A Review of the Nigerian Energy Industry

Financial market products & services update

Coins on a chart.
Coins on a chart.

14 May 2015, Sweetcrude, Houston – Local and international financial market products and services.
FX: Three oil majors offered an estimated over $80m yesterday. The auctions reportedly closed at $/NGN 199.00. Yesterday’s special auction closed with all modalities maintained. The CB sold an estimated $100m-$120m. Current estimate of amount sold via the special auction window since inception on 13th February is $4.62bn. Daily average market turnover estimated around $153m.

FIXED INCOME: A very active day in bonds. N60bn traded with a good chunk of that across the March 2024s and July 2034s. Demand on bonds was driven by whispers of offshore investors interested in yesterday’s bond auction. Prints came in very strong at 13.845% (-60bps) on the 5year, 13.48% (-74bps) on the 10year and 13.88% (-58bps) on the 20 year and will cause more rally today. T-bills trading saw yields closing wider as money market liquidity continues to reduce. O/N rates inched higher again to close at 12%.

NIGERIA: Nigeria’s real Gross Domestic Product (GDP) growth rate further declined to 3.86 percent in the first quarter of the year (Q1 2015) compared to 5.94 percent the previous quarter, according to the National Bureau of Statistics (NBS). Also, the Consumer Price Index (CPI) which measures inflation rose further to 8.7 per cent in April compared to 8.5 percent in March. However, the country’s GDP growth rate was lower by 2.25% from the preceding quarter and by 1.98% from the corresponding quarter of 2014.
April CPI up by 20bp to 8.70% from 8.50% in March.

US: The dollar slipped toward a four-month low versus major peers, while Treasuries halted their slide and European bonds fluctuated amid a selloff that’s wiped more than $400 billion from global markets. U.S. crude oil fell and European stocks pared declines. The Bloomberg Dollar Spot Index retreated 0.2 percent by 9:06 a.m. in London and lost 0.4 percent to $1.1396 per euro.

The yield on 10-year Treasuries fell four basis points to 2.25 percent and German bunds swung between gains and losses. The Stoxx Europe 600 Index dropped 0.2 percent and Standard & Poor’s 500 Index futures rose 0.3 percent. Oil slipped 0.6 percent in New York. Russia’s ruble fell 1.6 percent as the central bank sold the currency for the first time in almost a year.

CHINA: China’s overnight money rate dropped for a record 19th day amid speculation the central bank will step up monetary easing to counter a slowdown in the economy. Industrial output and new loans trailed estimates in April, data showed Wednesday. That followed worse-than-expected trade and inflation figures in the past week. The People’s Bank of China, which has lowered benchmark interest rates three times and cut reserve-requirement ratios twice since November, will ease further, according to a Bloomberg survey.

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     29.670

Money Market Highlights
O/N                                  11.8750
30 Days                           14.1230
90 Days                           15.4964
180 Days                         16.6006

USD 1 Month                 0.1856
USD 2 Months               0.2246
USD 3 Months               0.2739
USD 6 Months               0.4141
USD 12 Months             0.7303

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           06-Aug-15         10.31
182d         15-Oct-15          12.64
364d        21-Apr-15          15.17
2yr            27-Apr-17         13.59
3yr            29-May-19       13.46
5yr            13-Feb-20        13.43

Indicative Currency Exchange Rates
                          Bid       Offer
USDNG         198.78      198.48
EURUSD      1.1295       1.1497
GBPUSD       1.5662      1.5864
USDJPY        119.22      119.25
USDCHF       0.90945   0.9196
GBPEUR       1.3730      1.3934
USDZAR      11.8105     12.0139
JPYNGN      166.9097  167.0103
CHFNGN       215.03      216.72
EURNGN        N/A         N/A
GBPNGN         N/A         N/A
ZARNGN         N/A         N/A


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