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  • JP Morgan in Nigeria to explore investment opportunities

    JP Morgan in Nigeria to explore investment opportunities

    A high-level delegation from JP Morgan has arrived in Nigeria on a fact-finding mission to assess investment opportunities and economic strategies in the country.

    The visit, which includes major investors with substantial holdings in Nigeria’s Eurobonds and local securities, is part of an exploratory initiative organised by JP Morgan to provide international institutional investors with insights into Nigeria’s economic landscape.

    A statement from the Ministry of Finance said the delegation was received in Abuja on Friday by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun. Leading the JP Morgan team was Dapo Olagunju, Head of West Africa at the global financial services firm. The discussions focused on Nigeria’s economic trajectory, ongoing reforms, and the government’s commitment to attracting foreign investment.

    During the meeting, Mr. Edun highlighted Nigeria’s recent financial achievements, including a successful Eurobond transaction executed without a roadshow—a testament to strong global investor confidence in the country’s economic prospects.

    Read Also: CSO, Afenifere youths fault Sowore’s comments on IGP Egbetokun

    He reiterated that President Bola Tinubu’s administration’s dedication to market-driven reforms and strategic international engagements aimed at boosting foreign direct investment.

    The Minister also pointed out key developments in Nigeria’s energy sector, revealing that the government has signed new agreements with the International Finance Corporation (IFC) to expand electricity access to 400,000 Nigerians as part of broader efforts to improve infrastructure and economic productivity.

    Addressing inflation concerns, Edun assured the investors that the Central Bank of Nigeria (CBN) is implementing orthodox monetary policies while the government continues to enhance agricultural production and stabilise food prices.

    The Ministry in the statement noted that the “meeting signals Nigeria’s commitment to fostering a more attractive investment climate, leveraging its growing economy, strategic location, and business-friendly policies to position itself as a premier investment destination in Africa.”

  • JP Morgan delegation arrives Nigeria to explore investment opportunities

    JP Morgan delegation arrives Nigeria to explore investment opportunities

    A high-level delegation from JP Morgan has arrived in Nigeria on a fact-finding mission to assess investment opportunities and economic strategies in the country. 

    The visit, which includes major investors with substantial holdings in Nigeria’s Eurobonds and local securities, is part of an exploratory initiative organised by JP Morgan to provide international institutional investors with insights into Nigeria’s economic landscape.

    A statement from the Ministry of Finance said the delegation was received in Abuja on Friday by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun. Leading the JP Morgan team was Dapo Olagunju, Head of West Africa at the global financial services firm. The discussions focused on Nigeria’s economic trajectory, ongoing reforms, and the government’s commitment to attracting foreign investment.

    During the meeting, Mr. Edun highlighted Nigeria’s recent financial achievements, including a successful Eurobond transaction executed without a roadshow—a testament to strong global investor confidence in the country’s economic prospects. 

    He reiterated President Bola Tinubu’s administration’s dedication to market-driven reforms and strategic international engagements aimed at boosting foreign direct investment.

    Read Also: Nigeria’s reserve is $3.7b, not $33.8b, says JP Morgan

    The Minister also pointed out key developments in Nigeria’s energy sector, revealing that the government has signed new agreements with the International Finance Corporation (IFC) to expand electricity access to 400,000 Nigerians as part of broader efforts to improve infrastructure and economic productivity. 

    Addressing inflation concerns, Edun assured the investors that the Central Bank of Nigeria (CBN) is implementing orthodox monetary policies while the government continues to enhance agricultural production and stabilise food prices.

    The Ministry in the statement noted that the “meeting signals Nigeria’s commitment to fostering a more attractive investment climate, leveraging its growing economy, strategic location, and business-friendly policies to position itself as a premier investment destination in Africa.” 

    JP Morgan’s engagement with Nigerian policymakers and investors reflects the increasing interest of global financial institutions in the nation’s economic reforms and potential for long-term growth, the ministry added.

  • Nigeria’s reserve is $3.7b, not $33.8b, says JP Morgan

    Nigeria’s reserve is $3.7b, not $33.8b, says JP Morgan

    Global financial service firm JP Morgan has estimated Nigeria’s net foreign reserve to be around $3.7 billion.

    The figure is far below the $33.8 billion as of August 17 on Central Bank of Nigeria (CBN) website.

    JP Morgan’s estimate is much lower than the net figure of $14 billion reported at the end of 2021.

    The bank disclosed this in its latest report on Nigeria titled “Nigeria: Reform pause rather than fatigue”. 

    It noted that the lower-than-reported forex reserve is the result of larger currency swaps and borrowings against the forex reserve.

    The global financial institution said: “Based on partial information from the audited financial accounts, we estimate that CBN’s net forex reserves were around $3.7 billion at the end of last year, from $14 billion at the end-2021.”

    According to the bank, the assumptions followed an addition of $5 billion in International Monetary Fund Special Drawing Rights (SDR) to external reserves to arrive at total gross forex reserves of US$37.8 billion.

    Read Also: Report: CBN owes JP Morgan, Goldman Sachs $15b cash receipts

    This, it said, was broadly in line with the 30-day moving average of US$37.08 billion previously published on the central bank’s website.

    It added that by adjusting the gross external reserves with three key forex liability lines that include forex forwards ($6.84 billion), securities lending ($5.5 billion) and currency swaps ($21.3 billion).

    It estimated currency swaps by backing out forex forwards and outstanding Over The Counter (OTC) Futures balances from an overall aggregate published in the financial accounts.

    The bank said the CBN still can withstand the pressure accompanying the low forex reserve especially, as profit from swap arrangements between the CBN and commercial banks, the rates will continue to rise.

  • JP Morgan cuts oil price outlook

    JP Morgan yesterday revised its outlook on Brent crude to $73 per barrel on average. The bank’s earlier forecast was for an average Brent crude price of $83.50 a barrel. It said increase in supply in North America that will occur in the second half of 2019 and will eventually pressure prices even lower in 2020, to an average $64.

    Meanwhile, oil prices wobbled but clawed back losses from earlier in the session on jitters over U.S. supply data.

    Global benchmark January Brent LCOF9, -0.96 per cent turned higher from a loss of over one per cent earlier, gaining 14 cents, or 0.2per cent, to $63.59 a barrel, after closing up 1.5 per cent on the previous day. Its finish at $62.53 Tuesday was the lowest settlement since February.

    The Nigerian government pegged crude oil benchmark at $60 per barrel and approved N8.73 trillion for the 2019 budget. Oil production was also pegged at 2.3 million barrels per day (bpd).

    This was contained in the 2019/2020 Medium Term Expenditure Framework (MTEF) Fiscal Strategy Paper (FSP) approved by the Federal Executive Council (FEC).

    The head of the bank’s Asia-Pacific oil and gas operations, Scott Darling, said analysts had factored in the increase in supply in North America.

    With everything that has been happening to oil in the last few days, with prices getting pummeled by mass short covering and pessimistic economic forecasts for global growth, chances are investment bank will soon begin revising their forecasts unless they are certain the Organisation of Petroleum Exporting Countries (OPEC) will agree a production cut at its Vienna meeting next month.

     

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    This cut is by no means certain although bulls are pinning their hopes on it in the absence of any other significant positive factor working for oil right now. On the contrary, even the latest production numbers from OPEC’s number-one, Saudi Arabia, were bearish for prices: Bloomberg’s Javier Blas yesterday reported, citing industry insiders that the Kingdom’s oil production since the beginning of this month jumped to new highs, reaching 10.8-10.9 million bpd. Supply, including production and inventory drawdowns reached 11 million bpd on some days.

    JP Morgan’s Darling said if OPEC is to balance the market and prop up prices, it would need to reduce its combined production by as much as 1.2 million bpd. The cartel itself is discussing cuts of between 1 million bpd and 1.4 million bpd. Russia has yet to weigh in but a Reuters report citing two senior Russian government officials said the country would rather not join an OPEC-led cut this time, even as President Putin said at an industry event that Russia will cooperate with OPEC on oil prices.

  • SEC assures foreign investors of dynamic and transparent market

    The Securities and Exchange Commission ( SEC ) Nigeria, has assured foreign investors of the safety of their investments in the Nigerian capital Market.

    Disclosing this when representatives of JP Morgan and Stanbic IBTC visited the Commission in Abuja weekend, Ag. Director General of SEC, Ms. Mary Uduk said all necessary controls are in place to ensure that the market is dynamic, free, fair and transparent for participants.

    Uduk said the Commission has embarked on several initiatives in a bid to ensure that investors in the market derive the benefits therein.

    She said the implementation of the Capital Market Master Plan has led to significant changes in the market. Some of these implemented initiatives are dematerialization of share certificates, recapitalization of capital market operators, establishment of the National Investors Protection Fund and inauguration of its board, as well as launch of the Corporate Governance Scorecard.

    Others are implementation of the e-Dividend Mandate Management System, establishment of Complaint Management Framework, transaction cost reduction, implementation of the direct cash settlement and the introduction of non-interest capital market products.

    The Ag. DG disclosed that the Commission has put in place a robust investor protection machinery with severe sanctions on infractions of securities laws.

    “The implementation of this regime has led to the closure of various Ponzi schemes as well as the recovery of millions of naira belonging to innocent investors.

    “SEC champions zero tolerance on infractions and we have a range of sanctions depending on the level of infraction and how egregious the breach is, ranging from warnings, fines, suspensions, withdrawal of registrations and jail terms.

    “The idea is to improve transparency in the market and ensure that investors are safe”.

    On surveillance, Uduk said the Commission has surveillance mechanisms in place to detect possible suspicious trading/market manipulation activities.

    In his remarks, Nick Long, Representative of JP Morgan, expressed satisfaction with the performance of the Nigerian capital market adding that it is one of the reasons why it continues to attract international investors.

  • JP Morgan: Oil prices won’t go higher than $70

    Oil prices at $70 may be the top of the range in the price of oil that would be seen over the next few years, chief global strategist at JPMorgan Asset Management, David Kelly told Bloomberg Daybreak: Americas yesterday.

    “Yes, we’ve got those geopolitical issues, but I don’t know if sanctions would be that effective, it has to be a global effect,” Kelly said.

    Based on the cuts in production and on growth in the U.S. shale industry, oil at $70 a barrel may be “as high as it gets”, according to the strategist.

    “That’s a price that I don’t think is hurting U.S. consumers too much,” Kelly said, adding that $70 oil is a price that’s actually helping the stock market and U.S. energy companies.

    At the beginning of this year, J.P. Morgan lifted its Brent oil price forecast to $70 a barrel for 2018. The global economy will continue to expand, which will stimulate growth in oil demand and healthy prices, J.P. Morgan said in January, expecting that 2018 would be a year of two halves for the oil market and oil prices. The first half of the year will be so strong that Brent could hit $78 a barrel in the first or the second quarter. Yet, in the second half of the year, drillers will increase their production in response to the higher prices, and this higher production may weigh on oil benchmarks, according to J.P. Morgan.

  • JP Morgan: brent crude to hit $78

    Price of Brent crude will hit $78 per barrel in the next few months, on account of the dynamics in the global oil market, a global investment banking institution, JP Morgan report has said.

    It said the price is expected to hit $78 per barrel within months, as new productions and supplies kicks off among the members of the Organisation of Petroleum Exporting Countries (OPEC) and non- OPEC members.

    It said the price may fall to $64 and later rise to $67 per barrel, before rising to $78 in the second half of the year.

    The report’s projection aligns with that of Bank of America (BoA) and other banks, in respect to the growing prices of crude over the next half of this year.

    It said the projection by the crude price projection of $64 by the  BoA would increase later in the year.

    “The global economy will continue to expand, relative to the growth in the demand and supply prices of crude. The dynamics will also drive the WTI prices higher with the average for the year seen at $65.63 a barrel,” according to J.P. Morgan’s oil analysts.

    The report said despite the upbeat, the investment bank’s analysts recognised the danger of growing U.S. and other non-OPEC production.

    So, while their price forecasts are for the average level of Brent and WTI this year, the bank’s senior oil analyst Abhishek Deshpande noted in an interview with CNBC that “2018 is going to be a year of two halves.

  • What JP Morgan’s likely return to Nigeria means for economy, by ABCON

    Bureaux De Change (BDC) operators are excited that the Federal Government plans to open talks with JPMorgan Chase & Co. for its reinstatement in the local-currency emerging-market bond index. They believe JP Morgan’s return will bring great benefits to the economy.

    Naira securities were removed from the JP Morgan Index in 2015 because of foreign-currency shortages which led to volatility in the market. JP Morgan is the largest bank in the United States, the world’s sixth largest bank by total assets, with total assets of $2.5 trillion, and $28 trillion in assets under custody and administration.

    Association of Bureaux De Change Operators of Nigeria (ABCON) President Aminu Gwadabe said yesterday that the return of the global finance giant will improve foreign exchange (forex) inflows and boost the Central Bank of Nigeria’s (CBN’s) chances of achieving its $60 billion foreign reserves target by 2018 in spite of any fall in oil prices.

    He praised the Federal Government’s plans to begin talks with JP Morgan about being included in its government bond index for emerging markets.

    To the ABCON boss, such return will also enable Nigeria benefit from the $20 billion overseas investment planned by the US bank which will see it raise wages, hire more hands, and open new branches in emerging market countries.

    Gwadabe said: “I want to use this opportunity to congratulate the CBN and the Federal Government on the good news of JP Morgan renewed interest in Nigerian bond market which will enhance investors’ confidence on our economy. The CBN has brought stability in the forex market by making dollar available to genuine forex users, especially at the retail-end of the market. That has ended volatility in the market and boosted the confidence of foreign investors in the local economy.”

    He also praised the CBN for introducing the Investors’ and Exporters’ (I&E) Forex Window, which has since April 2017 attracted over $27.8 billion in turnover into the economy and brought about transparency as well as stability in the forex market.

    The ABCON boss said the US Bank’s return to Nigeria will enable the government access funds for infrastructural development. He urged the CBN to explore the opportunity in reducing the multiple exchange rates and create more confidence for foreign investors. “It will create more opportunity for a genuine and transparent competition among forex operators and boost employment opportunities in the country as well as deepen the forex, naira and the equities markets,” Gwadabe said.

    The Federal Government is presently selling more foreign debts to reduce the financing burden from paying double-digit yields on local-currency bonds. That would help free up funds to increase investment in infrastructure and spur economic growth.  ”We would like to get back into the JP Morgan  Index,” Director-General of Debt Management Office (DMO) Ms. Patience Oniha said.

    Daily trading volumes for the naira have risen to about $200 million from as little as $20 million three years ago, according to Standard Chartered Plc. That bodes well for discussions on returning to the index, according to Oniha. “The securities trading was never the problem; it was always the foreign-currency liquidity, which has now improved”, she said.

    Also, Finance Minister Kemi Adeosun said the government is focusing on improving its economy, and indexes will “naturally” return to Nigeria when they see adjustments in line with their requirements.

    “JPMorgan have their own framework of how they evaluate an economy, and when they are ready, when conditions are good, they will list Nigeria again,” Mrs. Adeosun said.

    ”We should just move in our own direction. What we need to do is to re-position this economy,” she said, adding: “JPMorgan or any other index will come naturally. My focus really is on the recovery of the economy. They will come when the macro fundamentals are right. They left because the macro fundamentals were not right.”

    JP Morgan Chase & Co plans to expand its African presence into some countries, including Ghana and Kenya, Chief Executive Jamie Dimon said.  ”You will see us open in some countries we are not in, in Africa you will be hearing about some of that stuff,” Dimon said at the 2017 World Economic Forum meeting in Davos, Switzerland.

  • Malabu deal: Nigeria sues JP Morgan for $875m

    Malabu deal: Nigeria sues JP Morgan for $875m

    Nigeria has filed a claim against JP Morgan Chase for more than $875 million, accusing it of negligence in transferring funds from a disputed 2011 oilfield deal to a company controlled by a former oil minister.

    A spokeswoman for JP Morgan dismissed the accusation yesterday, saying the firm “considers the allegations made in the claim to be unsubstantiated and without merit”.

    The suit filed in British courts relates to a purchase of the offshore OPL 245 oilfield in Nigeria by oil majors Royal Dutch Shell and Eni in 2011.

    At the core of the case is a $1.3 billion payment from Shell and Eni to secure the block that the lawsuit says was deposited into a Nigerian government escrow account managed by JP Morgan.

    The lawsuit said JP Morgan then received a request from finance ministry workers to transfer more than $800 million of the funds to accounts controlled by the previous operator of the block, Malabu Oil and Gas, itself controlled by former oil minister Dan Etete.

    The lawsuit said that JP Morgan then transferred the funds to two accounts controlled by Etete, without sufficient due diligence to make sure the money did not leave accounts controlled by the Nigerian government.

    Reuters was unable to reach either Etete or Malabu for comment.

    The filing seen by Reuters was made in London in November on behalf of the Federal Republic of Nigeria, and says that JP Morgan acted with gross negligence by allowing the transfer of the money without further checks.

    It said JP Morgan should have known that, under Nigerian law, the money should never have been transferred to an outside company.

    “If the defendant acted with reasonable care and skill and/or conducted reasonable due diligence it would or should have known or at least suspected … that it was being asked to transfer funds to third parties who were seeking to misappropriate the funds from the claimant and/or that there was a significant risk that this was the case,” the filing said.

    Late last year, a Milan judge ruled that Shell and Eni must stand trial in Italy, where Eni is headquartered, for a separate legal case in which Milan prosecutors allege bribes were paid to Etete and others as part of the same oilfield deal, including sums that went to Etete’s Malabu. [nL8N1OK25L]

    Both Eni and Shell have repeatedly denied any wrongdoing in relation to that case. Malabu has never commented on the case and Reuters has not been able to contact it. [nL8N1HI1NA].

  • Blues from JP Morgan

    • Is it trying to stampede the Buhari government?

    Last week, JP Morgan, the United States lender, announced plans to eject Nigeria from its Government Bond Index for Emerging Markets by the end of the year. The reason it gave was that Nigeria needed to restore liquidity to currency markets in a way that allows foreign investors tracking the benchmark to transact with minimal hurdles. It claimed to have given Nigeria till this month to increase liquidity in its currency markets or face ejection from the bond index. This time, however, it claims it is extending the deadline by another six months ostensibly to enable the new administration of President Muhammadu Buhari to have a firm handle on things.

    For an economy that was until recently the toast of international rating agencies, this latest development would merely add to the string of woes which attenuated the dip in global oil prices. The auguries, would ordinarily seem far from good: aside forcing the investors tracking it to sell Nigerian bonds from their portfolios potentially resulting in significant capital outflows, the development, it is feared, would raise borrowing costs for the country already suffering from a sharp drop in revenue.

    By the way, JPMorgan only added Nigeria to the widely followed index in 2012, the second African country after South Africa to be included. It added Nigeria’s 2014, 2019, 2022 and 2024 bonds.

    Should the development stoke panic in the local economy? We clearly do not think so. At best, it is merely a wake-up call. Yes, Nigeria, an emerging economy at this time and a fringe player in the global financial markets –stands to gain from retaining the bank’s listing as against being out.

    With due respect to JP Morgan however, the need to restore liquidity to the currency market, being canvassed as basis for ejecting the country from the bond typically betrays an obsession by international agencies with symptoms rather than the underlying disease. But even more asinine is what appears to be a move to stampede the new Buhari administration and the financial authorities into precipitate actions.

    Why extend the deadline by six months if we may ask? Why not 12 or even 24 months if the idea is to give the administration a breather? More than JP Morgan would perhaps care to appreciate, Nigerians understand the source of the current crisis. They recognise that the issue at hand requires more than the tinkering with the currency markets, which is akin to seeking treatment for ringworm while leaving a more malignant leprosy unattended to.

    Again, we dare to ask: what was the main catalyst in 2012 when the bank added Nigeria to the index, which is missing now? Except for the single factor of oil prices which held high and steady then, we cannot find any difference. So, what happens in the unlikely event of oil prices rebound? Would the bank then change its mind? Such scenarios ought to compel a more fundamental, if not entirely rigorous rethink of its approach to the whole issue.

    The truth, however, is that Nigerians did not elect their leaders only to have them pander to international agencies, no matter how well meaning. They elected them to get the job done. Today, the main challenge is how to diversify the economy in quick time; how to ensure a quick turn-around in the infrastructure situation, and to create jobs for the army of the unemployed. The government should bear in mind that it is their performance on those indices that ultimately counts; not what these international agencies think.