Cost of funds rises as market liquidity drops to N96bn

Cost of funds rose significantly in the interbank money market last week following series of liquidity outflow which caused market liquidity to fall by 26 per cent to N96 billion, week-on-week (WoW). During the week, the interbank money market experienced outflow through treasury bills sale and foreign exchange sales by the Central Bank of Nigeria (CBN).

MRS commissions Africa’s largest jetty in Lagos

Foremost downstream oil company, MRS Oil Nigeria Plc, saturday commissioned a berthing terminal – Dantata Jetty, which has a capacity to berth vessels of 80,000–120,000 metric tonnes capacity at the Tin Can Island Port in Lagos.

FG to revive sale of 10 NIPP plants in new economic plan

The Federal Government has said it would conclude the sale of 10 brand new electricity generation plants built under the National Integrated Power Projects (NIPPs) by the Niger Delta Power Holding Company Limited (NDPHC) in line with its recently launched Economic Recovery and Growth Plan (ERGP).

Export of raw minerals to be banned soon – Fayemi

The Minister of Mines and Steel Development, Dr Kayode Fayemi, has said that government has put in place measures to stop exportation of raw solid minerals by October.

EFCC Inaction Causes Sinking of Petroleum Vessels

Revelations emerged on Sunday about how the delay by the Economic and Financial Crimes Commission (EFCC) to engage an auctioneer to dispose of petroleum products on several vessels forfeited to the federal government caused the sinking of at least two vessels with their content.

U.S. unemployment drops to 4.5%, lowest in decade

However, hiring slowed substantially in March, President Trump's second full month in office. America only added 98,000 jobs, according to the Labor Department.

It's a disappointment, given the U.S. added 219,000 jobs in February and averaged 187,000 new jobs a month last year. But economists are already calling it a one month "blip." It's common to see a weak month of hiring at some point during the winter. Most experts expect job growth to pick up again soon.

Fashola Raises Hope for Better Electricity Supply

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, on Sunday raised hope for improved electricity supply in the country, assuring Nigerians that power generation would ramp up to 4,000 megawatts within the next six days.

CBN Injects $418m to Oil Marketers, Others

In line with its avowed determination to ensure ample supply of foreign exchange (FX) in the market, the Central Bank of Nigeria (CBN) last Friday auctioned US$418 million through retail-Special Secondary Market Intervention Sales (SMIS), at a marginal rate of N310/$.

Oil Set for Longest Gain This Year as Libyan Field Said Shut

Oil headed for its longest run of gains this year as Libya’s biggest oil field was said to have suffered another outage while Russia signaled it’s weighing an extension of OPEC-led production cuts.

Futures gained for a fifth day in New York after advancing 3.2 percent last week following a U.S. military strike on Syria. Libya’s Sharara field stopped producing just one week after it reopened, according to two people familiar with the matter, although it wasn’t clear why. Russia’s energy ministry has been in discussions with oil companies regarding the need to prolong the six-month deal when it expires, Energy Minister Alexander Novak said Friday.

Rand Goes From World's Best to Worst on Zuma, Junk Status: Chart

South Africa’s rand, which had been the world’s best-performing currency in 2017, gave up all its gains in just a week after President Jacob Zuma recalled Pravin Gordhan from meeting investors in London and replaced him as finance minister in a midnight cabinet shuffle, spurring S&P Global Ratings and Fitch Ratings Ltd. to downgrade the nation’s debt to junk.

French Drugs Maker Targets Africa With Nigerian Acquisition

Biogaran SAS, a closely held French pharmaceuticals manufacturer, plans to tap into Nigeria’s $1.3 billion drugs market as a launchpad for its expansion into Africa, company President Pascal Briere said.

Buhari releases N54bn to settle pension backlog

The Muhammadu Buhari administration has released N54 billion to clear part of the backlog of accrued pension rights for the years 2014, 2015 and 2016. The Director of Information, Ministry of Finance, Mr Salisu Danbatta said on Wednesday that N41.5 billion has already been released to the National Pension Commission (PENCOM).

Naira Overvalued by 20%- IMF

LAGOS — Fund, IMF, ye The International Monetary Fund yesterday, said the naira is overvalued by 10 to 20 per cent. Head of IMF Mission in Nigeria, Gene Leon, stated this during a telephone media briefing on the IMF staff report on 2017 Article IV Consultation with Nigeria.

FEC approves $1.3bn loan request from World Bank, others for DBN

ABUJA —The Federal Government, yesterday, approved the request for three loans worth $1.3 billion for the newly established Development Bank of Nigeria, DBN, to kick off. The Federal Executive Council, FEC, formally granted the approval at yesterday’s meeting presided over by President Muhammadu Buhari at the Presidential Villa, Abuja. FEC also gave its nod for the registration of 200,000 personnel of the Nigerian military, cutting across the Army, Navy and Air Force into the Integrated Personnel Payroll Information System, IPPIS. Finance Minister, Mrs Kemi ADEOSUN This, the council did by approving the award for the procurement of project managers and verification consultants for a total cost of N550 million to bring the personnel onto the IPSS platform, hoping to bring in all the military by third quarter of 2017.

Oil prices fall on bloated U.S. market, but other regions tighten

Oil prices fell on Thursday as record U.S. crude inventories underscored that markets remain bloated, although traders said there were signs that other regions were gradually tightening.

Amazon acquires right to buy stake in fuel cell maker Plug Power

Hydrogen fuel cell maker Plug Power Inc (PLUG.O) said on Wednesday Amazon.com Inc (AMZN.O) had acquired the right to buy up to 23 percent of the company and that it would supply batteries to power forklifts used by the online retailer in its warehouses.

Oil hits one-month high near $55 on tighter supplies

Oil hit a one-month high near $55 a barrel on Wednesday as a fall in U.S. crude inventories raised hopes OPEC-led supply cuts were clearing a glut, while an outage at the largest UK North Sea oilfield lent support.

China's new construction project sends stocks soaring

China's plans to develop a huge region south of Beijing sent construction and real estate stocks surging on Wednesday

Markets in mainland China were closed for a national holiday for the past two days, so Wednesday was the first real opportunity for investors to react to Saturday's announcement of the new economic zone.

Dubbed the Xiongan New Area, the zone is 100 km (62 miles) south of downtown Beijing. It is meant to advance the development of the Beijing-Tianjin-Hebei region, according to state run news agency Xinhua.

IMF Sees Ugandan Growth Rebound in 2017-18 on Infrastructure

Economic growth in Uganda may accelerate in the coming fiscal year, underpinned by government spending on infrastructure and an anticipated recovery in lending to the private sector, according to the International Monetary Fund.

Global Shipping Fleet Braces for Chaos of $60 Billion Fuel Shock

Little more than 2 1/2 years from now, the global fleet of merchant ships will have to reduce drastically how much sulfur their engines belch into the atmosphere. While that will do good things -- like diminishing the threat of acid rain and helping asthma sufferers -- there’s a $60 billion sting in the tail.

That’s how much more seaborne vessels may be forced to spend each year on higher-quality fuel to comply with new emission rules that start in 2020, consultant Wood Mackenzie Ltd. estimates. For an industry that hauls everything from oil to steel to coal, higher operating costs will compound the financial strain on cash-strapped ship owners, whose vessels earn an average of 70 percent less than they did just before the 2008-09 recession.

Africa's Biggest Hydropower Dam to Supply Electricity to Sudan

Sudan will receive electricity from Ethiopia’s flagship dam via a transmission line once Africa’s biggest hydropower plant is complete, the two countries’ leaders said.

The line will connect the Grand Ethiopian Renaissance Dam on the Blue Nile River with Sudan’s capital, Khartoum, Ethiopian Prime Minister Hailemariam Desalegn said Tuesday.

Oil Rally Fizzles as Prices Made Vulnerable by Libyan Recovery

Oil’s rally above $50 a barrel is running out of steam after Libyan production returns, bringing the focus back to OPEC.

Futures in New York extended losses after dropping 0.7 percent on Monday, following a 5.5 percent jump last week. While OPEC output fell by 200,000 barrels a day in March, the decline was helped by cuts in Nigeria and Libya that are exempt from its production-curb deal to shrink a global glut, a Bloomberg News survey shows. Libya was said to resume pumping at its biggest field after about a week of disruption that had helped boost prices.

Buhari's Change of Tack in Nigeria Delta Boosts Oil Output

When militants in Nigeria’s southern Niger River delta started attacking oil installations, President Muhammadu Buhari promised to crush them by force. A year and $7 billion in lost oil exports later, his decision to switch tack by negotiating with the fighters seems to be working.

All but one force majeure, a clause that gives oil producers the right to miss supply obligations, have been lifted since peace talks were initiated in November with militants. Shipments at Forcados, the nation’s third-largest export terminal, are on course to restart in the second quarter. Nigeria rivals Angola as Africa’s biggest oil producer.

Nigeria’s oil output fell behind Angola’s due to militant attacks.

U.S. debt to double over the next 30 years

U.S. debt is likely to double as a share of the economy over the next 30 years, according to the Congressional Budget Office.

Considering President Trump's push for big tax cuts and a promise not to touch key drivers of the debt, the picture could worsen.

Right now the nation's debt amounts to 77% of GDP. That's already the highest level since the post-World War II era. If current law remains in effect, it's on track to jump to 150% by 2047, according to the latest long-term budget projections from the CBO.

The problem is that while both spending and revenue are projected to grow, spending will far outpace revenue.

Reckitt Benckiser Considers Selling French's Sauce Brand

Reckitt Benckiser Group Plc is considering a sale of its food business, which makes French’s mustard and ketchup, to help pay for the $16.6 billion acquisition of infant-formula maker Mead Johnson Nutrition Co.

Reckitt will begin a review and consider all options for the business, which it called “non-core” in a statement Monday. With 411 million pounds ($515 million) in sales last year, French’s Foods accounted for 4 percent of Reckitt Benckiser’s total revenue.

The possible sale of the food unit comes amid a reshuffling of portfolios at global consumer giants, many of which are experiencing a slowdown in sales growth for stalwart brands. Unilever has launched a strategic review after fending off a takeover approach from Kraft Heinz Co., and a sale of its spreads business is one option, according to people familiar with the situation. Reckitt is focusing on businesses such as Dettol cleaner and Durex condoms, plus the Enfamil baby formula brand it’s getting from the Mead Johnson deal.

Brexit has just begun and jobs are already leaving U.K.

Britain's future relationship with the European Union is likely to take years to negotiate, forcing companies to plan for the worst to protect their business.

The U.K. started the two-year countdown to Brexit on Wednesday. Prime Minister Theresa May wants to discuss divorce terms at the same time as negotiating an ambitious new trade deal with the U.K.'s biggest export market.

But European leaders, including Germany's Angela Merkel, won't talk trade until the divorce is largely agreed.

South Africa's currency plummets after finance minister fired

The rand nosedived 4% against the U.S. dollar after President Jacob Zuma ousted Pravin Gordhan and a slew of other top ministers overnight, tipping the country into a new round of political turmoil and economic uncertainty.

Investors were already fretting about Africa's second biggest economy after Zuma ordered Gordhan to cancel a series of meetings in London on Monday and return home. The rand has slumped about 8% this week.

Kachikwu: Nigeria to Become Exporter of Refined Fuel

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said that Nigeria will begin to export refined petrol and other petrochemical products within the next four years if plans to ramp up the country’s domestic refining capacity work out well.

Kachikwu stated this recently in Abuja when he briefed journalists on his plans for the country’s petroleum sector.
He noted that if the plans to co-locate new refinery investments within the country’s existing refinery complexes in Kaduna, Warri and Port Harcourt become successful, and the private refinery owned by the Dangote Group comes on stream, Nigeria will produce more petrol than she needs and then export the excess.

IMF Welcomes Nigeria’s Easing of ‘Some Exchange Restrictions’

The Article IV Consultation came on the heels of the CBN’s decision to increase the amount of dollars to be sold to Bureau de Change (BDC) operators to $10,000 a week, up from $8,000, in its determination to sustain liquidity in the FX market.

The IMF said: “Directors emphasised that these policies should be supported by tighter monetary policy and fiscal consolidation to anchor inflation expectations and to limit the risk of exchange rate overshooting, as well as structural reforms to improve competitiveness.”

Access Bank Splashes N18.8bn on Its Shareholders as Dividend

The shareholders of Access Bank Plc on Wednesday smiled home from the 28th Annual General Meeting (AGM) of the bank in Lagos, having received a total of N18.8 billion in dividends for the year ended December 31, 2016.
The dividend translates to 65 kobo per share, up from 55 kobo per share received in 2015.

The declaration of a better dividend payout for its shareholders was reflective of Access Bank’s better than expected revenue of N381.3 billion, an increase of 13 per cent from the N337.4 billion reported by the bank in 2015.

IMF Urges Nigeria to Remove Currency Curbs to Boost Economy

Nigeria should remove currency-trading restrictions and reduce its budget deficit and debt levels to help the economy recover this year, the International Monetary Fund said.

“Under unchanged policies, the outlook remains challenging,” the Washington-based lender said in an emailed statement after an article IV consultation with Nigerian officials. “Stronger macroeconomic policies are urgently needed to rebuild confidence and foster an economic recovery.”

The West African nation will probably seek $3.5 billion abroad for its 2017 budget to plug a deficit in President Muhammadu Buhari’s spending proposals of 7.3 trillion naira ($23 billion). The government returned to international capital markets on Wednesday for an additional $500 million after raising $1 billion of Eurobonds in February. Its debt-service costs doubled to 66 percent of revenue last year from 2015, the IMF said.

“Nigeria’s debt-servicing cost is quite high, and peculiar because it’s high due to low revenue,” Yvonne Mhango, an economist at Renaissance Capital, said by phone from Johannesburg. “The government should increase revenue by raising value-added tax, expanding the tax base and improving compliance.”

Nigeria this month announced a four-year program to create 15 million jobs and boost an economy that shrunk by 1.5 percent last year, the first contraction since 1991. The blueprint also aims to boost economic growth to 7 percent by 2020 by lifting oil output, opening farmland and increasing investment in power, roads, rail and ports. Gross domestic product will probably expand 0.8 percent this year and 1.9 percent in 2018, the IMF said.

The plan aims to reduce the inflation rate to single digits from 17.8 percent in February. The central bank has kept its key rate at a record high of 14 percent since July even as price growth is at almost double the government’s 9 percent target.

Easing exchange-rate restrictions “should be supported by tighter monetary policy and fiscal consolidation to anchor inflation expectations and to limit the risk of exchange-rate overshooting,” the IMF said.

The naira lost about one third its value against the dollar when the central bank removed a currency peg in June. To keep it from further falling, the regulator continues to regularly sell dollars and Governor Godwin Emefiele has said they will enforce a managed float for the foreign-currency market.

Currency Restrictions

Authorities should “remove the remaining restrictions and multiple-currency practices, thus unifying the foreign-exchange market and helping regain investor confidence,” the IMF said.

The currency-trading restrictions and multiple foreign-exchange rates have impeded capital inflows and curbed lending, according to Renaissance Capital’s Mhango.

“Nigeria has to let the market be more involved in valuing the naira, and as the IMF says, needs tight monetary policy to attract capital flows, improve liquidity and stabilize the currency,” she said.

S&P Global Ratings spared the West African nation a downgrade earlier this month, affirming its B rating with a stable outlook, and said increasing crude output and government spending will support growth.  

Source: Bloomberg.

The Trump stock market rally is under siege

Wall Street no longer believes President Trump's agenda is a slam dunk.

The Dow fell on Monday for the eighth day in a row, its longest losing streak since 2011.

Trump's stunning failure to repeal and replace Obamacare spooked investors, sending the Dow sinking as many as 184 points in the first few minutes of trading. But the index rebounded from those early losses, closing down by 46 points. The Nasdaq eked out a gain of 0.1%.

Desirous of alleviating the pains of retail foreign exchange (forex) consumers, the Central Bank of Nigeria (CBN) on Monday directed all banks to immediately begin the sale of forex for BTA, PTA, tuition and medical fees to customers at not more than N360 per dollar, from the N380 to the dollar it was sold previously.

The CBN in a note, explained that it will sell to banks at N357 per dollar, adding that banks are expected to post the new rates in the banking halls of their branches immediately.

….details to follow later.

Source: ThisDay

Photographer: Desirey Minkoh/AFP/Getty Images Shell Sells Gabon Oil Assets to Carlyle for $587 Million

Royal Dutch Shell Plc has agreed to sell its onshore oil assets in Gabon to a unit of Carlyle Group LP for $587 million, taking it closer to its $30 billion divestment target.

Carlyle’s unit Assala Energy Holdings Ltd. will also take on $285 million of debt from Shell’s Gabon unit and will make an additional payment of as much as $150 million depending on production performance and commodity prices. The transaction will also result in Shell taking a $53 million impairment charge this quarter, the company said in a statement Friday.

Shell is about two-thirds of the way through its divestment target, due to be completed by the end of next year. The money from the sales will be used to pare down debt taken to fund its record purchase of BG Group Plc last year. It sold $7.25 billionof oil sands assets in Canada this month and offloaded a large chunk of U.K. North Sea positions in January. It is also planning to sell fuel stations and a refinery in Argentina.

The sale in Gabon “is consistent with Shell’s strategy to concentrate our upstream footprint where we can be most competitive,” Andy Brown, director for the upstream business, said in the statement. “Shell will continue to pursue opportunities in sub-Saharan Africa.”

The transaction is subject to conditions including various approvals and is expected to close in the middle of this year.

Carlyle will buy all of Shell’s onshore oil and gas operations and related infrastructure in Gabon. These include five operated fields, interests in four others, a pipeline system and an export terminal, according to the statement. Shell’s share of production from the fields was about 41,000 barrels of oil equivalent a day in 2016.

Shell’s trading unit will retain the rights to take the oil for the next five years, according to the statement. The company will continue to hold licenses for two blocks located off Gabon’s coast.

Assala Energy will be funded by Carlyle International Energy Partners, a $2.5 billion fund, and Carlyle Sub-Saharan Africa Fund, which has $698 million under management, according to a separate statement.

“Assala Energy will invest responsibly to secure and increase production levels as well as oilfields’ life,” David Roux, Assala Energy’s chief executive officer, said in the statement. “We are committed to ensuring long-term, sustainable growth and creating value.”

Source: Bloomberg

 United Bank for Africa (UBA) Plc, the pan-African financial services group operating in 19 countries, has released its audited 2016 full year results, showing a significant growth in gross earnings and profits.

A statement from the bank on Sunday attributed the improved earnings and profits to its resilience, enhanced productivity and geographic diversification, evident in the impressive contribution from its African subsidiaries.
The UBA Group reported a 22 per cent growth in gross earnings to N384 billion for December ending 2016, from N315 billion at the end of the 2015 financial year, illustrating the bank’s ability to grow profitability despite the difficult macroeconomic environment.
According to the statement, in addition to the rising adoption of electronic banking channels in many of the African markets where UBA operates, the bank leveraged its strong franchise and geographical footprint.

Kaisa Surges 85% as Trading Resumes After Two-Year Break

Kaisa Group Holdings Ltd., the first Chinese property developer to default on its overseas debt, surged by a record 85 percent in Hong Kong as its long-overdue results showed that the company’s loan burden has decreased.

Trading in Kaisa shares resumed after a two-year suspension as the developer released its results on Sunday, the final condition it needed before it could apply for its stock to trade again. The shares traded 70 percent higher at HK$2.65 at 11:02 a.m. in Hong Kong, after earlier reaching HK$2.92. Kaisa shares fell 53 percent in the months leading up to its suspension in March 2015.

Ivory Coast Seeks More IMF Funding to Aid Budget as Cocoa Slumps

Ivory Coast’s government said it is seeking more assistance from the International Monetary Fund to support the nation’s 2017 budget after cocoa prices slumped, hurting the finances of the world’s biggest grower.

Keystone Bank get new owners

The Asset Management Corporation of Nigeria (AMCON) has sold Keystone Bank Limited, the last of the three nationalized banks to a consortium of local investors; Sigma Golf Nigeria Limited and Riverbank Investment Resources Limited.

FG Unfolds Power Recovery Plan, Okays N80bn for Road Rehabilitation

The federal government wednesday unfolded what it described as power sector recovery programme with the aim of creating a more viable and vibrant power sector. The government also approved N80 billion for the rehabilitation and construction of many roads and bridges in 12 states of the federation.

The beneficiary states are: Oyo, Adamawa, Taraba, Plateau, Zamfara, Kwara, Bauchi, Kano, Enugu, Osun, Sokoto and Kaduna States.

Access Bank plans to issue fresh Eurobond

Access Bank Plc is set to issue the first Eurobond from Nigeria in almost two years after choosing banks to arrange a new deal.

Nigeria’s fourth-largest lender by assets will meet investors in the United States and Europe from Tuesday through October 3rd, and plans to sell five-year debsetups Chief Executive Officer, Herbert Wigwe told Bloomberg.

Barclays Plc, Citigroup Incorporated and JPMorgan Chase & Co would arrange the deal, he said.

“It will be for working capital, for lending to investment-grade names,” including Nigerian companies seeking to expand their exports, Wigwe said.

Brent Oil Falls to Lowest Since November as U.S. Stockpiles Rise

Brent oil dropped to the lowest in almost four months as surging U.S. crude inventories dim optimism that OPEC and its partners will curb output enough to rebalance the market.

The global benchmark fell below $50 a barrel for the first time this year during the session. American crude supplies hit a record last week and output rose as the nation’s oil drillers added rigs. Prices came off the day’s lows as attention shifted to gasoline stockpiles, which slipped for a fifth week. The Organization of Petroleum Exporting Countries and 11 other nations began trimming supply for six months starting Jan. 1 in an effort to ease a global supply glut.

U.S. stock futures slip as concerns mount over delays to Trump tax cuts

U.S. stock index futures were lower on Wednesday as investors sought safe haven assets, a day after Wall Street posted its biggest one-day fall since the November election.

Investors are becoming increasingly worried about the ability of President Donald Trump to deliver on his campaign promises of cutting taxes.

President Donald Trump on Tuesday tried to rally Republican lawmakers behind a plan to dismantle Obamacare, with Republican party leaders aiming to move the controversial legislation to the House floor for debate as early as Thursday.

CBN keeps rates on hold, sees Naira rate improving

The Central Bank of Nigeria (CBN) kept the main interest rate at 14 percent as expected on Tuesday and pledged to close the gap between the official and black market exchange rate.

CBN governor Godwin Emefiele said inflationary pressures were continuing unabated while Africa’s biggest economy was undergoing its first recession in 25 years, justifying the rate decision. All but one of 13 economists surveyed in a Reuters poll had expected the bank to keep the benchmark rate on hold.