A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets
Financial markets

11 June 2015, Sweetcrude, Houston – Local and international financial market products and services update.
FX: No significant change in the market as the two way quote FX market remains shut. Special auction funds filled still at 195.90/196.90. Interbank markets still bid with very little done in bi-lateral trading. About $40m is estimated to have been filled via the CB special auction yesterday.

FIXED INCOME: O/N rates jumped to 19% yesterday as money market liquidity reduced to NGN51bn. NGN196.89bn of OMO bills maturing today will give some support. Traded bond volumes increased yesterday following the previous day’s circular. The larger size being offered at the June 17 auction makes upside risk to yields dominant hence the selling pressure witnessed on bonds towards market close. The Tbill market saw some small sellers on the short end and buyers on the long end, overall closing 4bps lower.

COMMODITIES: Oil halted its advance after risking to a six-month high as investors weighed record Saudi production against signs the U.S. supply glut is easing. Brent slid to $65.40/bbl. Saudi Arabia, the world’s largest crude exporter boosted output by 25,000bbls in April based on data communicated to OPEC.

NIGERIA: The Between January and March this year, 469,070 jobs were created in various sectors of the Nigerian economy, figures released by the National Bureau of Statistics on Wednesday indicated. The 469,070 jobs created in the first quarter of the year were 99,485 jobs or 26.95 per cent higher than the 369,485 created in the fourth quarter of 2014. The NBS, in the job creation report for the first quarter, a copy of which was made available to our correspondent on Wednesday, stated that the informal sector created 130,941 or 27.92 per cent of the total jobs created. Between January and March this year, 469,070 jobs were created in various sectors of the Nigerian economy, figures released by the National Bureau of Statistics on Wednesday indicated.

US: Banks Members of Congress are raising the possibility of a U.S. government shutdown this year as a spending standoff focuses on a high-stakes target: the Defense Department policy bill, usually backed by large majorities. Democrats are using the bill authorizing funds for military troop levels and equipment to argue for an agreement boosting U.S. spending on domestic programs above budget limits Congress enacted in 2011. Republicans say President Barack Obama has drawn a politically perilous line by threatening to veto the defense measure.

CHINA: China’s broadest measure of new credit grew more than economists estimated in May, as the effects of monetary easing took hold. Improving lending could ease policy makers’ concern that banks aren’t pumping enough money into the slowing economy. Weak demand and a crackdown on shadow banking had led to subdued credit flows this year even as the PBOC cut interest rates three times since November and reduced bank’s reserve ratio requirements.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   8.70%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     29.181

Money Market Highlights
O/N                                  19.0833
30 Days                           15.7738
90 Days                           17.0239
180 Days                         17.9681

USD 1 Month                 0.1881
USD 2 Months               0.2365
USD 3 Months               0.2879
USD 6 Months               0.4416
USD 12 Months             0.7820

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           01-Oct-15          13.24
182d         17-Dec-15         12.20
364d        02-Jun-16         14.44
2yr            27-Apr-17         13.90
3yr            29-Jun-19        13.98
5yr            13-Feb-20        13.97

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         195.90      199.40
EURUSD       1.1207       1.1409
GBPUSD       1.5363       1.5565
USDJPY        123.19       123.22
USDCHF       0.92565    0.9358
GBPEUR       1.3573       1.3777
USDZAR      12.2534      12.4568
JPYNGN      161.3597    161.4603
CHFNGN       210.71      212.40
EURNGN       221.98      223.34
GBPNGN        303.74     305.13
ZARNGN          14.98       16.90

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