A Review of the Nigerian Energy Industry

Financial market products & services update

Currency notes, coins and gold bars.
Currency notes, coins and gold bars.

27 April 2015, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: President-elect Muhammadu Buhari has said that his administration will revisit the $20 billion money alleged to have been unremitted by the Nigerian National Petroleum Corporation (NNPC) to the Federation Account.

The allegation on the missing $20 billion was first made in January 2014 by the ousted Governor of the CBN, Muhammad Sanusi II, who claimed at a Senate public probe that, among other allegations, NNPC’s exploration and production subsidiary – Nigerian Petroleum Development Company – failed to remit $6 billion; while another $3.8 billion was tied to the kerosene subsidy regime.

FX: CBN’s special auction rate was maintained at $/NGN 197.00. Latest update has the reserves at $29.505bn [23rd April 2015], slightly up from previous level of $29.48bn [16th April 2015]. No change interbank, bid as usual and illiquid.

FIXED INCOME: Trading activities stalled on Friday as a result of the CBN’s system downtime. Market tried to trade before FMDQ requested that trading should stop because of backlog of unsettled transaction. Wednesday’s T-bill auction was conducted on Friday for value 23 April and is being processed manually by the CBN with the results released today.

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

CHINA: China Inc. is turning to the stock market for a cure to its unprecedented debt hangover. As authorities show a newfound tolerance for defaults and debt levels at Shanghai Composite Index members climb to all- time highs, Chinese companies are increasingly tapping the equity market for funds to pay down liabilities and invest in growth. They’ve announced $82 billion of secondary stock offerings in 2015, a figure UBS Group AG predicts will increase to a record $161 billion by December. That comes on top of $10 billion already raised through IPOs.

EUROPE: Greece is struggling to amass cash to pay its pensioners and employees this week, as the country and its creditors resume efforts to break the deadlock in bailout talks.

Europe’s most-indebted state is counting on deposits of local governments, cities and other funds to meet end-of month payments of over 1.5 billion Euros ($1.6 billion) after euro area finance ministers on Friday said they won’t disburse more aid until bailout terms are met. That may further strain liquidity buffers at banks, after households and companies withdrew almost 1.3 billion euros in savings last week.

COMMODITIES: Oil traded near the highest price since December on concern that Middle East supplies may be disrupted as Saudi Arabia expanded its military campaign in Yemen.

In Libya, members of the Petroleum Facilities Guard shut the Elephant oil field on Saturday over unpaid salaries, according to National Oil Corp. Oil has advanced more than 18% this month amid speculation that unrest in Yemen may spread and threaten shipments from the world’s biggest crude-producing region.

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                                   9.8825
30 Days                           14.1761
90 Days                           15.1957
180 Days                         15.8345

USD 1 Month                 0.1815
USD 2 Months               0.2322
USD 3 Months               0.2790
USD 6 Months               0.4089
USD 12 Months             0.7059

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         13.66
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       1.0950
GBPUSD       1.5044       1.5246
USDJPY        119.20       119.23
USDCHF       0.95105   0.9612
GBPEUR       1.3859       1.4063
USDZAR      12.0054     12.2088
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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