A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets
Financial markets

24 April 2015, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: The growth recorded by Nigerian banks and other banks in sub-Saharan Africa should provide favourable conditions for the financial institutions in the region in 2015 despite the decline in commodity prices, Fitch Ratings has said. The agency specifically pointed out that in Nigeria, buoyant non-oil and services sectors, plus private consumption are holding up credit demand.

Loan growth in Nigeria climbed to 25% in 2014. According to Fitch, there is strong demand for new lending in Nigeria. The global rating agency noted in a statement yesterday that credit growth was set to expand because of the strong demand for infrastructure financing and the buoyant private sector.

FX: CBN’s special auction rate was maintained at $/NGN 197.00. Latest update has the reserves at $29.505bn [22nd April 2015], slightly up from previous level of $29.48bn [16th April 2015]. No change interbank, bid as usual and illiquid.

FIXED INCOME: CBN’s service blip has dampened the buying seen all week. Bond and T-bill yields crept higher following the uncertainties. Straight two days with the industry’s settlement system down and CBN working round the

clock to resolve the issue. No other alternative has been proposed again regarding the T-bill auction that was moved from Wednesday to yesterday.

MARKET MONEY: Virtually no trades in the money market as a result of the RTGS and S4 outage.

INDIA: India’s rupee headed for its biggest weekly drop since August as foreign funds pulled money from local bonds after the trade deficit widened and the government said overseas investors would have to pay a retrospective tax.

Global funds sold $239 million more rupee notes than they bought in the first three days of the week, data compiled by Bloomberg show. Foreign investors will have a pay a 20% capital gains tax retrospectively, although the levy won’t be imposed on them from this financial year beginning April 1, Finance Minister Arun Jaitley said in an April 14 interview on a local television channel.

EUROPE: The euro strengthened versus the dollar for a second day as euro-area finance ministers met in Riga, Latvia, to discuss economic reforms Greece would need to implement in exchange for more aid.

The 19-nation shared currency rose against all but one of its 16 major peers after Kathimerini newspaper reported that Greece had secured 450 million euros ($489 million) from local authorities to boost government coffers. Earlier this week the administration issued an order for them to hand over cash reserves to the Bank of Greece to ease funding pressures.

COMMODITIES: Oil headed for a sixth weekly advance as renewed speculation that middle east shipment may be disrupted amid Saudi –led airstrikes in Yemen shifted focus from the expanding U.S. glut.

Oil is rebounding from a six-year low in March amid speculations the drilling slowdown and improved fuel demand will help drain a market’s oversupply. Vitol Group, the world’s biggest independent oil trader, said this week that crude prices won’t fall below $50 a barrel for sustained periods.

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     29.505

Money Market Highlights
O/N                                  13.7117
30 Days                           14.8945
90 Days                           16.0570
180 Days                         16.9084

USD 1 Month                 0.1812
USD 2 Months               0.2312
USD 3 Months               0.2770
USD 6 Months               0.4086
USD 12 Months             0.7064

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           23-Jul-15          10.32
182d         15-Oct-15          13.16
364d        07-Apr-16         14.15
2yr            27-Apr-17         13.63
3yr            30-May-18       13.76
5yr            13-Feb-20        13.91

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG         196.00      199.50
EURUSD      1.o789       1.0991
GBPUSD       1.5018       1.5220
USDJPY        119.27       119.30
USDCHF       0.94785   0.9580
GBPEUR       1.3781       1.3985
USDZAR      12.0039     12.2073
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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