The Nation Newspaper

Tag: markets

  • Banks channel forex to investors exiting equities, bond markets

    Banks channel forex to investors exiting equities, bond markets

    Foreign investors repatriating profits and others exiting the Nigeria equities and bond markets last week triggered a rise in foreign exchange (forex) disbursement by leading banks.

    Many of the investors, after liquidating their investments, secured forex to repatriate their funds through Stanbic IBTC Bank. The lender disbursed $19,305,571.50 to 68 customers,   according to published disbursement data for last week.

    JPM London secured $3,331,564.24 from Stanbic IBTC for its divestment of equities and Federal Government of Nigeria (FGN) Bonds. There was also $2,010,690.01 disbursed to State Street/Stanbic Nominees-E by the lender for the same purpose.

    BP2S/BNP Pribas obtained $130,167.61; Standard Bank of South Africa, $541,671.31; Merrill Lynch International $63, 767.89; HSBC Funds Services London, $394,210.30; and The Bank of New York Mellon 2, $206,317.82.

    The foreign investors have been pressurising the Central Bank of Nigeria (CBN) to devalue the naira, which it has vehemently resisted. Last week’s repatriation of investments is expected to continue in the months ahead as the margin between the official exchange rates has continued to widen.

    The naira/dollar exchange rate remained unchanged at N197 to dollar at the CBN and N199.50/US$1 at the interbank market. At the Bureau-De-Change, the naira appreciated against the dollar marginally on all trading days of last week, with the Naira/Dollar rate trending lower from N322.00/$1 on Tuesday (appreciating N1 from Thursday) to close at N320/$1.00 on Friday. The parallel market was also stable as Naira/Dollar traded for N323/$1 on all trading days save for Wednesday when it rose marginally to N324.00/$1.

    Stanbic IBTC also disbursed $6 million in three tranches to Rain Oil for the importation of petroleum products and $1,082,440.37 to GZ Industries Limited for aluminum coils import and $100,000 in Personal Travel Allowances (PTAs) to 25 customers.

    Diamond Bank led other lenders with $20,084,368 disbursed to 222 customers, mainly for school fees payment, PTAs and importation of petroleum products.

    Zenith Bank Plc disbursed $13, 107,525.71 to 362 customers. The lender disbursed $3,646,399.15 to Tiger Branded Consumer for Canadian Milling Wheat. Virgin Atlantic got $1 million for air ticket sales remittance.

    Oando Marketing secured $360,000 in two tranches for importation of petroleum products. The bank also made disbursements to Seven-Up Bottling Company Plc; Sonia Foods Industries Limited; Emerging Markets Telecom Services; Boulous Enterprises Limited; Honeywell Flour Mills Plc. There were several Personal Travel Allowances (PTAs), among others.

    United Bank for Africa (UBA) Plc also disbursed forex to 242 customers. Some of the big beneficiaries are: Total and Eterna Oil which accessed $1,201,649.61 and $1, 449,358.03 restively. The lender also funded $1 million remittance tickets for IATA and several other transactions for school fees payment.

    FirstBank disbursed $6 million in two tranches to Gulf Treasures Limited for the importation of petroleum products. There was also $1.943,612.48 disbursed to Elephant Group Limited for NPK -15-15-15 bulk importation. The bank also disbursed to customers for the payment of school fees and PTAs.

    Other lenders that got forex are Diamond Bank, GTBank, First City Monument Bank, Wema Bank.

    The funds were sourced from the Central Bank of Nigeria (CBN) and sold to the beneficiary customers at the official rate of N197.50 to dollar. The beneficiaries used the funds for the importation of goods, services and other items that fall within the CBN-stipulated import approval list.

    CBN Governor Godwin Emefiele has consistently assured stakeholders that the country will continue to meet financial obligations to foreign investors and her international trading partners.

    The weekly publications on forex utilisation are meant to promote transparency and accountability on the side of the lenders, which act as a link between the regulator and the forex users.

  • ‘2016’ll be tough for oil markets’

    Vitol, the world’s biggest independent oil trader, expects the year to be challenging for oil markets as stocks of crude and products continue to weigh on the market, prompting it to manage the business conservatively in these uncertain time.

    Despite these testing conditions, Vitol saw its total traded volumes of crude and oil products last year amount to 303 million metric tonnes (mt) – or an average of some 5.9 million barrels  per day (bpd) – up 13 per cent from 2014 when it traded 268 million mt.

    According to Platts, an oil and gas agency, the increase in trading was reflected in Vitol chartering 6,629 voyages last year compared to 6,053 the previous year.

    Vitol President/Chief Executive Officer, Ian Taylor, however, said despite the favourable market structure for physical trading, “the absolute price levels and market volatility are causes for caution”.

    “Revenues, which are dictated by absolute prices fell markedly despite an increase in oil and product trading activity,” he added.

    Vitol saw its 2015 revenue slump by 38 per cent to $168 billion compared to $270 billion in 2014. “We expect this coming year to be challenging for the oil sector. Demand growth will be in line with long-term averages, but below the high levels seen in 2015.

    “Stocks of crude and products continue to build and these will weigh upon the market. In this context, we shall focus on adding value to our customers and seek interesting opportunities, whilst remaining mindful of increased risks,” he added.

  • Council to rid markets of rats

    Residents of Somolu Local Government Area of Lagos State have been advised to maintain proper hygiene to guard against the spread of Lassa fever.

    The council’s Executive Secretary Abiodun Orekoya gave the charege during the deratisation of Oyediran and Alarape markets, organised by the Lagos State Local Government Association of Environmental Officers.

    Orekoya hailed the association’s gesture to eradicate rats in the markets.

    He said the council has established a Health Vanguard Gang to clean the environment.

    The group’s president Samuel Akingbehin said rats are susceptible to the spread Lassa fever.

    Akingbehin said all precautionary measures should be embraced to guard against the spread the fever.

    The Iya-Oloja of Somolu Local Government Area, Chief Modupe Olafojude solicited cooperation of the members for the success of the exercise.

  • Why we closed Yobe markets – Army

    Why we closed Yobe markets – Army

    The Army in Damaturu, Yobe State has explained that the decision to close all weekly market activities across the state has led to blocking of logistics supply to Boko Haram terrorists in the bush and the arrest of some of their major logistics suppliers.

    The commander of 27 Task Force Brigade, Col. Dahiru Bako in Yobe State at a press briefing in Damaturu noted that serious progress has been recorded in the on-going operation against the insurgents.

    Col. Bako explained that “the massive onslaught has made the insurgents to be on the run everywhere. That is one area that we require the cooperation of the general public.

    “The insurgents are on the run and are now filtering into the communities. This is a very serious issue and we are appealing to the communities and the general public to without delay report such criminal elements and not harbor them  so that they would be picked up,” Col. Bako explained

    “On the issue of the closure of Sunday Market in Damaturu and other weekly markets across the state, the Commander said; the issue of the closure of the markets is very crucial because, it has helped us in blocking logistics supplies to the terrorists in the bushes. It has also helped us in picking up most of their logistics suppliers.

    “We are appealing to the people to understand that we are not doing this to punish anybody but it is for the safety of everyone. But I must add that the military has only stopped the operations of weekly markets across the state where people normally converge in large numbers,” Col. Bako said.

    In another development, Col. Dahiru Bako also informed that three of the top wanted Boko Haram members have been arrested by men of the 27 Task Brigade in Yobe State.

    Though he did not state details of their arrest apart from locations, he however informed that one of the wanted kingpins was picked while he was pretending to be working as a tailor at Don Etiebet Housing Estate in Damaturu while the other one was picked in Jakusko in Jakusko Local Government of Yobe State. He added that the third wanted Boko Haram terrorist was arrested at a checkpoint on his entry into Damaturu from Maiduguri.

    He commended the local hunters and vigilante, describing them as crucial partners to the success of the operation.

    He also represented the poster of the 100 wanted Boko Haram terrorists to the public.

  • Europe’s insurance markets show recovery signs

    Europe’s largest insurance markets have continued to show some signs of recovery, with many experiencing top-line growth, a new report by A.M. Best has shown.

    According to the report, the increases in total gross written premium (GWP) come in general following a number of years of muted development and even decline, and there is a sense of optimism that this momentum will continue.

    A.M. Best’s in-depth analysis of the key European markets shows Italy has experienced a second consecutive year of double-digit growth with a 20.7 per cent jump in total GWP in 2014. France posted a 6.1 per cent increase, while Germany recorded a more modest 2.7 per cent rise. Spain’s total premium volume fell by 0.4 per cent in 2014, although this was its smallest decline in three years and despite its continued contraction, the country’s insurance market remains very resilient and profitable.

    In the same vein, French insurance market confirms recovery, yet challenges remain.

    The market grew strongly in 2014, experiencing a 6.1 per cent rise in gross written premium (GWP) to EUR 200.0 billion according to data from the Fédération Française des Sociétés d’Assurances (FFSA), thereby accelerating the recovery observed in 2013.

    The growth recorded in 2014 was driven by the dynamism of the life and savings segment, with GWP increasing by 8.4 per cent to EUR 128.8 billion, a sign of the solid recovery from the challenging years that followed the global economic crisis. In comparison, the health sector recorded a more modest growth of 3.2 per cent to EUR 20.1 billion, whilst the non-life segment remained relatively stable, recording GWP of EUR 51.1 billion, up two per cent compared with EUR 50.1 billion in 2013.

    Whilst premium revenue continued to grow in 2015, the French insurance industry has not appeared as buoyant as in 2014, with GWP rising by four per cent in the first five months of the year compared to the same period in 2014.

    This was again chiefly driven by the life and savings segment reporting a more normalised growth of five per cent over the period, whilst the health and non-life segments confirmed the trends observed in 2014.

    A.M. Best considers the French insurance sector to remain solid, although it continues to face a challenging operating environment. The French market is indeed mature and remains highly competitive, with a total insurance penetration rate of 9.3 per cent compared to 6.6 per cent for Germany and 5.3 per cent for Spain.

    Furthermore, the low interest rate environment continues to pressure insurers’ operating earnings and bonus rates credited to life products. Economic growth in France has been sluggish and remained below 0.4 per cent from 2012 to 2014 due to tighter fiscal policies and high unemployment of about 10 per cent.

    However, the Organisation for Economic Co-operation and Development (OECD) expects growth to gain momentum in 2015 and 2016 as lower commodity prices and a weaker Euro should strengthen the demand for French goods and services.

     

     

     

  • China fears and global growth doubts grip markets

    Markets will be watching for China’s next move as signs of a slowdown in the world’s second-largest economy stack up, raising expectations it will act to stoke growth.

    A looming snap election in Greece and a closely watched conference hosted by the Federal Reserve in the United States are also likely to keep investors on their toes this week, in particular as they look for hints on when the U.S. will raise interest rates.

    Fears that Chinese growth is weakening, dragging down the global economy with it, are already hammering commodities and world stock markets.

    Both tumbled last Friday after a survey showed Chinese manufacturing slowed the most since the global financial crisis in 2009 – adding to other worrying clues about the country’s health, including its falling exports.

    China devalued the yuan earlier in August, by pushing its official guidance rate down 2 per cent. The central bank has said there was no reason for the currency to fall further, but investors are also bracing for further interest rate cuts.

    “It will be all eyes on the Chinese authorities for any further policy support steps, alongside the People’s Bank of China yuan fixings and trading swings,” analysts at Investec Economics said in a note to clients.

    China is also widely expected to relax reserve requirements ratios for its banks again in the coming months, a measure intended to spur lending by reducing the cash they need to hold. It is trying to keep its economy on course to grow 7 per cent in 2015 – its slowest pace in a quarter of a century.

    “We continue to expect a total of 100 basis points of reserve requirement ratio cuts by end-2015, with the first cut likely to take place within the next two weeks,” economists at Standard Chartered said.

    The cash reserves ratio has already been cut three times this year.

    By the end of next week attention may shift away to the Rocky Mountains, where policy makers are due to gather from 27-29 of this month for the Fed’s conference of central bankers, finance ministers, academics and financial market participants in Jackson Hole.

    Fed chair Janet Yellen is not expected to attend, raising the prospect that other Fed officials may be more tight-lipped about the likelihood of the first rate increase in almost a decade, some analysts said.

    The prospect of an increase as soon as September receded last week as the Fed released minutes of July meeting. They gave no clear signals as to the timing of such a move – which would affect markets across the world and could cause more pain for emerging market assets, already being hit by China’s woes.

    Fed policy makers are still concerned about the weakness of the global economy, the minutes showed, but they were also more confident about US growth prospects.

    Further clues on both matters should be gleaned from data releases last week, including second-quarter gross domestic product figures for the United States, due last Thursday.

    Quarter-on-quarter GDP growth in the period is expected to be revised upwards to 3.2 per cent from 2.3 per cent, according to a Reuter’s poll.

    In the euro zone, investors will also be looking at a German economic sentiment survey due tomorrow for a better idea of the scope of the bloc’s recovery.

    Preliminary August consumer price readings for Germany and Spain on Friday will provide further insight into how effective the European Central Bank’s bond-buying efforts have been at warding off deflation.

    But the spotlight will mainly fall once again on Greece, where Prime Minister Alexis Tsipras has resigned. That opened the way for early elections after he secured much-needed funds from the country’s third international bailout programme.

    The current Greek government aims to strengthen its position in the election after accepting a rescue deal it once opposed. But that creates more uncertainty for markets already on edge over whether Greece will deliver on promised reforms and get its economy and banks back on track.

  • Food prices drop in Lagos markets

    Food prices drop in Lagos markets

    Between April and July, many housewives adopted various survival strategies to cope with escalating prices of  tomatoes and pepper as well as other staple foods—no thanks to naira devaluation and other factors. However, other food items maintained their old prices while few others are experiencing increment, TONIA ‘DIYAN reports.

    Since the beginning of this month, the prices of tomato and pepper which used to be extremely expensive have started falling, quantity has also increased. The situation was not like this in the last four months when many households faced hard times as prices of food items increased by over 100 per cent due to factors such as insecurity, flood caused by heavy rainfall which washed away large quantities of ripe crops before they could be harvested and the steep fall in the value of the naira.

    While the situation lasted, consumers adopted different methods to cope; many households bought little quantities of fresh ingredients, combined them with dried pepper and packaged tomatoes in cans. Housewives lamented that it wasn’t easy coping that period, especially having to manage the monthly allowance every time. Most of them said they would have to do lots of explanations to convince their husbands to increase food allowance.

    From investigations, the situation was worsened by alleged extortion by policemen at the many checkpoints on the way to Lagos when farmers who harvest and distribute these items return from the north. This is in addition to the activities of state and local government officials that charge and collect all manners of spurious charges when they finally get here.

    According to the famers, the scarcity and hike in the price of staple foods, was due to high cost of transportation occasioned by the fuel scarcity in the country that virtually killed the economy at the beginning of the year and off season period for perishable food items.

    In April, acute nationwide fuel scarcity caused increment in the prices of staple foods. Traders who buy produce in small quantities attributed this to high cost of transporting goods from their places of purchase to the market.

    In June when Ramadan fast began, price-sensitive markets across Lagos suffered from higher food costs which affected the demand for food items, particularly those of tomato and pepper. And visits to some major markets in Lagos where these items were sold in large quantities showed then that prices of tomatoes, pepper, chilli pepper and others moved up sharply without any likelihood of coming down any time soon.

    Today, the price of the produce have become very affordable, a big basket of tomatoes now sells for N20, 000 or less depending on the size and type of the produce.  Medium size is N18, 000. Traders have attributed the price decrease to change in season. According to them, new and fresh tomatoes are out now; there are no pests spoiling tomato like it used to be when the rain was very heavy in the north. Consumers can now get the item for which they previously paid between N300 and N500 for between N50 and N100 respectively. An average bag sells for N6, 000 at Mushin market.

    A pepper seller at Mile 12, Mallam Oseni Usman, who confirmed the fall in prices of ingredients, attributed the development to the season, adding that farmers are no longer afraid to cultivate new crops. Another trader also attributed this drastic development to seasonal changes.

    At Mile 12 market, Mrs. Bimpe Olowu, a tomato seller said: “The price of these tomatoes change based on the season because it is not a stable market. These are perishable goods. The price of tomato will continue to be unstable because it is a seasonal good.”

    The price of melon also known as Egusi has gone down because of its seasonal nature.  A derica of melon seed sells for N300; N1,200 for plastic and N39,000 for a bag. Mr. Amos Osai, a melon seed seller simply said “The price came down because this is the season for it,” he told The Nation Shopping.

    Traders at Ojuwoye market, Mushin attributed the former price increase to the rain. “Whenever it is rainy season, tomato and pepper would be very expensive or relatively out of stock. Before now, a basket was N30, 000 for tomato and N16, 000, N20, 000 for pepper from Mile12 Market, it has reduced to,” the trader said.

    Expressing joy, a seller of the produce, Mrs. Silifat Kunle said, it is a good thing the price of tomato and pepper reduced because her customers had resolved to patronising tin tomato and dried grinded pepper sellers, popularly known as ‘Ata-gungun’, trying to safe cost.

    On the other hand, a palm oil seller, Adam Umar said the price of item he sells has increased with five litres of groundnut oil now selling for N1,200 against the former N1, 000. Palm oil has also increased by 20per cent but like his colleague,he is optimistic that the price would reduce soon.

    In recent times, beans has been the most expensive and consumers have not stopped lamenting due to its unstable price-especially those brought in from the northern part of the country. Mrs Adenike Taiwo, who sells beans in small and large quantities at Daleko market in Iyana-Isolo, Lagos, complained that a bag of Oloyin beans which used to cost N12, 500 is now N13, 500.  At Mile-12 market also in Lagos, a beans seller, Nwode Friday, blamed the hike in the price on the government. “A bag of Oloyin beans which formerly cost N12,000 and N12, 500 has now soared to N13, 500. Also, a Derica priced at N180 now costs N200”, he said.

    For onions, the price remained the same; a bag sells for N14, 000, while other small quantities go for N1, 000 and N500 respectively.

    The price of rice has also gone down. A bag which formerly cost N9,000 now goes for N8, 600. The reason for this is unknown by traders as they believe it is just a normal happening in the market.

  • Global securities regulators launch 43-point strategy to deepen markets

    The International Organisation of Securities Commissions (IOSCO), the global body for regulators of more than 95 per cent of the world’s securities markets, has launched a 43-point strategic plan aimed at fostering and deepening the capital markets over the next five years.

    The “2020 Strategic Direction for IOSCO” envisages that IOSCO’s goal for the rest of this decade will be to reinforce its position as the key global reference point for securities regulation. The strategic direction was approved by the Presidents Committee of IOSCO, which comprised of all the chairs of ordinary and associate members. Nigeria is a member of the board of IOSCO.

    The strategic direction and goal will be implemented through 43 initiatives in action plans covering six priority areas including research and risk identification, under which the global body plans to identify risks arising from securities markets, including market activities, technology and product developments, and unintended consequences of changes or proposed changes in laws and regulations.

    Also the global body will improve the international regulatory framework for securities markets by developing standards and guidance that are timely, responsive to market developments and internationally recognised.

    IOSCO will also promote implementation of IOSCO standards through monitoring and assessment while simultaneously addressing capacity building needs of its members, particularly in growth and emerging markets.

    It will also strengthening the exchange of information and co-operation in the enforcement of markets regulation, and in the supervision of markets and market intermediaries while ensuring effective representation of IOSCO’s views in other international organisations and effective collaboration with other standard setters within the international financial regulatory community.

    “The Strategic Direction to 2020 builds on our achievements in recent years by intensifying activity across each of our programs.  This is what our members are telling us they want.  It will benefit all members – with a particular emphasis on members from Growth and Emerging Markets,” Chairman of IOSCO, Greg Medcraft said.

    IOSCO had at its annual conference in London discussed the progress of its work across its policy, research, capacity building and co-operation agenda.

    IOSCO’s private meetings preceded public sessions focusing on the theme of Building a New Financial World which will focus on conduct standards, financial innovation and the many other challenges which financial regulators and industry face.

    “Our work agenda continues to highlight and reinforce our role as the key global reference point for securities regulation during a period of rapid change,” Medcraft said “We continue to be proactive and forward looking in building trust and confidence in markets which are grappling with new and emerging opportunities and risks, including those posed by digitisation.”

    IOSCO’s Growth and Emerging Markets (GEM) Committee, the largest of IOSCO’s Committees, also met and agreed to conduct policy work in priority areas,including impact of digitisation and innovation on capital markets, strengthening corporate governance, and the development of a toolkit on crisis management and contingency planning for emerging markets.

    Members also agreed to publish the GEM Committee’s report on SME Financing through Capital Markets, which reviews and identifies ways to facilitate capital market financing for SMEs in emerging markets.

    IOSCO is the leading international policy forum for securities regulators and is recognised as the global standard setter for securities regulation.  The organization’s membership regulates more than 95 per cent of the world’s securities markets in 115 jurisdictions and its membership continues to expand.

    Nigeria is a member of the board of IOSCO, the governing and standard-setting organ of IOSCO. IOSCO board consists of 32 securities regulators, including securities regulatory authorities of Argentina, Australia, Belgium, Brazil, Chile, China, France, Germany, Hong Kong, India, Italy, Japan, Korea, Malaysia, Mexico, Morocco, the Netherlands, Ontario, Pakistan, Portugal, Quebec, Romania, Singapore, South Africa, Spain, Switzerland, Trinidad and Tobago, United Kingdom and the United States.

  • Konga set for more African markets

    Having  closed  2014  with remarkable successes, Konga is looking to expand to other countries in Africa this year.

    According to its Head of Public Relations, Olatomiwa Akande, Konga started last year with a renewed focus on satisfying customers. A highly lauded feature by Konga was the launch of its own logistics unit called KExpress.

    Today, KExpress boasts a fleet of over 200 vehicles in less than five months that has greatly enhanced Konga’s order fulfillment to customers all across Nigeria; this is in addition to Konga’s partnerships with other third party courier companies across Nigeria.

    With the expansion of the website through its Marketplace platform, SellerHQ, Konga provided customers with a wider product offering and the added advantage of even more competitive pricing. With this, it now has over 150,000 products for its customers to choose from. Today, almost 10,000 sellers are registered and are actively advertising and trading on Konga.com.

    The highly talked about Yakata Sales in November delivered a record breaking N600 million in sales and closed at a 1,440 per cent sales increase compared to its 2013 edition. Konga sold 500 per cent more items in the two days of Yakata sales than it did in all of 2012.

    Over 40% of the people who shopped during Yakata had never made an online purchase before. With a significant part of Konga’s orders generated from mobile devices, this is a clear pointer that mobile is the way Nigerians will shop online in the future.

    The company now boasts of over 700 employees. It prides itself as an equal opportunity company with females making more than half of its staff population.

    Konga opened its engineering center with a mixed team of seasoned & young, passionate engineers. The company also launched hubs in South Africa and China.

    Konga also launched an Online Seller Academy for e-Commerce. With this novel initiative, Konga is committed to provide its online sellers’ community free self-service learning and training tips, allowing merchants achieve exceptional sales results through their online stores.

    Today the company has over 1.2 million fans on Facebook and more than seventy-five thousand followers on twitter.

    Konga received several prestigious awards and recognition in the course of the year. And in just two and half years, Konga appears to have run straight from the cradle, and is blazing the ecommerce trail in Nigeria today.

     

     

  • United Capital unveils financial markets report

    United Capital unveils financial markets report

    United Capital Plc has released its Nigerian Economy and Financial Markets 2015 report. The report provides a detailed review of the Nigerian market in 2014 with projections for the year.

    It discusses the outlook for different sectors, inherent opportunities as well as strategies for navigating the financial market. The report is an invaluable tool for investors covering  Global economic review and outlook, Africa update and outlook, oil price dynamics and Nigeria 2015 outlook, domestic macro-economic trends and outlook, capital market review and outlook as well as specific sector reviews and recommendations.

    “We are pleased to release the Nigerian Economy and Financial Markets 2015 report at United Capital. The report contains extensive research on capital markets, providing an in-depth analysis of various market groupings and industry trends that have shaped our predictions,” Group CEO of United Capital Plc, Toyin Sanni said.

    The report, he said, investigates the impact of the global economic and trade activities within advanced economies. It further dissects the impact of global financial activities on the Nigerian economy which is set to face one of the most difficult times in history, as global crude oil prices, a key anchor for fiscal strength and macroeconomic stability, continues on a downward trajectory in 2015.