A Review of the Nigerian Energy Industry

Financial market products & services update

*Financial markets.
*Financial markets.

08 October 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: The Comptroller-General of Customs, Col. Hameed Ali (rtd), has ordered the immediate removal of rice from import restriction list and the re-introduction of import duty payment at land borders.
The Public Relations Officer of customs, Mr. Wale Adeniyi, made this known in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja. He said the restriction was only applied at land border stations before now, adding that the customs boss had lifted restriction on rice at border stations.
Adeniyi said all rice imports through land borders by rice traders would attract the prevailing import duty of 10% with 60% levy. He added that rice millers (preferential levy) with valid quota allocation would also attract duty rate of 10% with 20% levy on rice importation.

FX: The special auction funds maintained at 196.00/197.50 yesterday. Gross FX reserves on a 30 day moving average now at $30.244bn from $30.37 as at 30 Sept 2015.

FIXED INCOME: T-bills rallied some more in secondary market – testing year lows at 9.68% average yield. Bonds equally moved in the same direction. T-Bill auction prints came in a little softer than expected but strong tone expected to continue into today. 91 day at 10.26% (-52bps from last auction), 182day at 12.99% (-113bps) and 364day at 14.28% (-175bps). Game changer will be if the CBN conducts an OMO auction. Until then, market will likely continue to ride on liquidity with yields closing further south.

U.K: The BOE will release its monthly policy statement at noon Thursday, and investors will be quick to dig for clues on whether officials still believe the U.K. can withstand the slowdown in the world economy.
Since last month’s Monetary Policy Committee meeting, global clouds have been darkening an otherwise rosy domestic picture. With the International Monetary Fund cutting its world outlook, the MPC will provide an assessment of how that is impacting the U.K. No change to the key interest rate is expected, with economists forecasting it will stay at 0.5%.

U.S: The six biggest U.S. banks collectively eked out revenue gains in this year’s first two quarters. That streak was probably toast in the third.
A global asset rout that squeezed bond trading and kept the Federal Reserve from raising rates drove down the firms’ total revenue 2.4% from a year earlier to $101.1 billion in the three months through September, according to analysts’ estimates compiled by Bloomberg. That eroded the increases in the year’s first two quarters that averaged 1.4%.
While U.S. banks have fared better than European rivals — Deutsche Bank AG forecast a $7 billion quarterly loss late Wednesday — they’ve still been battered by the collapse in commodities and volatility sparked by an August plunge in Chinese equities.

COMMODITIES: The global iron ore market came out of the deep freeze on Thursday after a week-long break in China, with prices advancing in Dalian on speculation that steelmakers struggling with overcapacity and sinking prices will continue to operate, sustaining demand.
Futures rose 1.9% to close at 373.5 Yuan ($59) a metric ton on the Dalian Commodity Exchange. Spot ore with 62% content delivered to Qingdao was at $53.14 a ton on Wednesday, unchanged for the third day, according to Metal Bulletin Ltd., as markets and many businesses in China were closed Oct. 1-7.

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     30.244

Money Market Highlights
O/N                                  02.0833
30 Days                           14.0654                                                                                                                            90 Days                          15.3013
180 Days                         16.7049

USD 1 Month                 0.1941
USD 2 Months               0.2498
USD 3 Months               0.3180
USD 6 Months               0.5250                                                                                                                      USD 12 Months             0.8363

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           07-Jan-16          09.13
182d         07-Apr-16         11.69
364d         01-Sep-16          13.00
2yr            27-Aug-17          13.72
3yr            29-Jun-18         13.81
5yr            13-Feb-20         14.83

Indicative Currency Exchange Rates
                         Bid          Offer
USDNG         197.00        199.50
EURUSD       1.1194         1.1396
GBPUSD       1.5231         1.5433
USDJPY        119.71         119.74
USDCHF       0.96225     0.9724
GBPEUR       1.3472        1.3676
USDZAR      13.3939       13.5973
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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