A Review of the Nigerian Energy Industry

Financial market products & services update

*Financial markets.
*Financial markets.

16 October 2015, Sweetcrude, Lagos – Local and international financial market products and services update.

FX: The special auction fund maintained at 197.00 yesterday. Gross FX reserves on a 30 day moving average now at $30.060bn from $30.37 as at 30 Sept 2015.

FIXED INCOME: 5 year and 10 year paper which were re-tapped at Wednesday’s auction opened weaker yesterday while the rest of the bond curve was unchanged. This was short-lived. Bonds and bills rallied harder again and it was a very busy day in both markets. Bid/offer spreads widened for the better part of the day and hopefully will correct by today. Liquidity still surplus with OMO maturity of N283bn replacing FX debits and bringing total back above N1 trillion ($5bn).

COMMODITIES: Gold jumped to the highest in more than three months on Thursday as evidence that economies are slackening from China to Europe damped expectations the Federal Reserve will soon raise interest rates. Signs of stagnating U.S. inflation and retail sales added to the case to keep rates low, which revives the appeal of gold as a store of value.
Bullion for immediate delivery traded at $1,179.60 an ounce at 11:56 a.m. in Singapore, according to Bloomberg generic pricing.

NIGERIA: There were indications that foreign exchange market is on further squeeze as tougher measure to control utilization of foreign currency reserves has come on stream in banks.
Some banks’ currency dealers, who spoke to Vanguard yesterday, said that the Central Bank of Nigeria, CBN, has tightened noose on their foreign exchange transactions with customers by reducing amounts available to individuals.
According to them effective November 1, they will effect a reduction in the annual international spending limit on Naira debit cards from USD50,000 to USD25,000.
Consequently, for customers requiring transaction spending above the limit, they will be required to obtain a dollar debit card by opening an individual domiciliary account funded by electronic transfer to ensure continued card usage abroad.

E.U: European shares rose with Asian stocks, extending a rally that’s added $4.1 trillion to global equities this month as a run of weaker-than-estimated economic reports from China, Europe and the U.S. scuttled bets on the Federal Reserve raising interest rates this year. The dollar pared a third straight weekly drop.
The MSCI Asia Pacific Index is heading for its longest streak of weekly gains since April, with gauges from China, Thailand and New Zealand delivering some of the world’s best returns since Oct. 9. The Shanghai Composite Index surged 6.5% since last Friday, the biggest such advance since before the market peaked in June. U.S. oil advanced for the first time this week.

INDIA: A gauge of expected swings in India’s rupee retreated to a two-month low and headed for a fifth weekly decline as foreign investors snapped up the nation’s assets.
Overseas holdings of rupee-denominated debt increased 131.1 billion rupees ($2 billion) in the last four days, poised for the biggest weekly increase since August 2014. That’s after India granted global funds greater access to sovereign bonds and allowed them to buy notes issued by state governments for the first time. Foreigners have also bought a net $122.8 million of local shares, the latest exchange data show.

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     30.060

Money Market Highlights
O/N                                  01.1550
30 Days                           13.2639                                                                                                                            90 Days                          15.1733
180 Days                         16.8838

USD 1 Month                  0.1990
USD 2 Months                0.2516
USD 3 Months                0.3170
USD 6 Months                0.5201                                                                                                                      USD 12 Months             0.8289

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           14-Jan-16          08.39
182d         14-Apr-16         10.13
364d         06-Oct-16         11.78
2yr            31-Aug-17         12.63
3yr            30-May-18        13.84
5yr            13-Feb-20         13.11

Indicative Currency Exchange Rates
                         Bid          Offer
USDNG         197.00        199.50
EURUSD       1.1297         1.1499
GBPUSD       1.5459         1.5321
USDJPY        119.58         119.61
USDCHF       0.95195     0.9621
GBPEUR       1.3506        1.3710
USDZAR      13.3630       13.5664
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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