A Review of the Nigerian Energy Industry

Financial market products & services update

*Financial markets.

07 May 2018, Sweetcrude, Houston, Texas — The local and international financial market products and services update.
NIGERIA: Domestic investors have continued to dominate trading on the equities market for three months in a row, as they traded N497.15 billion worth of shares for the first quarter, Q1, ended March 31, 2018. This represents 56.56% of N878.97 billion total portfolio transactions on the Nigerian Stock Exchange, NSE during the three month period, thereby outpacing their foreign counterpart. Data on domestic and foreign portfolio participation in equities trading for the period showed that foreign portfolio investors, committed N381.82 billion, representing 43.44% of the total portfolio transactions.

FX: USDNGN closed last week well bid on the back of pending FX demand mostly driven by FPIs taking profit in the fixed income space. The daily average turnover so far stands at $260.69m with LHS flows (inflows) supported by primary auctions (OMO and T-bill) and we believe that the CBN intervened at the window as well. The pair traded a 6 week high of $/N 363.50, depreciating by N2 from the previous week. The fixing in the I&E window also closed the week at the highest level in 5 months.

FIXED INCOME: With no OMO announcement on Friday, the buying continued in bills although less aggressive.

It eventually closed skewed to the sellers as lower money market liquidity (N200bn vs N500bn 1mth average) prompted some players to be cautious.

Bond market remained well offered with more profit taking led by offshore accounts. This week, FX refunds and OMO maturity expected to take liquidity back above N500bn and could cause buyers to re-emerge in bills.

CHINA: China’s $42 trillion financial sector is set to open up to the world like never before.

To deliver on longstanding pledges and help stave off the threat of tariffs from U.S. President Donald Trump, Chinese officials have set a June 30 deadline to ease ownership and business restrictions for banks, securities firms, asset managers and life insurers.

Securities firms like Goldman Sachs Group Inc. and UBS Group AG have an opportunity to boost their share fivefold as they take more direct control of joint ventures, projections by Bloomberg Intelligence show

U.K: Theresa May declared her “absolute determination” to make a success of leaving the European Union as she came under new pressure from Conservatives on both sides of the Brexit debate.

Writing in the Sun newspaper on Sunday, the British prime minister pledged to leave the single market and the customs union and build “a new relationship with EU partners that takes back control of our borders, our laws and our money.”

COMMODITIES: U.S. oil rose above $70 a barrel for the first time since November 2014 as traders braced for a re-imposition of U.S. sanctions on Middle East crude producer Iran.

Futures in New York and London jumped as much as 1.4%. While President Donald Trump has threatened he’ll pull out of a deal between Iran and world powers as a May 12 deadline nears, he’s signaled he’ll be open to negotiation. The 2015 accord eased sanctions on OPEC’s third-largest member in exchange for curbs on its nuclear program, and renewed American measures may stifle the Middle East nation’s crude exports.

Macro Economic Indicators
Inflation rate (Y-o-Y) for March 2017 13.34%
Monetary Policy Rate current 14.00%
FX Reserves (Moving Avg Bn $) as at May 03, 2018 47,576

Money Market Highlights

O/N 3.0000
30 Day 11.2696
90 Day 12.9418
180 Day 14.1295
USD 1 Month 1.92770
USD 2 Months 2.08257
USD 3 Months 2.36906
USD 6 Months 2.52019
USD 12 Months 1.72400

Benchmark Yields Tenor
Maturity Yield (%)

91d 02-Aug-18 11.63
182d 01-Nov-18 11.94
364d 04-Apr-19 12.85
2y 13-Feb-20 12.48
3y 15-Jul-21 12.41
5y 27-Jan-22 13.25

Indicative Currency Exchange Rates
Bid Offer

USDNGN (I&E) 359.00 360.00
EURUSD 1.1830 1.2102
GBPUSD 1.3433 1.3656
USDJPY 109.29 109.35
GBPEUR 1.1240 1.1448
USDZAR 12.4205 12.7145
EURNGN 428.70 445.60
GBPNGN 486.55 490.50

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