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.

01 April 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: Three decades after seizing power in a military coup, Muhammadu Buhari became the first Nigerian to oust a president through the ballot box, putting him in charge of Africa’s biggest economy and one of its most turbulent democracies. As the scale of this weekend’s electoral landslide became clear, President Goodluck Jonathan called Buhari yesterday to concede defeat to the opposition leader, Buhari’s camp said, an unprecedented step that should help to defuse anger among Jonathan’s supporters. In the religiously mixed northern city of Kaduna, where 800 people were killed in violence after the last elections in 2011, Buhari supporters streamed onto the streets, waving flags, dancing and singing in celebration. There was no word from Jonathan himself. But supporters in the Niger Delta, the defeated president’s home area and the heart of Africa’s biggest oil and gas industry, were despondent.

FX: The CBN intervention 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.

FIXED INCOME: Markets were well bid as we brought down the curtain on the month and the quarter. Buying cares continue to be seen around but offers also being protected as street happy to hold paper. Overall market has had a good tone with all the election buzz as gradually some confidence is being restored. As we start the liquid month of April, we expect continued demand in the fixed income space.

MARKET MONEY: The money market remained between 12% – 13.75% as liquidity is seen in the market. The Money market liquidity opened NGN 192bn long.

CHINA: China’s benchmark stock index rose to the highest level since March 2008 after government data showed manufacturing unexpectedly expanding. XJ Electric Co. and TBEA Co. rallied 10% to lead gains for industrial companies. The official Purchasing Managers’ Index climbed to 50.1 in March, exceeding the estimate of 49.7 and February’s 49.9, while HSBC Holdings Plc and Markit Economics’ manufacturing PMI surpassed analysts’ forecasts.

USA: The dollar weakened, after a gauge of the currency had its strongest three-quarter gain on record, amid bets the Federal Reserve will raise interest rates slowly.

The Bloomberg Dollar Spot Index surged 20% since the end of June as more than two dozen central banks, including those in Australia, Canada and Europe, eased monetary policy this year. The dollar pared those gains on Wednesday after a Chinese manufacturing gauge rebounded in March, damping demand for the U.S. currency as a haven.

COMMODITIES: Oil traded near the lowest price in a week as negotiators gave differing views about the progress of talks for a nuclear deal with Iran that may allow the OPEC producer to increase crude exports.

Futures were little changed in New York after falling 2.2% on Tuesday to cap a third quarterly drop. The foreign ministers of Russia and Iran said consensus on major points of an accord were reached and a statement may be drafted Wednesday.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   8.40%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     29.797

Money Market Highlights
O/N                                 13.7500
30 Days                           15.6910
90 Days                           16.5021
180 Days                         17.6398

USD 1 Month                 0.1762
USD 2 Months               0.2218
USD 3 Months               0.2707
USD 6 Months               0.4006
USD 12 Months             0.6942

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           25-Jun-15          14.37
182d         10-Sep-15          15.77
364d        03-Mar-16         16.24
2yr            27-Apr-17          15.01

3yr            29-Jun-19         14.99
5yr            13-Feb-20         14.97

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG        198.00       199.40
EURUSD      1.0643       1.0845
GBPUSD       1.4719       1.4921
USDJPY        119.86       119.89
USDCHF       0.96685   0.9770
GBPEUR       1.3692       1.3896
USDZAR      11.9818     12.1852
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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