A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets
Financial markets

21 April 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The country’s monthly revenue prospects from Oil further declined by as much as N86.42 billion in March as gross receipts dropped to N315.04 billion compared to N401.46 billion the previous month.

Briefing journalists at the end of the monthly meeting of the Federation Accounts Allocation Committee (FAAC) in Abuja, Minister of State for Finance, Alhaji Bashir Yuguda, said the continued shutdown and shut-in of trunks and pipelines at various terminals further impacted negatively on crude oil revenue. He however noted that an increase in average price of crude oil from $48.34 million to $55.34 million in February boosted revenue by N43.73 million.

FX: The interbank Market liquidity remained very dire. CBN maintained the special auction rate at 197.00 yesterday as the demand still slightly outweighs supply. The gross FX reserve (30 days moving average) is currently $29.48bn based on latest published figures.

FIXED INCOME: Nigeria bonds opened the week with offers being lifted aggressively, some reversal by midday yesterday and then got back to offers being lifted again to close the day.

T-bill market remains very well bid with average yield down 38bps to 12.75% (these levels were last seen late Jan). T-bill auction on Wednesday 22nd April, on offer will be N 38.71bn 91day, N 45.00bn 182day and N 85.73bn 364day.

MARKET MONEY: Money market liquidity opened NGN130bn long with O/N rates trading 13 -14%.

CHINA: When it comes to stimulating an economy, China is betting state control has its advantages. Confronted with mounting weakness, China’s policy makers are ramping up their response in a shift from their restrained measures last year. The central bank will swap some of its foreign-exchange reserves for stakes in two state-owned policy banks, Caixin reported Monday, allowing them to increase lending for projects such as shantytown redevelopment.

EUROPE: The European Central Bank is studying measures to rein in Emergency Liquidity Assistance to Greek banks, as resistance to further aiding the country’s stricken lenders grows in the Governing Council, people with knowledge of the discussions said.

ECB staff have produced a proposal to increase the haircuts banks take on the collateral they post when borrowing from the Bank of Greece, the people said, asking not to be named as the matter is private. While the measure hasn’t been formally discussed by the Governing Council, it may be considered if Greece’s leaders fail to quickly convince euro-area finance ministers they can reform their economy and secure bailout funds, one of the people said.

COMMODITIES: Oil halted its advance above $57 a barrel before U.S. government data forecast to show crude stockpiles expanded further from a record. June futures were little changed in New York after gaining 1% on Monday. Crude inventories probably increased by 2.5 million barrels last week, a Bloomberg survey showed before an Energy Information Administration report Wednesday. The return of embargoed Iranian oil to world markets looks no closer, according to UBS Group AG.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   8.50%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     29.481

Money Market Highlights
O/N                                  14.5417
30 Days                           15.3919
90 Days                           16.4450
180 Days                         17.4846

USD 1 Month                 0.1805
USD 2 Months               0.2275
USD 3 Months               0.2760
USD 6 Months               0.4054
USD 12 Months             0.6951

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           16-Jul-15           10.24
182d         15-Oct-15          12.50
364d        07-Apr-16         14.48
2yr            27-Apr-17         13.79
3yr            30-May-18        13.85
5yr            13-Feb-20         13.90

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG         198.65       199.35
EURUSD      1.o563       1.0765
GBPUSD       1.4762       1.4964
USDJPY        119.58       119.61
USDCHF       0.95585    0.9660
GBPEUR       1.3836       1.4040
USDZAR      12.0820     12.2854
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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