A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets
Financial markets

10 July 2015, Sweetcrude, Lagos – 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 remained at 195.95/196.95.

FIXED INCOME: A bit of a reversal yesterday in both bills and bonds markets. Small client demand caused most of yesterday’s bond losses to be reversed. N179.05bn mopped up via OMOs (leaving N213bn in the money market) caused a reversal of the gains seen in the last few days on short dated bills. O/N rates moved higher to close at 9%. Overall, both bond and bill markets are relatively calm and still expect a quiet session tomorrow.

COMMODITIES: Oil rose for a second day on signs Iran and world powers will miss another deadline for a nuclear deal that could end sanctions on the OPEC producer. Oil’s advance is paring a second weekly loss driven by China’s equities rout and the turmoil in Greece. Iran, the fourth-largest producer in the Organization of Petroleum Exporting Countries, plans to boost crude exports and recapture market share if international sanctions are lifted. Brent gained $1.05/bbl, to $59.66/bbl.

NIGERIA: In a bid to end the fuel shortages across the country, the federal government has approved fuel import allocations for the third quarter of 2015 to 29 oil marketing and trading companies. The 29 marketers include the Nigerian National Petroleum Corporation (NNPC), which in the last couple of months has struggled to sustain supply. Thisday learnt that the approval was given by President Muhammadu Buhari to the Petroleum Products Pricing Regulatory Agency (PPPRA) to allow NNPC and other oil marketers to import fuel into the country this quarter.

EU: The government of Greek Prime Minister Alexis Tsipras sought a three-year bailout loan of at least 53.5 billion euros ($59.2 billion), in a last-ditch effort to keep the country in the euro. In exchange, it offered a package of reforms and spending cuts, including pension savings and tax increases, similar to the one presented by creditors last month. The proposal was submitted to European institutions late Thursday and will be presented to the Greek Parliament Friday. It is set to be discussed at a summit of European Union leaders Sunday to determine whether Greece gets a new bailout, or be forced to leave the single currency.

US: The Obama administration is caught in a trap as it tries to bring home a trade deal with its Pacific Rim partners. Some of the chief beneficiaries may be big drug companies like Novartis AG, Roche Holding AG, and Pfizer Inc. while the losers could be consumers in both the U.S. and the region. The administration says it’s bound by congressionally imposed instructions to try to get as much current U.S. law as possible into trade accords — including stringent protections for patented drugs that it’s repeatedly tried to ease at home to encourage more cost-saving generics.

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     29.719

Money Market Highlights
O/N                                   5.3350
30 Days                           13.0677
90 Days                           15.0944
180 Days                         16.1675

USD 1 Month                 0.1867
USD 2 Months               0.2363
USD 3 Months               0.2860
USD 6 Months               0.4499
USD 12 Months             0.7534

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           15-Oct-15          13.38
182d         07-Jan-16         13.69
364d        02-Jun-16         14.42
2yr            27-Apr-17         14.72
3yr            29-Jun-19        15.01
5yr            13-Feb-20        15.05

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         196.95      199.45
EURUSD       1.1012      1.1214
GBPUSD       1.5349      1.5551
USDJPY        122.17      122.20
USDCHF       0.93465   0.9448
GBPEUR       1.3801      1.4005
USDZAR      12.2929     12.4963
JPYNGN      162.9597   163.0603
CHFNGN       211.15     212.84
EURNGN       220.69    222.05
GBPNGN        306.56   306.96
ZARNGN          15.11      17.03

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