A Review of the Nigerian Energy Industry

Financial market products & services update

Financial markets.
Financial markets.

03 September 2015, Sweetcrude, Houston – 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 still maintained at 196.00/197.00.

FIXED INCOME: It was a quiet day in the bond market yesterday. Buyers of short dated paper were all around the bills market. Liquidity in money market still in excess of N200bn. Tbill results came out in line with expectations and no impact expected at today’s trading session. O/N rates inched higher to close at 11% after CBN made an ‘announcement’ for Friday’s FX auction. Such announcements are assumed to mean that a decent size could be sold and cash leaving the system would increase (so O/N rates adjusted accordingly). Not expecting much change in bonds tomorrow

COMMODITIES: Oil’s rebound faltered amid signs the global glut will worsen as President Barack Obama secured congressional support for the Iranian nuclear deal and U.S. crude supplies rose the most since April. Inventories climbed by 4.67 million barrels last week, government data showed. Brent slid to $49.95/bbl.

NIGERIA: In what appears to be the unveiling of the economic programme of the President Muhammadu Buhari administration almost 100 days after assuming office, Vice-President Yemi Osinbajo has said the way forward for the country is social sector investment – investing in the people, education, job creation, national school feeding scheme, conditional cash transfer and reflating economies of the states as indices that will boost the economy. He also explained why the growth in the nation’s Gross Domestic Product (GDP) does not seem to impact on Nigerians. He pointed out that some of the ideas on the nation’s economic revival had already been put in place by the Buhari administration, including the bailout package for the workers while some other initiatives were currently being worked out

EU: Mario Draghi may need to convince investors that when he says he’s ready to act, he means it. Weaker commodity prices, slowing trade and a rout in global equities make it likely the European Central Bank president will downgrade the institution’s quarterly inflation forecasts at his press conference on Thursday. While economists see further policy action as unlikely for now, they’ll be tuned in for any language indicating the ECB’s 1.1 trillion-euro ($1.2 trillion) quantitative-easing program could be expanded. Action appears more plausible than at the Governing Council’s last policy meeting in July, with market-based measures now pointing to medium-term inflation falling even further below the goal of just under two percent.

CHINA: China’s metals demand may decline further in the near-term as manufacturing weakens. The August official manufacturing PMI slipped to 49.7 from July’s 50, the threshold for expansion and contraction. The new orders index, a leading indicator of global demand, also fell to 49.7, a three-year low. That suggests the Chinese government’s five interest-rate cuts since November and efforts to loosen bank lending haven’t been enough to boost demand, including in the metals sector.

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     31.302

Money Market Highlights
O/N                                   9.3750
30 Days                           15.6591
90 Days                           16.5951
180 Days                         18.1300

USD 1 Month                 0.2028
USD 2 Months               0.2710
USD 3 Months               0.3325
USD 6 Months               0.5393
USD 12 Months             0.8543

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           03-Dec-15         10.59
182d         03-Mar-16        14.80
364d        04-Aug-16         15.90
2yr            27-Apr-17         15.79
3yr            29-Jun-19        15.84
5yr            13-Feb-20        15.82

Indicative Currency Exchange Rates
                         Bid         Offer
USDNG         197.00       199.50
EURUSD       1.1120        1.1322
GBPUSD       1.5171         1.5373
USDJPY        120.43       120.46
USDCHF       0.96485    0.9750
GBPEUR       1.3509        1.3713
USDZAR      13.3355      13.389
JPYNGN      161.8497    161.9503
CHFNGN       204.99      206.68
EURNGN       217.24       219.60
GBPNGN        309.40     310.79
ZARNGN          14.69      16.61

In this article

Join the Conversation