A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets
Financial markets

12 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.

FIXED INCOME: The CBN sold NGN162.4bn of 168-day bill at 13.7% discount (14.62% yield) in OMO. Pressured by the OMO sale, which takes out most of the N197bn worth of bills that matured today, trading in the bills market turned bearish and yields climbed an average 22bps. The expectation of a tighter liquidity in the money market following the OMO auction caused the selloff. The short end of the bill curve was most impacted. Bond market continued the selloff as the bond auction draws closer. O/N rate closed at 15%.

COMMODITIES: Oil fell for a second day, trimming a weekly advance on signs the global glut will persist as OPEC’s biggest members pumped crude at a record pace (keeping their resolve to defend market share). WTI declined to $60.27/bbl while Brent slide to $64.63$/bbl.

NIGERIA: The National Bureau of Statistics on Thursday released the Consumer Price Index for the month of May, stating that inflation in the country rose by 0.3 percentage points from 8.7 per cent recorded in April to nine per cent. The bureau, in the report made available to our correspondent, blamed the increase in inflation on the upward trend witnessed in the prices of fish, potatoes, yam and meats. The report stated, “In May, the Consumer Price Index, which measures inflation, rose to 9.0 per cent (year-on-year), 0.3 percentage points from the 8.7 per cent rate recorded in April. “Food prices edged higher in May as a result of the late onset of rains, which have pushed back the harvest season, coupled with higher transportation costs due to limited Premium Motor Spirit availability.

US: Bank U.S. stocks rose after data on retail sales and jobs bolstered confidence in the strength of the economy, while investors watched for progress in Greece’s debt. The International Monetary Fund said its team negotiating with Greece left Brussels after failing to make progress on a
debt deal. Meanwhile, European Union President Donald Tusk told Greece Prime Minister Alexis Tsipras to stop manoeuvring and decide whether to accept the conditions on financial aid. Greece’s Tsipras has promised Germany and France that he will step up efforts to find a package of reforms and budget
fixes before the country’s bailout agreement expires at the end of the month.

CHINA: China could cut banks’ reserve-requirement ratios as early as this weekend to spur economic growth and boost cash supply to counter a surge in municipal bond sales. The People’s Bank of China may lower the amount lenders must set aside as reserves by as much as 100 basis points this weekend to 17.5 percent, according to China Merchants Bank Co. analyst Liu Dongliang. That would be the third reduction this year. Exports fell for a third month in May and inflation slowed to the least since January, data showed this week, indicating there’s room for more monetary

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   9.00%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     29.154

Money Market Highlights
O/N                                 13.04667
30 Days                           15.4133
90 Days                           16.5498
180 Days                         17.4621

USD 1 Month                 0.1855
USD 2 Months               0.2375
USD 3 Months               0.2859
USD 6 Months               0.4448
USD 12 Months             0.7880

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           01-Oct-15          13.76
182d         17-Dec-15         11.95
364d        02-Jun-16         14.53
2yr            27-Apr-17         14.01
3yr            29-Jun-19        13.03
5yr            13-Feb-20        14.01

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         195.90      199.40
EURUSD       1.1122       1.1324
GBPUSD       1.5410       1.5612
USDJPY        123.53       123.56
USDCHF       0.92855    0.9387
GBPEUR       1.3718       1.3922
USDZAR      12.2844      12.4878
JPYNGN      160.9497    161.0503
CHFNGN       212.20      213.89
EURNGN       222.55      223.91
GBPNGN        307.77     309.17
ZARNGN          15.10       17.02

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