A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets
Financial markets

14 April 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The World Bank Chief Economist for Africa, Mr. Francisco Ferreira, on Monday welcomed the resolve of Nigeria’s President-elect, Major-General Muhammadu Buhari (rtd), to visit past corrupt practices, stressing that it would help strengthen public institutions and promote cleanliness in politics and management of public resources.

Answering questions from journalists across sub-Saharan Africa via video-conferencing from Washington on the occasion of the launch of Africa’s Pulse, a bi-annual World Bank Group analysis of the issues shaping Africa’s economic prospects, he said the current emphasis of the “elected government to look at what happened in the past hopefully would have consequences for the future.”

FX: CB’s special auction has been maintained at $/NGN 197.00 and offshore demand remain prioritised. An estimated $100m-$120m was sold yesterday. Not much impact on interbank trading expected as most participating banks are likely to use the funds in meeting internal demand. Market wide demand is estimated to be north of $900m as at yesterday.

FIXED INCOME: The demand for T-bills was weak as rates inched higher with money market liquidity tighter following the routine CRR maintenance by CBN. Whispers are that amount debited was NGN110bn. T-bills market to persist, with demand likely to strengthen marginally towards the end of the week on OMO maturity on Thursday (NGN189bn).

MARKET MONEY: Money market liquidity declined to NGN 25bn with O/N rates ranging 60% – 80%.

INDIA: A gauge of expected swings in India’s rupee fell toward a four-month low on speculation the central bank will keep intervening to maintain stability in the currency.

Bank of America Merrill Lynch predicts the monetary authority will buy $62.5 billion in the next 12 months to keep the rupee competitive, economist Indranil Sen Gupta said in an April 9 interview. The nation’s foreign-exchange reserves have climbed to a record $343 billion, according to Reserve Bank of India data. The rupee has gained 1.1% this year, the second-best performance in Asia after the Taiwan dollar.

U.K: U.K. consumer prices probably stagnated for a second month in March as an increase in gasoline prices spares the country from outright deflation again.

The inflation rate remained at zero, unchanged from February, according to the median of 34 estimates in a Bloomberg News survey. Eight economists forecast a below-zero reading in the report due from the statistics office in London on Tuesday.

Weak U.K. price growth means there’s little pressure on the Bank of England to raise its key interest rate from a record-low 0.5%, where it’s been for more than six years.

COMMODITIES: Gold fell for a second day to a two-week low before the release of U.S. retail sales data that may strengthen the case for the first increase in borrowing costs since 2006. Silver, platinum and palladium dropped.

Bullion for immediate delivery declined as much as 0.7% to $1,190.18 an ounce, the lowest price since April 1, and traded at $1,193.84 at 3:05 p.m. in Singapore, according to Bloomberg generic pricing. Gold in Shanghai fell.

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     29.589

Money Market Highlights
O/N                                  66.7917
30 Days                           15.9847
90 Days                           16.9884
180 Days                         18.0339

USD 1 Month                 0.1815
USD 2 Months               0.2273
USD 3 Months               0.2753
USD 6 Months               0.4052
USD 12 Months             0.7034

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           09-Jul-15          11.88
182d         01-Oct-15          15.01
364d        07-Apr-16         15.47
2yr            27-Apr-17          14.64
3yr            30-May-18        14.67
5yr            13-Feb-20         14.66

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG         198.69      199.39
EURUSD      1.o452       1.0654
GBPUSD       1.4551       1.4753
USDJPY        119.79       119.82
USDCHF       0.97215    0.9823
GBPEUR       1.3783       1.3987
USDZAR      12.0303     12.2337
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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