A Review of the Nigerian Energy Industry

Financial market products & services update

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

31 March 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
FX: The CBN remained at 196.00/197.00 but market closed around 199.05 due to demand still lingering in the system. More appreciation seen in the parallel market as NGN reportedly trading at 215.00/218.00 versus 225.00/228.00 about four weeks ago. Tension in the polity in the build up to the announcement of the election results.

FIXED INCOME: The market opened on a bullish trend which wasn’t too out of place considering the relatively free and peaceful elections over the weekend. Results are presently been collated and should be announced by end of the day. Locals still the only buyers in the market. T-bills can be related to the excess liquidity in the money market as overnight rate remain at 11%, yields dropped an average of 10bps while bonds dropped by 15bps.

Expect a lacklustre trading day today.

NIGERIA: Former Nigerian military ruler Muhammadu Buhari took a lead in the presidential race with half of the 36 states reporting results from the March 28-29 general elections.

Buhari led with 54.6 percent of the vote to 41.6 percent for President Goodluck Jonathan with tallies from 18 states and the Federal Capital Territory, the Independent National Electoral Commission said in Abuja. Five states that Buhari lost to Jonathan in 2011 swung in his favour. Many areas from Jonathan’s stronghold in the south-eastern part of the country haven’t reported.

COMMODITIES: Oil headed for a third quarterly loss as Iranian and Western diplomats worked toward a nuclear deal that may lead to the OPEC member increasing crude exports.

USA: History is repeating in stock and bond markets, where this year’s meandering paths bear more than a passing resemblance to 2014.

On the last day of the first quarter, the Standard & Poor’s 500 Index sits about one percent above its level at the start of the year — tracing almost exactly the same route as in the first three months of 2014. Wheels are spinning for bond investors as Treasuries pare gains from a 2.8 percent advance in January and high-yield bonds mimic last year’s swings.

CHINA: International investors are cashing out of China’s world-beating equity rally. Foreigners sold a net 1.7 billion Yuan ($274 million) of Chinese shares via the Shanghai-Hong Kong exchange link in the week through Monday, while the two biggest Hong Kong exchange- traded funds tracking mainland stocks had withdrawals of $622 million. Money flowed out of the link again on Tuesday as the Shanghai Composite Index dropped from a seven-year high.

Global investors are losing faith in the rally even as mainland traders open up stock accounts at the fastest pace on record and authorities endorse gains that have doubled China’s market capitalization over the past year to a record $6.5 trillion.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   8.4%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     29.836

Money Market Highlights
O/N                                 13.8350
30 Days                           15.6140
90 Days                           16.7135
180 Days                         17.4360

USD 1 Month                 0.1792
USD 2 Months               0.2236
USD 3 Months               0.2741
USD 6 Months               0.4026
USD 12 Months             0.6989

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           25-Jun-15          14.41
182d         10-Sep-15          15.59
364d        03-Mar-16         15.74
2yr            27-Apr-17          15.10

3yr            29-Jun-19         15.02
5yr            13-Feb-20         14.97

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG        198.70       199.40
EURUSD      1.0638       1.0840
GBPUSD       1.4661       1.4863
USDJPY        120.14       120.17
USDCHF       0.96875    0.9789
GBPEUR       1.3643       1.3802
USDZAR      12.0980     12.3014
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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