A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets
Financial markets

01 July 2015, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: The nation’s total debt rose to N12.1tn ($60.8bn) as of March 2015, up from N11.2tn at the end of December 2014, data obtained from the Debt Management Office showed. The statistics also showed that foreign debt stood at $9.46bn at the end of March, down from $9.71bn at the end of 2014. This means that the current foreign debt is about 15 per cent of the total debt. The Federal Government had in 2013 said it would increase the amount it borrowed overseas to 40 per cent of the total debt over a three-to-five year in order to tap into loose monetary policy in advanced economies.

FIXED INCOME: Flows were net sellers of risk across the bond curve as locals and investors remain on the sidelines waiting for something definitive on the FX markets. Most of the day, bonds traded weak and closed average 14.85% yield (+19bps). Lots of cash finding a home in short dated bills as money market long N298.36bn with another N260bn. Rest of the bill curve recorded a marginal +2bps move, as yields were mixed across most of the other tradable maturities. O/N rates closed unchanged at 8%.

FX: No significant change in the market as the two way quote FX market remains shut. Special auction funds remained at 195.95/196.95.

US: The U.S. economy probably bounced back to an annual growth rate of around 2.5 percent in the second quarter, and the labor market is approaching full employment, Federal Reserve vice chairman Stanley Fischer said on Tuesday. He said “tentative” signs of wage growth and continued job creation also gave him confidence that U.S. labor markets will continue improving, and gradually push inflation towards the Fed’s 2 percent target.

EUROPE: Greece has missed the deadline for a €1.5bn (£1.1bn) payment to the International Monetary Fund (IMF), hours after eurozone ministers refused to extend its bailout. But the ministers say they will discuss a last-minute request from Greece for a new two-year bailout on Wednesday. Greece is the first advanced country to fail to repay a loan to the IMF and is now formally in arrears. There are fears that this could put Greece at risk of leaving the euro. The IMF confirmed that Greece had failed to make the payment, shortly after 22:00 GMT on Tuesday. “We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared,” said IMF spokesman Gerry Rice.

COMMODITIES: WTI oil futures on the Nymex dipped in Asia and extend losses heading in to European session as traders digest the latest developments in Greece and Iran as well as the fresh US inventory report. Currently, WTI trades -1.40% lower at 58.63, retracing from 59.09 highs. Oil prices edged lower yesterday after the latest data showed a rise in US stockpiles and production, with the crisis in Greece weighing on the commodity as well.

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     29.008

Money Market Highlights
O/N                                   8.0833
30 Days                           14.6278
90 Days                           15.9834
180 Days                         16.7887

USD 1 Month                 0.1866
USD 2 Months               0.2337
USD 3 Months               0.2837
USD 6 Months               0.4429
USD 12 Months             0.7660

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           24-Sep-15         12.46
182d         07-Jan-16         13.69
364d        02-Jun-16         14.28
2yr            27-Apr-17         14.78
3yr            29-Jun-19        14.98
5yr            13-Feb-20        14.98

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         196.00      199.45
EURUSD       1.1047      1.1249
GBPUSD       1.5567      1.5769
USDJPY        122.82      122.85
USDCHF       0.93195    0.9421
GBPEUR       1.3952      1.4156
USDZAR      12.0507     12.2541
JPYNGN      162.0197   162.1203
CHFNGN       213.02     214.71
EURNGN       222.96    224.32
GBPNGN        306.63   308.02
ZARNGN          15.09      17.01

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