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 March 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The nationwide fuel scarcity, which hit Abuja, Lagos and other parts of the country for the past one week owing to the inability of the Federal Government to pay outstanding subsidy arrears to oil marketer will soon end. This is because the Federal Ministry of Finance has paid major oil markers over N100 billion out of the N264 billion outstanding debt. Thomas Olowora, the Executive Secretary, Major Marketers Association of Nigeria (MOMAN), who confirmed the latest development with Daily Independent on Thursday, agreed that Minister of Finance, Ngozi Okonjo-Iweala, has paid about N100 billion to the accounts of marketers through Sovereign Debt Notes (SDN).

FX: Partial fill at today’s special auction with CB reportedly prioritising petroleum marketers after the dire FX liquidity situation took a toll on the local supply of petroleum products the last one week. Interbank market remained extremely illiquid and bid with very few offers seen in the day’s session. Range seen today was 197.00-199.50; CB’s special auction closed at 197.00.

FIXED INCOME: The Tbills market pulled back a bit yesterday following the auction result. Most of the selling was done on the shorter end of the Tbills curve, day on day the yields moved up an average of 45bps. Bond was the opposite as we saw buyers in the market, the yield dropping by 37bps. Client interest still limited in the market. CBN issued NGN44.69bn more of the 27th August OMO bills today at 15.99% yield. O/N still 11% as liquidity is still about NGN230bn after the OMO deduction.

COMMODITIES: Brent crude rose to trade near US$61 a barrel on Friday as geopolitical tensions in Libya and Iraq stoked supply worries, while traders eyed US rig counts and the outcome of Iran nuclear talks for further trading cues. Fighting has escalated in northeast Iraq where the Isis militants have lit up oil wells to deter Shia militiamen and Iraqi soldiers from advancing. In Libya, worsening security conditions have led to the closure of 11 oilfields.

CHINA: China cut pay for top executives at its biggest banks and some other state-owned companies as part of efforts to combat inequality, said people with knowledge of the matter. Senior managers at the nation’s five largest lenders — all of which are government-controlled — had their total compensation for this year cut to no more than about 600,000 yuan ($95,700), said the people, who asked not to be named discussing private information. Industrial & Commercial Bank of China Ltd. Chairman Jiang Jianqing earned about 2 million yuan in 2013.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                 9.97%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     30.969

Money Market Highlights
O/N                                  11.0033
30 Days                           15.3839
90 Days                           16.7166
180 Days                         17.5832

USD 1 Month                0.1750
USD 2 Months              0.2150
USD 3 Months              0.2636
USD 6 Months              0.3971
USD 12 Months            0.6880

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           21-May-15         15.10
182d         03-Sep-15         15.75
364d         18-Feb-16         16.38
2yr            27-Apr-17         16.40
3yr            30-May-18       16.07
5yr            13-Feb-20         16.06

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG        199.10       199.90
EURUSD      1.0913        1.1115
GBPUSD       1.5122      1.5324
USDJPY        120.11       120.14
USDCHF      0.97045    0.9806
GBPEUR      1.3720       1.3924
USDZAR      11.6938     11.8972
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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