Obiagelli:
I have read countless comments from the pdp and it's supporters about the decision by JP Morgan to remove Nigeria from it's bond index, the truth of the matter is that they had warned to remove is as far back as January 2015 for currency restrictions.

Was Buhari president in January?



www.bloomberg.com/news/articles/2015-02-05/nigeria-woes-deepen-as-jpmorgan-hits-emefiele-with-debt-warning


NB. I am totally indifferent about currency restrictions or JP Morgan itself.

I heard tonyebarcanista or Barcanista mentioned this as Buhari's failure in his thread.

dBard:



Just entered into my dictionary as one definition of irony.

@ o.p.. As has bin rightly stated, PMB is the president now, so the buck stops at his table. If he's being given credit for the improvements in power, he should,in same vein, be held responsible for d country's economic downturn.
Reading through the article, it's evident that the factors involved were , aside d falling oil prices, the investors reaction to Sanusis removal and the uncertainty surrounding the elections. The last paragraphs tho counters d supposition cos with the measures put in place by Emefiele, market forces were looking up and it was expected Nigeria will be off the watch list. For things to have deteriorated to this point lies with the man in charge.

Ioannes:


Please sir could you explain exactly why you think the removal of Nigeria from jp Morgan's bond index will affect the country negatively. do you know or you are just following them to shout, as long as we are crucifying Buhari right?...

free2ryhme:


Your stupidity knows no limit

millionaireman:


If Buhari fails to please the imperialists, his downfall comes handy.
After winning election, Buhari's first port of call was with the G7, followed with Downing Street.

If the imperialists grumble about Buhari's delay to form a cabinet, and withdrew from some business transactions with Nigeria, how come your Obiageli blames Jonathan and crew? That the Imperialists had once raised issues with Nigeria's economy during Jonathan administration does not give Jonathan government the blame for the recent actions of the Imperialists.

OlaSpeaker:

Time my friend can change a lot of things by the time PMB four years will elapsed Nigerians will know the difference...........
NB: the deference between "here" and "there" is "T" which is TIME

Obiagelli:
I have read countless comments from the pdp and it's supporters about the decision by JP Morgan to remove Nigeria from it's bond index, the truth of the matter is that they had warned to remove is as far back as January 2015 for currency restrictions.

Was Buhari president in January?



www.bloomberg.com/news/articles/2015-02-05/nigeria-woes-deepen-as-jpmorgan-hits-emefiele-with-debt-warning


NB. I am totally indifferent about currency restrictions or JP Morgan itself.

I heard tonyebarcanista or Barcanista mentioned this as Buhari's failure in his thread.

Obiagelli:
I have read countless comments from the pdp and it's supporters about the decision by JP Morgan to remove Nigeria from it's bond index, the truth of the matter is that they had warned to remove is as far back as January 2015 for currency restrictions.

Was Buhari president in January?



www.bloomberg.com/news/articles/2015-02-05/nigeria-woes-deepen-as-jpmorgan-hits-emefiele-with-debt-warning


NB. I am totally indifferent about currency restrictions or JP Morgan itself.

I heard tonyebarcanista or Barcanista mentioned this as Buhari's failure in his thread.

omonnakoda:
Why is being listed in Nigeria's interest? Why is being delisted a strategic disadvantage to Nigeria

angrybull:



Here are my reasons

Source Nairametrics


JP Morgan Chase (JPM) on Tuesday issued a press release saying it will start phasing out Nigeria from its Emerging Market Bond Index this month and will completely yank Nigeria off the index by end of October. The bank cites the current restrictions on forex transactions and policies of the CBN  as its reasons alleging that it has prompted investor concerns about a shortage of liquidity. JP Morgan had earlier in the year warned that it will take Nigeria out of the index if the current CBN policies which most investors see as capital controls is not reversed. The potential implications of this move are far-reaching as JP Morgan Index is currently tracked by over $200 billion Funds. Here are a few immediate implications for Nigeria

Political Capital 
The current Buhari Government has been taking credit for some of the policy initiatives carried out by Goodluck Jonathan Government such as stable power, the Treasury Single Account,  tax initiatives, war on terror, renewal of strong diplomatic ties with the US etc. The Buhari Government is also not relenting in calling out the past government for its bad policies and alleged corruption. This development will now give critics of the current government, the opposition party and sympathisers of the past government enough armory to blame the current government. They will surely blame the Buhari government for not acting swiftly enough to stop the decision of JP Morgan considering that it issued the threat about 9 months ago. They will also say it is because of the slow mode of operation of the current government (which for example has not announced a cabinet more than 100 days after being in office) that has made the CBN Governor act alone thus portraying the country as one without an economic direction. This will cost the president a lot of political capital as even his supporters must now be jittery.
Bond Yields
When Nigeria borrows money by selling bonds they pay investors based on the on prevailing bond yields. For example, a unit of a bond priced at N1000 may have been originally sold at an interest rate of 10%, that is N100 per N1000. With Nigerian thrown out of the index holders of that bond could dump it and sell for lower than N1000 per paper just to exit. If the average price drops to N800 due to high volume of sellers then that interest rate of 10% is now 12.5%, that is N100 dividend by N800.
This means the next time the Nigerian Government goes out to borrow it will no longer attract a 10% yield but will now borrow from investors at a yield of 12.5% or even more. This will cost the government more money in servicing interest thus taking money it could have used for capital projects for debt servicing.
Lack of foreign demand
By taking Nigeria off the index, there will be little or no demand for our bonds from foreign investors. Already, since JPM threatened to yank Nigerian off back in January, foreign holding of our bonds has dropped from a peak of $11 billion in 2013 to $3 billion today. It is therefore likely that this may even shrink further thus affecting the demand for our debts. A lack of demand for our debts means yields may even get higher as fewer investors will now sought for our bonds
Gain for other emerging markets
With Nigeria out of the scene, other emerging markets in Africa like Ghana, Kenya and even South Africa could now be more attractive to investors. They will simply now move their funds to competing countries leaving Nigeria in its wake. Since investors like to follow the money, it is also likely that other forms of investments may elude Nigeria because of this singular move.
Prestige and Clout
With the above happening, Nigeria will lose its prestige as not just the largest economy in Africa but the economy attracting the most foreign investments. This will be damaging to an economy that has been thumping itself as the destination to be for foreign investors.
Corporate Bonds
Local companies and banks also borrow money from foreign investors by selling foreign denominated bonds and also Naira bonds. Now that the Federal Government is likely to see their borrowing cost go up due to this development, it is likely that banks and other corporates seeking to borrow may have to pay more in interest as well. Some companies may not even have the courage to borrow with bonds again due to high lending rates and may result in some companies gets starved of funds so much that they may start to incur losses or even fold up. For those that have even borrowed refinancing such loans will now be expensive as yields have already gone up.
Higher lending rates
For the banks that are lucky enough to borrow, they will have to pass on that cost to someone else. Small businesses which rely on banks for small loans such as overdrafts, local purchase orders, letters of credit etc. may also see their borrowing rates rise even higher. For individuals with consumer loans they may also be expecting a letter from banks telling them that their loan rates have gone up.
Foreign Currency Cost
It is also likely that foreign currencies will cost more to use due to this action. Holiday makers or business travelers who use their cards abroad for foreign denominated transactions may also see themselves paying more whenever they spend their naira debit cards. Since some banks also channels some of their foreign borrowings in the forex market it is likely that they will charge end users more to recover the higher cost of borrowing.
Shallow market
With the exit of most foreign investors the long term plan of the Debt Management Office of ensuring that our bond market is deep is now in jeopardy. With little demand, it is unlikely that the government and other private companies seeking foreign currency loans will use the bond market as a possible source. This will make the market shallow and unattractive and could even throw some companies out of business. For example, Fund Sourcing Companies, Legal Advisers and other consultants may witness a huge reduction in deals thus affecting their revenues.
Ripple Effect
The Nigerian stock market which has seen some bullish trends in recent days may also be negatively impacted. With this announcement it is likely that this may hurt the confidence of foreign investors which make up about 45 to 50% of transactions in the Nigerian Stock Exchange. If they decide to exit the market because of this then the market may just be primed for another long bearish run.
Devaluation
If this situation is not handled properly it may also trigger another massive devaluation. This could be caused by foreign investors who have had enough and will now use this decision by JPM as a reason to pull out their funds. Pulling out their funds creates demand pressure on forex and may result in a devaluation of some sort.

millionaireman:


When you had to insult a former World Bank woman boss who drove Nigeria's economy pass South Africa's as Africa's fastest growing economy which VP Osinbajo even acknowledged yesterday, nothing stops anybody to understand that your mum must be in Purdah - a stark illiterate.

Ioannes:


great. I have seen what you copied and pasted. my question is do you understand it?

refreshrate:


Please wait first before commenting on your whole post what is an obiageli abeg?

Hope its not that sycho lady that stays at the roundabout in abuja shouting bring back our girls? I sincerely and immensely pray its not that same woman?

cos if it is, referencing her makes your entire post null and an absolute waste of space.

If not then, please carry on first what is an obiageli?

millionaireman:


When you had to insult a former World Bank woman boss who drove Nigeria's economy pass South Africa's as Africa's fastest growing economy which VP Osinbajo even acknowledged yesterday, nothing stops anybody to understand that your mum must be in Purdah - a stark illiterate.

angrybull:
Mr. Buhari is totally and comprehensively responsible for jp Morgan removal of Nigeria in their bond index. Any positive or negative that comes from last administration, he must take responsibility.


He is taking praises for improved electric power, and other positive things that comes with last government. So what is is wrong if he takes responsibility for this?

Mr buhari is the leader we know and by so doing he is totally responsible for yanking of Nigeria off jp Morgan bond index.

millionaireman:


If Buhari fails to please the imperialists, his downfall comes handy.
After winning election, Buhari's first port of call was with the G7, followed with Downing Street.

If the imperialists grumble about Buhari's delay to form a cabinet, and withdrew from some business transactions with Nigeria, how come your Obiageli blames Jonathan and crew? That the Imperialists had once raised issues with Nigeria's economy during Jonathan administration does not give Jonathan government the blame for the recent actions of the Imperialists.

BushidoBlue:



Hahahahahahahahahahahahahahahahahahaaa.....
Bwahahahahahahahahahahahahahaa

You guys should just stop, seriously.
We were warned in January, by May we swore in a new President. By September the new President has no economic plan talk more of an economic team, to forecast for 2016, or you think the world will obey body language rush hour tactics?
Investors are listening to the forecast and withdrawing their investments. We lost Trillions some weeks back and you blame it all on GEJ!?
Haba Oby!!!!
Try and start telling the truth. Clouds will be over the Nigerian economy till April 2016, when any serious economic strategy will yield fruit. I guess then it will also be GEJ's fault.

E be like say d thing don dey clear for una eye small small.

Is:


Maybe if u guys got off his back and gave him TIME. 3months is too short to determine anything. you were contented to give Dr. clueless 6yrs and even willing to give him another 4 to waste, claiming that he needed to make the country right.

you are all hypocrites. federal government couldn't pay salaries late last year/early this year (first time in this country), But it was okay afterall na our man dey there abi? smh.

Obiagelli:
Full article


(Bloomberg) -- As if the collapse in crude
prices, forthcoming elections and an Islamist
insurgency weren’t enough, investors in
Nigeria have another matter to worry about:
deciding whether the new central banker is
his own man.
Godwin Emefiele, appointed in June after
President Goodluck Jonathan suspended
predecessor Lamido Sanusi almost a year
ago, has focused on stemming currency
declines that could damage the government
of Africa’s biggest oil producer and economy
ahead of Feb. 14 elections. Emefiele is
“putting off painful and inevitable
adjustments” in the exchange rate until after
the vote, Bank of America Corp. economists
Oyin Anubi and Turker Hamzaoglu in
London wrote in a Jan. 21 report.
“It’s only natural to think there’s less
independence at the central bank,” Kevin
Daly, a fund manager overseeing $13 billion
of developing-market debt at Aberdeen Asset
Management Plc, said by phone from
London on Jan. 27. “He replaced arguably
the most effective and outspoken central
bank governor that we’ve seen in African
emerging markets for some time.”
Daly said he hasn’t held government bonds
in naira since about October, partly because
of concern he might not be able to easily sell
assets in the currency.
Emefiele, 53, said that politics doesn’t affect
any of his decisions.
“The central bank remains a very
independent institution, just like it was
under my predecessor,” he said by phone
from Abuja on Thursday. “We have never
been influenced by any political
consideration. No politician talks to us to try
and influence us.”
JPMorgan Warning
Still, the naira has become a campaign issue,
with opposition leader Muhammadu Buhari’s
team pointing to the weakening purchasing
power of the currency under Jonathan.
While oil producers with falling exchange
rates from Russia to Malaysia have avoided
imposing currency controls, Emefiele’s
measures cut daily trading of the naira to
less than a tenth of previous levels last
month, according to Standard Chartered Plc.
The restrictions prompted JPMorgan Chase &
Co. to warn Jan. 16 that it may remove
Nigeria from bond indexes tracked by more
than $200 billion of funds. Foreign holdings
of domestic debt have fallen by half since
2013, according to Standard Chartered.
“It’s difficult for policy makers to ignore that
political backdrop,” Ayodele Salami, who
oversees about $200 million of Nigerian
equities as chief investment officer of Duet
Asset Management, said by phone from
London on Feb. 4.
Investor caution has helped drive yields on
local government bonds to 15.4 percent, the
highest since August 2012 and steepest
among 31 emerging markets tracked by
Bloomberg. The stock market is posting the
world’s worst losses this year.
Jonathan’s Showdown
The naira weakened 0.7 percent to 193.82
per dollar as of 2:07 p.m. in Lagos, a record
low on a closing basis, to increase losses
over the past six months to 17 percent, the
most among 24 African currencies tracked
by Bloomberg. The exchange rate could still
tumble to 255, prices on 12-month forward
contracts show.
Jonathan, 57, a Christian from the south,
faces Buhari, a 72-year-old northern Muslim
and former military ruler, in Nigeria’s
tightest election since army rule ended in
1999.
Tensions are rising with the Islamist
militants Boko Haram declaring a caliphate
in northeastern Nigeria that’s the size of
Belgium. The group killed more than 4,700
people last year, double the number of
deaths during 2013, according to Bath, U.K.-
based risk consultancy Verisk Maplecroft.
Jonathan ousted Sanusi last February,
accusing him of “financial recklessness and
misconduct.” Now the Emir of Kano,
Nigeria’s second-most important Islamic
ruler, Sanusi had called on Jonathan to
investigate billions of dollars of oil revenue
he said were unaccounted for.
Speculative Demand
Emefiele took over in June, days before
crude prices began their 50 percent plunge.
Oil provides about 90 percent of Nigerian
export earnings and 70 percent of
government revenue.
The central bank spent $5 billion defending
the exchange rate in the last three months of
2014, reducing reserves to a three-year low
of $34 billion, while devaluing the midpoint
of the official exchange rate to 168 per dollar
from 155 and raising the benchmark
borrowing cost to a record 13 percent.
Trading restrictions introduced in December
were needed to cut “spurious or speculative
demand” for dollars, Emefiele said in an
interview last month. “Any investor that
wants to go out is able to do so freely,
without any hindrance.”
While Sanusi cut the the amount of foreign
currency banks can hold without assigned
buyers to 1 percent of shareholders’ funds
from 5 percent, Emefiele set the amount at
zero on Dec. 17, before allowing a 0.1
percent so-called net open position on Jan.
13.
Trading Crushed
The effect was to reduce daily trading to less
than $30 million from $300 million to $500
million and foreign holdings of government
bonds in naira to 14 percent of the total
from as much as 27 percent in 2013,
according to Samir Gadio, Standard
Chartered’s head of African strategy.
By contrast, Sanusi liberalized Nigeria’s
markets by lifting a requirement for foreign
investors to hold local-currency debt for at
least one year. That resulted in JPMorgan
adding the nation’s bonds to its GBI-EM
local-currency indexes in 2012. Foreigners
increased their holdings of the securities
almost fivefold in the next year, according to
Bank of America.
“Sanusi had high credibility in the
international markets and both the nature of
his exit and the context resulted in an
increase in Nigerian risk premium, which
has remained,” Jim O’Neill, the former
chairman of Goldman Sachs Asset
Management, who now works as a
Bloomberg View columnist, said in e-mailed
comments from London on Jan. 28.
Negative Watch
JPMorgan, placing Nigeria on “index watch
negative,” said the drop in currency and
bond trading “challenges the ability of
foreign investors to replicate the
benchmark.” The New York-based lender
will make a decision within five months.
Craig Macdonald, a spokesman for JPMorgan
in London, declined to comment.
The central bank’s decision to boost the net-
open position limit to 0.5 percent of funds on
Jan. 22, shortly after JPMorgan’s warning,
increased daily trading volumes to about
$250 million to $300 million, Emefiele said
on Thursday.
“We are confident we will remain in the
index based on the decision,” Emefiele said.
“The main issue was liquidity and we are
convinced that liquidity has come up to the
level they desire.”
For the market to “unfreeze,” the exchange
rate probably needs to weaken to 220 per
dollar, Antoon de Klerk, who helps oversee
$18 billion of emerging market debt at
Investec Asset Management Plc, said by
phone from London Feb. 2.

Ioannes:


bro take it easy ok. no need to respond with insults. i think the former minister was an epic failure. pls forget all those paper economics that she was given by imf and world bank. ey knew our economy was shitty yet they goaded her on. dont forget she wasnt just the minister of finance, she was also the coordinating minister of the economy. a prime minister of sorts. one which Nigeria has never had nor will probably ever have. she had the opportunity to write her name in gold by totally diversifying our economy from crude oil based and single resource based but she flunked it. under her watch Nigeria lost massively to corruption and theft. it's a pity Nigerians are glorifying her cluelessness along with her bosse's.

INTROVERT:
reading... please has anyone called tonyebarcanista yet




well, going by the first paragraph, the warning in January 2015 should have been enough reason for GMB to appoint ministers, set up a cabinet/economic team as soon as he was elected and hit the ground running bearing in mind that election years are more about campaigns and less of administration.


my opinion

INTROVERT:
reading... please has anyone called tonyebarcanista yet




well, going by the first paragraph, the warning in January 2015 should have been enough reason for GMB to appoint ministers, set up a cabinet/economic team as soon as he was elected and hit the ground running bearing in mind that election years are more about campaigns and less of administration.


my opinion

millionaireman:


Lol, I don't care a hoot whether it is the bringbackourgirls Obiagelli or another. They are all suffering from Jonathanphobia, Truthphobia.

This is how people kept quiet and they manipulated all sorts of false propaganda and evil political campaign tactics and imposed a man like Buhari as president of Nigeria in this 21st century. Buhari had to need an interpreter before he could effectively communicate with the Imperialists - no good for a country in modern times

angrybull:



No Sir, please educate me because I am always willing to learn.

Obiagelli:
I have read countless comments from the pdp and it's supporters about the decision by JP Morgan to remove Nigeria from it's bond index, the truth of the matter is that they had warned to remove is as far back as January 2015 for currency restrictions.

Was Buhari president in January?



www.bloomberg.com/news/articles/2015-02-05/nigeria-woes-deepen-as-jpmorgan-hits-emefiele-with-debt-warning


NB. I am totally indifferent about currency restrictions or JP Morgan itself.

I heard tonyebarcanista or Barcanista mentioned this as Buhari's failure in his thread.

989900:
Between JP Morgan's withdrawal and the withdrawal/unremmited tens of billions of dollars lost to corruption, which is worse?

You guys find excuses to justify your own money being stolen right under your nose, but wail murder on some other guy withdrawing his own money.

Some guys on the Tunde Bakare thread yesterday, even saw no wrong in Orubebe/GEJ giving the pastor $50,000 as transport money!

Orikinla:
. Many people really need help with ratiocination on Nairaland. Buhari took his oath of office as President of Nigeria on May 29 and there is no way he would have been able to change a decision by a foreign firm months before his swearing in ceremony as the new President of Nigeria. And again, many people are making more noise than sense on this matter and especially those who don't even understand it at all.

naijaking1:


[s]Your fixated hatred on GEJ doesn't even allow you to see the bigger picture here. This is not about an alledged $50k bribe, but about the whole Nigerian economy.
You remind me of Sanusi L Sanusi in his song and dance days at CBN, fighting "corruption" with religious zeal, hunting down Ibru, Akingbola, and other personal enemies of his, while at the same time, he was stealing, sorry, 'donating' billions to his friends in APC in the name of community project.
Sanusi went around ochestrating his imaginary war on corrupt bank CEOs, raking our banking system, and creating a situation where other countries were recovering from global stock crash 4 years ago, and we simply continued to decline, because the guy appointed to be our chief economist had very little knowledge of economics in the first place.
However, that didn't stop him from going around to warn that our stock treading was like a gambling house. Today, the result is obvious.
Same goes for Buhari, poor knowledge of the economy, how to improve it, and even how to chose the right crop of personel to bring it to World standard[/s].