A Review of the Nigerian Energy Industry

Financial market products & services update

*Financial markets.
*Financial markets.

06 October 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: President Muhammadu Buhari on Monday promised that the 2016 budget being prepared by his administration would be specially designed to encourage the diversification of the nation’s economy.
He said new policies and measures that would move the economy away from the current dependence on the oil and gas sector would be introduced.
The President, however, did not disclose the specific policies and measures.
According to a statement by his Senior Special Assistant on Media and Publicity, Garba Shehu, Buhari spoke while receiving the President of the Movement of the Enterprises of France, Mr. Pierre Gattaz, and a delegation of French investors at the Presidential Villa, Abuja.

FX: The special auction funds maintained at 196.00/197.50 yesterday. The Vice President mentioned in an interview that the FX restriction is only for a short – term measure.

FIXED INCOME: Yesterday witnessed sufficient buying interest in bonds and bills. With money market long N385bn; there was decent cash to be put to work. Whisper also fuelled the rally that the CBN may not be mopping up any liquidity via OMOs soon. O/N rate closed at a YTD low of 2%. CRR refund is still expected to be credited back to the system. Market volatility remains elevated with players still lacking clear direction.

U.S: U.S. equity-index futures retreated, while Treasuries edged higher with the yen and gold after the Standard & Poor’s 500 Index capped its longest rising streak this year. Indonesia’s stocks and currency surged.
Contracts on the S&P 500 slid 0.5% after the gauge rose for five straight days, and the yield on 10-year Treasuries retreated two basis points. European equities fluctuated after German factory orders unexpectedly fell, underscoring challenges to growth in the area. The rupiah jumped the most since 2013, while Indonesian companies led gains on the MSCI Emerging Markets Index. Commodities slipped.

EUROPE: German factory orders unexpectedly fell in August in a sign that Europe’s largest economy is vulnerable to weaker growth in China and other emerging markets.
Orders, adjusted for seasonal swings and inflation, dropped 1.8% after decreasing a revised 2.2% in July, data from the Economy Ministry in Berlin showed on Tuesday. The typically volatile number compares with a median estimate of a 0.5% increase in a Bloomberg survey.
A China-led slowdown in emerging markets that threatens Germany’s export-oriented economy is exacerbated by an emissions scandal at Volkswagen AG that could affect as many as 11 million cars globally. Still, business confidence unexpectedly increased in Sept. as the economy benefited from strengthening domestic demand on the back of record employment, rising wages and low inflation.

COMMODITIES: Oil’s gain halted near $46 a barrel before U.S. government data forecast to show crude stockpiles in the world’s largest consumer expanded for a second week. Futures were little changed in New York after rising 1.6% on Monday. Inventories probably increased by 2 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. Royal Dutch Shell Plc is planning for a longer period of low prices, Chief Executive Officer Ben Van Beurden said.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   9.30%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     30.343

Money Market Highlights
O/N                                   2.0000
30 Days                           14.6702                                                                                                                            90 Days                          15.8452
180 Days                         17.1314

USD 1 Month                 0.1947
USD 2 Months               0.2604
USD 3 Months               0.3271
USD 6 Months               0.5345                                                                                                                      USD 12 Months            0.8521

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           07-Jan-16          10.36
182d         07-Apr-16         12.93
364d         01-Sep-16          14.03
2yr            27-Aug-17          14.04
3yr            29-Jun-18         14.14
5yr            13-Feb-20         14.59

Indicative Currency Exchange Rates
                         Bid         Offer
USDNG         197.00       199.50
EURUSD       1.1115        1.1317
GBPUSD       1.5053        1.5255
USDJPY        120.15        120.18
USDCHF       0.96845     0.9786
GBPEUR       1.3409        1.3613
USDZAR      13.5874       13.7908
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

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