency notes and a compass.
Financial chart, currency notes and a compass.

25 February 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: Electricity generation in the country has dropped as Seplat Petroleum Development Company Plc shuts down the Oben Gas Plant, a joint venture between the company and the Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC). The 10-day long shut-down, which will enable the company to tie in its expansion unit with the existing plant, will reduce gas supply to the country’s power generating plants by 135 million standard cubic feet of gas per day (MMSCF).

FX: Not much has changed in NGN interbank market in terms of market liquidity. Yesterday’s Market levels being in the 197.00-201.50 range. CBN continued with the special intervention yesterday at 198.00. Yet again, not all eligible demand was met for reasons undisclosed. Slight inflow from an oil major ($15.3) mio reportedly traded above 200.00.

FIXED INCOME: Bonds started off well yesterday with locals topping up demand on the back of expected Federal Accounts Allocation Committee inflow due to hit the market any moment from today. In the Treasury bills space, maturities with 60days and below continue to be well bid while other tenors remained relatively flat.

MARKET MONEY: The money market was down about NGN 90bn yesterday; as a result Overnight rates have remained between 15%- 20%. The Monthly Federal Accounts Allocation Committee is expected to come into the system and NGN 200Bn OMO maturities to bring some respite to the system this week.

U.S: The dollar retreated, while bonds advanced with precious metals after Federal Reserve Chair Janet Yellen signalled U.S. interest-rate increases aren’t imminent.

The Bloomberg Dollar Spot Index lost 0.3% by 7:12 a.m. in London, as the U.S. currency slid 0.3% versus the yen and euro. Yields on 10-year debt retreated from Sydney to Tokyo and Frankfurt. Gold snapped a four-day drop and silver jumped 1.9%.

INDIA: India’s rupee rose to a two-week high and bonds advanced after Federal Reserve Chair Janet Yellen signaled an increase in U.S. interest rates isn’t imminent, supporting demand for emerging-market assets.

The rupee is reacting to Yellen’s comments, which implied that U.S. rate increases are still probably some time away,” said Navin Raghuvanshi, a currency trader at DCB Bank in Mumbai. There’s also some expectation of an investment-friendly budget, which is aiding sentiment.

The rupee gained 0.3% to 62.05 a dollar as of 10:11 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg.

COMMODITIES: Gold rebounded from the lowest level in seven weeks as investors weighed the outlook for U.S. interest rates after Federal Reserve Chair Janet Yellen downplayed the possibility of an immediate increase.

Gold dropped to $1,190.52 on Tuesday, the lowest price since Jan. 5.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                 8.20%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     32.170

Money Market Highlights
O/N                                  20.0833
30 Days                           15.3876
90 Days                           16.5241
180 Days                         17.4039

USD 1 Month                0.1715
USD 2 Months              0.2140
USD 3 Months              0.2611
USD 6 Months              0.3851
USD 12 Months            0.6773

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           21-May-15         14.19
182d         13-Aug-15         15.33
364d         18-Feb-16         15.95
2yr            27-Apr-17         16.39
3yr            30-May-18       16.28
5yr            13-Feb-20         16.02

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG         195.50      199.50
EURUSD      1.1275       1.1477
GBPUSD       1.5403      1.5604
USDJPY        118.82       118.85
USDCHF      0.94315    0.9533
GBPEUR      1.3532       1.3736
USDZAR      11.3657      11.5691
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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