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.

02 April 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: Nigerian stocks surged the most since March 2010, leading gains among world equity markets, after former military ruler Muhammadu Buhari won the presidential election; marking the first peaceful shift in power since the end of colonial rule in 1960. The Nigerian Stock Exchange All Share Index rose for a ninth day to extend its longest streak of gains since December 2012. The West African nation’s $500 million of Eurobonds due July 2023 advanced for the 11th day, pushing the yield down to the lowest since Dec. 8, as President Goodluck Jonathan conceded defeat, reducing the threat of post-election violence.

FX: CBN continued the special auction yesterday, maintaining the intervention rate at 197.00. It’s estimated that about $70m-$100m was sold at yesterday’s auction. Market was also buoyed by the presence of two oil majors offering over $120m. Interbank range remain unchanged at 197-199.50 range.

FIXED INCOME: Buyers came in aggressively again yesterday and bonds gapped on the back of successful elections. All offers wanted. July 2034s remain quiet with only NGN100mm traded yesterday. Rest of the bond curve traded heavy volumes especially June 19s and March 24s – NGN16.85bn and NGN16.15bn respectively. T-bill market not left out of the excitement but moves not as voracious as bonds. Average yield on benchmark bonds now 13.99% and on T-bill 14.26%.

MARKET MONEY: Money market liquidity opened at NGN170bn long with O/N rates at 12%. Demand should still persist today but with a softer tone.

China’s benchmark money-market rate fell to a three-month low on speculation a rule allowing social security funds to invest in the interbank market will lower borrowing costs. The government will let the funds buy certificates of deposit on the interbank market and municipal bonds, according to a statement on the central government’s website Wednesday.

Chinese local governments will sell more than 1.6 trillion Yuan ($258 billion) of notes this year, based on data from the Ministry of Finance, as the nation tries to set up a more transparent budget and fiscal system.

USA: U.S. equity-index futures dropped with the dollar as investors await U.S. jobs data. Oil pared its weekly gain while Asian stocks halted their longest slump since February.

Futures on the Standard & Poor’s 500 Index fell 0.3% by 8:23 a.m. in London, while the Stoxx Europe 600 Index fluctuated. Dollar Spot Index fell 0.3% as the euro jumped 0.6%. U.S.oil dropped 0.9%. Traders are focused on Friday’s monthly payrolls report after the Federal Reserve said the timing of its first interest- rate increase since 2006 will depend on strong economic data.

COMMODITIES: Oil headed for a third weekly advance after rising the most in two months as U.S. crude production slowed from the fastest pace in more than three decades. Futures slid as much as 1.4% in New York in the last day of trading for this week, trimming gains since March 27 to 1.7% U.S. output shrank by 36,000 barrels a day to 9.39 million a day last week.

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     29.789

Money Market Highlights
O/N                                 12.6685
30 Days                           15.5486
90 Days                           16.6926
180 Days                         17.5973

USD 1 Month                 0.1775
USD 2 Months               0.2236
USD 3 Months               0.2707
USD 6 Months               0.4034
USD 12 Months             0.6981

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           25-Jun-15          14.40
182d         10-Sep-15          15.08
364d        03-Mar-16         15.72
2yr            27-Apr-17          13.87
3yr            29-Jun-19         13.97
5yr            13-Feb-20         13.98

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG        198.70       199.40
EURUSD      1.0715       1.0917
GBPUSD       1.4737       1.4939
USDJPY        119.51       119.54
USDCHF       0.95915    0.9693
GBPEUR       1.3617       1.3821
USDZAR      11.8586     12.0620
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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