A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets
Financial markets

30 June 2015, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: In a landmark directive, President Muhammadu Buhari has ordered all revenue generating agencies such as the Nigerian National Petroleum Corporation (NNPC), Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS), Nigerian Ports Authority (NPA), Central Bank of Nigeria (CBN), Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Liquefied Natural Gas (NLNG), amongst others, to pay all their revenues into the Consolidated Revenue Fund (CFR). The president issued the directive during the inauguration of the National Economic Council (NEC) at the Presidential Villa, Abuja, adding that the agencies would henceforth be required to submit budgets for appropriation to meet their expenditure needs annually after their revenue had been remitted. Based on the directive, agencies like NNPC would no longer be allowed to withdraw funds that should have been remitted to the CFR to meet its expenses before remitting whatever balance it deems fit.

FIXED INCOME: Another risk off day with bonds yields average 28bps wider. There was an OMO auction yesterday – subscription was poor and nothing was eventually mopped up. 60days and below bills seeing decent demand.

MONEY MARKET: O/N rates closed at 8%.

UK: The UK economy grew faster than previously estimated in the first three months of the year, official figures have shown. The Office for National Statistics (ONS) said the economy grew by 0.4% in the quarter, compared with an earlier estimate of 0.3%. Growth was boosted by a better performance from the construction industry than previously estimated. Annual growth to March was also revised up to 2.9% from 2.5% previously.

COMMODITIES: The barrel of WTI is following the broader sentiment in the global stock markets, posting its fourth straight loss amidst increasing worries on the Greek situation and the mounting possibility that the country could leave the euro area. Fanning the flames, Greek officials have already announced that Greece will not pay the IMF on Tuesday.

EUROPE: The head of the European Commission made a last-minute offer to try to persuade Greek Prime Minister Alexis Tsipras to accept a bailout deal he has rejected before a referendum on Sunday which EU partners say will be a choice of whether to stay in the euro. But Greek government sources said the leftist premier stood by his rejection of the creditors’ conditions and Greece would default on a crucial repayment due to the International Monetary Fund on Tuesday, plunging it deeper into financial crisis. EU and Greek government sources said Jean-Claude Juncker had offered to convene an emergency meeting of euro zone finance ministers on Tuesday to approve an aid payment to prevent Athens defaulting, if Tsipras sent a written acceptance of the terms. He also dangled the prospect of a negotiation on debt rescheduling later this year if Athens said “yes”. The last-ditch bid from Brussels came after tens of thousands of Greeks, mobilised by Tsipras’ Syriza party demonstrated in Athens against further austerity.

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     29.022

Money Market Highlights
O/N                                   8.6667
30 Days                           14.9334
90 Days                           15.7678
180 Days                         16.7023

USD 1 Month                 0.1866
USD 2 Months               0.2345
USD 3 Months               0.2818
USD 6 Months               0.4464
USD 12 Months             0.7765

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           24-Sep-15         12.21
182d         17-Dec-15         13.42
364d        02-Jun-16         14.26
2yr            27-Apr-17         14.48
3yr            29-Jun-19        14.58
5yr            13-Feb-20        14.82

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         196.00      199.45
EURUSD       1.1049      1.1251
GBPUSD       1.5622      1.5824
USDJPY        122.08      122.11
USDCHF       0.92585    0.9360
GBPEUR       1.4000      1.4204
USDZAR      12.1445     12.3479
JPYNGN      162.9997   163.1003
CHFNGN       213.02     214.71
EURNGN       222.96    224.32
GBPNGN        306.63   308.02
ZARNGN          15.09      17.01

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