A Review of the Nigerian Energy Industry

Financial market products & services update

Financial market
Financial market

03 July 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Central Bank yesterday via another circular reiterated that the ban on the 41 items should not be funded by FX from any segment of the Nigeria FX market, while putting more responsibilities on banks in ensuring that importers comply. The existing policy on BDC transactions that forbids any singular transaction from exceeding $5,000 was also emphasized.

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. There was an oil company in the market – Amount sold was undisclosed.

FIXED INCOME: Bonds traded weaker after Wednesday’s fairly firm session. Street struggling to position as there is no clear direction right now. On bills, Short dated bills (30 days and below) remain the star attraction. In money market, N78bn mopped up via OMOs at 15.18%. O/N rates inched higher because of the OMO and CRR maintenance cycle today. It closed at 10% (+200bps). Actual CRR figures will be known today.

COMMODITIES: The barrel of the American benchmark for the light crude oil is recovering some ground lost after yesterday’s deep pullback, currently hovering around $57.30. Crude oil prices are retreating for the third consecutive week so far, trading in levels last seen in early April around the $57.00 mark. A softer tone in the greenback in response to less auspicious releases in the US calendar has given further respite to WTI today, albeit the recovery proved to be ephemeral eventually.

CHINA: Activity in China’s factory sector expanded slightly in June though not as much as expected, while growth in the services sector sped up, official surveys showed, offering some signs that the world’s second-largest economy may be starting to slowly level out after a raft of support measures. Beijing has rolled out a flurry of steps since last year, including interest rate cuts and more infrastructure spending, but analysts remain wary about the outlook given the still-weak property market, erratic global demand for China’s exports and fears of a collapse in its wild stock market.

EUROPE: Rival camps in Greece are set to hold major rallies in Athens ahead of Sunday’s crucial referendum on an international bailout terms. Prime Minister Alexis Tsipras is expected to be at one rally to support the “No” vote, opposing the terms. EU leaders have warned that a “No” vote could see Greece leave the eurozone. Greece’s economy is already being squeezed after the country lost access to fresh funds. Banks have been shut and limits imposed on cash withdrawals. Greece has been in deadlock with its creditors for months but only called the referendum last week.

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     29.077

Money Market Highlights
O/N                                   7.8333
30 Days                           13.8050
90 Days                           15.2828
180 Days                         15.9440

USD 1 Month                 0.1882
USD 2 Months               0.2342
USD 3 Months               0.2835
USD 6 Months               0.4547
USD 12 Months             0.7871

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           24-Sep-15         12.71
182d         07-Jan-16         13.74
364d        02-Jun-16         14.31
2yr            27-Apr-17         14.72
3yr            29-Jun-19        15.03
5yr            13-Feb-20        14.993

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         196.00      199.45
EURUSD       1.1004      1.1206
GBPUSD       1.5524      1.5726
USDJPY        123.03      123.06
USDCHF       0.93685   0.9470
GBPEUR       1.3968      1.4172
USDZAR      12.1833     12.3867
JPYNGN      161.7197   161.8203
CHFNGN       213.02     214.71
EURNGN       222.96    224.32
GBPNGN        306.63   308.02
ZARNGN          15.09      17.01

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