A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets
Financial markets

16 June 2015, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: A total of N738 billion worth of agricultural products were imported into the country in the first quarter of 2015, according to the National Bureau of Statistics (NBS) in its latest foreign trade reports. Agricultural imports increased by N132.1 billion or 21.8 percent from N606 billion in Q1 2014 to N738 billion in Q1 2015, the data show. The value of Nigeria’s total imports stood at N1.6 trillion at the end of Q1, 2015, a decrease of N385 billion or 19 percent from N2 trillion recorded in the preceding quarter. On year-on-year basis, the value of the country’s imports increased by N99billion or 6.5 percent from the Q1, 2014 value of N1.5 trillion.
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.
US: The strong dollar and cheap oil are hindering US industrial production, but optimism among home builders imply the economy is being buoyed by consumers. Total industrial production dropped 0.2 per cent in May, according to figures published by the Federal Reserve yesterday. New oil drilling declined, and manufacturers were hit by the strength of the dollar, which makes their exports more expensive.

CHINA: China’s stuttering economic growth is translating into gloom among European companies operating here, as the annual survey by the EU Chamber of Commerce showed 39 per cent of 541 respondents were planning to cut costs, with most of them planning job cuts. According to the survey, China’s economy has room to grow. More than half of European companies are optimistic about their growth prospects, though this number has dropped 10 points year-on-year. And nearly a quarter are pessimistic about their profitability outlook.

FIXED INCOME: On bills, flows were mixed but average yield closed +2bps. Saw sellers of the short end (following the OMO auction announcement) and some demand on the long end. At the OMO, NGN79.7bn of 178day paper was mopped up at 14.68% yield. Release of the Q3 bill auction calendar caused decent demand for 24 sep bills which will be offered as 91day paper at next week’s auction. With a healthy issue size of NGN222bn, lots of eager profit takers caused it to close at 12.31% yield (- 35bps from Friday) after trading at a low of 11.66% yield. Bonds remained well bid for most of the day. O/N rates closed at 14%.

COMMODITIES: West Texas Intermediate oil futures pushed higher on Tuesday, as market participants looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer. On the New York Mercantile Exchange, crude oil for August delivery tacked on 48 cents, or 0.81%, to trade at $60.48 a barrel.

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     29.099

Money Market Highlights
O/N                                 13.5417
30 Days                           15.2981
90 Days                           16.6484
180 Days                         17.6663

USD 1 Month                 0.1853
USD 2 Months               0.2348
USD 3 Months               0.2833
USD 6 Months               0.4499
USD 12 Months             0.7919

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           24-Sep-15         12.31
182d         17-Dec-15         12.52
364d        02-Jun-16         14.11
2yr            27-Apr-17         13.03
3yr            29-Jun-19        14.03
5yr            13-Feb-20        14.03

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         195.90      199.40
EURUSD       1.1159       1.1361
GBPUSD       1.5451       1.5653
USDJPY        123.55       123.58
USDCHF       0.92645    0.9366
GBPEUR       1.3711       1.3915
USDZAR      12.3455      12.5489
JPYNGN      160.9797    161.0803
CHFNGN       213.02      214.71
EURNGN       222.96      224.32
GBPNGN        306.63     308.02
ZARNGN          15.09       17.01

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