A Review of the Nigerian Energy Industry

Financial market products & services update

*Financial markets.

03 January 2018, Sweetcrude, Houston, Texas — The local and international financial market products and services update.
NIGERIA: The Securities and Exchange Commission (SEC), yesterday, vowed to transfer to the Capital Market Development Fund, CMDF, all shares not consolidated into one account by investors who subscribed for them using multiple identities.

Abdul Zubair, SEC’s Acting Director-General, disclosed this in Abuja, at a press briefing on the on-going Capital Market initiatives by the Commission.

He said the new date was picked with a view to encouraging many more investors to consolidate their multiple subscriptions into one account.

FX: I&E window so far the week/year kicked off with the pair being offered. Sellers at 361-362 range and buyers showing 359-360 on the day. Still too early to determine the tone for the week.

FIXED INCOME: Yields on bonds gradually trended lower with the exception of the Ju, 21s.

Generally there was some reluctance to sell as street waits for ‘new year’ cues. Bill market was equally quiet; low traded volumes in both bills and bonds reflective of the time of the year. T- BILL Auction today.

E.U.: Germany’s unemployment rate fell to a record low as the number of people out of work slid for a sixth month, reflecting a boom in Europe’s largest economy that could push up wages and inflation.

The jobless rate was 5.5% in December, and the previous month’s rate was revised down to the same level, the Federal Labor Agency in Nuremberg said on Wednesday. The number of unemployed plunged by 29,000 last month, more than twice as much as the median estimate in a Bloomberg survey of economists.

Germany has been enjoying a strong economic run supported by domestic spending and solid global trade, with Purchasing Managers’ Indexes on Tuesday showing factory activity for the country and the euro area jumping to records in December. At the same time, business optimism has slipped from an all-time high as corporate executives fret over production constraints such as finding skilled workers that may start to lift their costs.

CHINA: China’s central bank will make modest increases in money-market rates in 2018 as it aims to keep up the pressure on deleveraging and prevent too much divergence with U.S. policy, according to a Bloomberg survey.

The People’s Bank of China is seen raising interest rates on reverse-repurchase agreements by five basis points three times this year, starting in the first quarter, the survey shows. That would raise the rate – now at 2.5%- more slowly than last year, when policy makers lifted it by five basis points in December after two 10 basis-point hikes in the first quarter.

COMMODITIES: Oil traded near the highest close in more than two years before U.S. government data forecast to show stockpiles extended declines for a seventh week and as unrest continued in OPEC’s third-biggest producer.

Futures were little changed in New York near $60 a barrel after easing 5 cents on Tuesday. Inventories probably fell by 5 million barrels last week, according to a survey before an Energy Information Administration report on Thursday. Crude and condensate exports from Iran remain unaffected by the turmoil that has spread across the country, Bloomberg tanker tracking shows.

Macro Economic Indicators
Inflation rate (Y-o-Y) for November 2017         15.91%
Monetary Policy Rate current                             14.00%
FX Reserves (Bn $) as at December 28, 2017,   38.730

Money Market Highlights

O/N                           5.5417
30 Day                    14.2422
90 Day                    16.0200
180 Day                  17.2183
USD 1 Month         1.56375
USD 2 Months       1.61674
USD 3 Months       1.68577
USD 6 Months       1.83363
USD 12 Months     1.72400

Benchmark Yields
Tenor       Maturity        Yield (%)

93d           05-Apr-18       13.89
182d         05-Jul-18        15.22
364d         29-Nov-18      17.56
2y             15-Nov-19      14.21
3y             15-Nov-20      14.08
5y             27-Jan-22       14.03

Indicative Currency Exchange Rates
Bid         Offer

USDNGN (I&E)       358.00       359.00
EURUSD                  1.1974       1.2176
GBPUSD                  1.3448       1.3650
USDJPY                   112.16       112.19
GBPEUR                  1.1118       1.1323
USDZAR                 12.2115     12.4149
EURNGN                 433.51       434.90
GBPNGN                 486.42       487.82

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