A Review of the Nigerian Energy Industry

Financial market products & services update

*Financial  markets
*Financial markets.

06 November 2015, Sweetcrude, Lagos – Local and international financial market products and services update
NIGERIA: The federal government has approved the payment of N413 billion to oil marketers being the outstanding payments for subsidy claims.
The approval is coming on the heels of a brewing fuel supply crisis over non-payment of the subsidy claims, leading to queues in petrol filling stations in some major cities.
A statement by the Nigerian National Petroleum Corporation (NNPC) announcing the approval on Wednesday said the payment would be ‘immediate’.
NNPC noted in the statement from its Group General Manager, Public Affairs Division, Ohi Alegbe, that the corporation had also stepped up measures to eliminate the noticeable fuel queues in some petrol stations across some major cities in the country with the supply of additional volumes of petrol.

FIXED INCOME: The rally continued yesterday as liquidity remained stout. Bills were well bid across the entire curve and seems like Street is super long Bond and T-bills
Flow wise, PFA interest still evident in the 20 year paper (in decent size). Refund for unsuccessful bids at the FX auction should bump liquidity back closer to NGN 1 trillion early next week. Average yield on bills now 4.36% (-85bps) and bonds 11.77% (-20bps)

FX: The CBN quoted the special auction rate at 197.00 yesterday. Gross FX reserves on a 30 day moving average now at $30.292bn (1st Nov 2015) from $30.192 as at 30 Oct 2015.

COMMODITIES: Oil halted its slide near $45 a barrel after the biggest two-day decline in three weeks amid rising U.S. stockpiles.
Futures gained as much as 0.8% in New York, trimming a weekly drop. Inventories expanded for a sixth week to keep supplies more than 100 million barrels above the five-year seasonal average, government data showed Wednesday. Saudi Arabia increased pricing for December sales of all its crude grades to Asia, where refiners are earning bigger profits. Crude has slumped more than 40% the past year amid speculation a global glut will persist as the OPEC continues to pump above its collective quota.

CHINA: China’s stocks extended a bull-market rally, led by brokerages and technology companies, as ordinary investors returned to the market and speculation grew the government will take more measures to keep economic growth on track.
The Shanghai Composite Index rose 1.9% to 3,590.03 at the close, taking this week’s gain to 6.1%. Turnover surged as the gauge completed a 20% rebound from the August low on Thursday, with trading volumes jumping to the highest level since July. Citic Securities Co., the nation’s biggest listed brokerage, climbed 29% this week. The Hang Seng China Enterprises Index slid 0.4% at 3:22 p.m. as investors awaited a U.S. payrolls report for clues on when the U.S. will raise interest rates.

U.S The dollar traded within sight of its highest level in a decade versus major peers ahead of U.S. employment reports that may help determine if the Federal Reserve will raise rates this year. Mainland Chinese extended gains after the Shanghai Composite Index entered a bull market Thursday.
The Bloomberg Dollar Spot Index was steady, with the greenback having gained against 12 of 16 major peers over the past five days. Kazakhstan’s Tenge plunged to a fresh record. Gold was higher after seven straight daily declines. U.S. crude was headed for a weekly retreat amid ongoing supply concerns. The Shanghai Composite rose a third day after closing at its highest since Aug. 20, while European and U.S. equity-index futures were little changed.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   9.40%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     30.292

Money Market Highlights
O/N                                 01.0567
30 Days                          13.2962                                                                                       90 Days                          15.5723
180 Days                        17.0604

USD 1 Month                  0.1932
USD 2 Months                0.2547
USD 3 Months                0.3366
USD 6 Months                0.5606                                                                                       USD 12 Months              0.8862

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           04-Feb-16          03.12
182d         05-Apr-16         05.49
364d         20-Oct-16         07.03
2yr            31-Aug-17         10.56
3yr            30-May-18        11.06
5yr            13-Feb-20         11.78

Indicative Currency Exchange Rates
                         Bid           Offer
USDNG         197.50         199.50
EURUSD       1.0769        1.0971
GBPUSD       1.5089         1.5287
USDJPY        121.86          121.90
USDCHF       0.99155      0.0014
GBPEUR       1.3871          1.4073
USDZAR      13.8337        14.0371
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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