A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets.
Financial markets.

24 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 changed to 196.00/197.00 on thursday.

FIXED INCOME: O/N funding raced north to close at 30% due to low market liquidity. Bond auction debit and CRR cycle to drain more liquidity from the system. Trading in tbills market continued the bearish run as a result of tighter system liquidity. The bonds market is still experiencing a bullish trend. The market expects the outcome of the MPC meeting today.

COMMODITIES: Brent held losses near a two-week low amid a broader rout in commodities as Iran’s plan to regain market share bolstered speculation a global glut will persist. Iran is seeking to restore production once sanctions are removed regardless of the impact on prices, Oil Minister Bijan Namdar Zanganeh said. U.S. crude stockpiles are set to remain almost 100 million barrels above the five-year seasonal average. Brent’s recovery from a six-year low has faltered on signs the surplus will be prolonged as Iran seeks to restore output after its nuclear accord with world powers.

NIGERIA: The Nigeria’s central bank will probably keep rates at a record high even as inflation rises above its target band as it awaits guidance from President Muhammadu Buhari in its first policy meeting since he took office. Almost two months after Buhari came to power, investors and the central bank are still waiting for him to form a cabinet and oversee economic policy. The Monetary Policy Committee will hold the rate at 13 percent, where it has been since November, according to 21 of 23 economists surveyed by Bloomberg. Governor Godwin Emefiele is due to announce the decision at a press conference scheduled to begin at 2 p.m. today in the capital, Abuja.

CHINA: The International Monetary Fund has urged China to eventually unwind measures taken to stem a stock sell-off that wiped out almost $4 trillion in market value, according to a person familiar with the matter. The Washington-based fund told the Chinese government that while interventions in general are appropriate to prevent major disorder, prices should be allowed to settle through market forces, said the person, who is familiar with IMF discussions on the issue and asked not to be identified because the talks are private. Chinese officials assured the lender that the measures should be considered temporary.

EUROPE: Negotiations between Greece and its creditors on third bailout should now begin swiftly, European Commission spokeswoman says. Greece has legally implemented second of two sets of measures agreed on at summit of euro-area leaders on July 13, according to Commission, European Central Bank and International Monetary Fund assessment. This assessment has been sent to secretariat of Euro-group and officials from creditor institutions will start work in Athens soon. EU will continue to work with Greek authorities on all parts of comprehensive reform package agreed at summit.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   9.20%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     30.697

Money Market Highlights
O/N                                  29.5417
30 Days                           15.7357
90 Days                           16.9407
180 Days                         17.5568

USD 1 Month                  0.1905
USD 2 Months               0.2445
USD 3 Months               0.2951
USD 6 Months               0.4700
USD 12 Months             0.8072

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           29-Oct-15          14.20
182d         21-Jan-16         13.70
364d        02-Jun-16         14.39
2yr            27-Apr-17         14.69
3yr            29-Jun-19        14.75
5yr            13-Feb-20        14.49

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         196.50      199.50
EURUSD       1.0845      1.1047
GBPUSD       1.5382      1.5584
USDJPY        123.88      123.91
USDCHF       0.95645   0.9666
GBPEUR       1.4043      1.4247
USDZAR      12.4014     12.6048
JPYNGN      160.2097   160.3103
CHFNGN       206.39      208.08
EURNGN       216.38    217.75
GBPNGN        307.67     309.06
ZARNGN          14.92      16.84

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