- [size=13pt]"Losing index status is classic own goal," [/size] says Aberdeen

- Ashmore dumps debt as Africa's biggest economy deteriorates.

- Nigerian currency could face devaluation.



by Paul Wallace Emele Onu

As if being kicked out of one of the world’s biggest emerging-market bond indexes isn’t enough, Nigeria now faces the risk of its credit rating falling further into junk.
Standard & Poor’s, which rates Africa’s largest oil producer four levels below investment grade at B+ with a stable outlook, releases a review of its assessment on Sept. 18. A week later, it’s the turn of Fitch Ratings, which has Nigeria at BB-, one level above S&P, with a negative outlook.
Those decisions come on the heels of JPMorgan Chase & Co.’s announcement last week that Nigerian debt will be removed from its local-currency emerging-market indexes, tracked by more than $200 billion of funds. Adding to a loss of favor among investors is a delay by President Muhammadu Buhari in naming his cabinet since taking power in May as the continent’s biggest economy grapples to cope with oil prices below $50 a barrel and speculation that the currency will be devalued.

“There’s a very high risk of a downgrade,” Jan Dehn, head of research at Ashmore Group Plc, which sold all of its Nigerian Eurobonds and naira debt over the past year, said. “At the moment, I’m pretty far away from even considering buying anything Nigeria. It’s a deteriorating credit.”
The bond market is siding with Ashmore and Aberdeen Asset Management Plc, which also predicts a ratings cut. Yields on Nigerian dollar bonds have been trading higher than those of Kenya -- which has an economy almost a tenth of Nigeria’s size and is rated lower by Fitch -- since mid-August. When that last happened in March, S&P downgraded Nigeria and Fitch followed days later by lowering its outlook from stable.

“Fitch is the one people will be watching most closely,” Alan Cameron, an economist at Exotix Partners LLP in London, said by phone on Sept. 10. “The oil price has been low for a long time and people assume that’s at least a semi-permanent state of affairs, which will have a very significant impact on fiscal and external projections. It is difficult to argue that Nigeria should not be downgraded at this point.”
Central Bank of Nigeria Governor Godwin Emefiele has introduced several foreign-exchange restrictions since December to prevent dollars fleeing the economy amid an almost 60 percent drop over the past year in the price of oil, which accounts for 90 percent of exports and two-thirds of government revenue.
Record Low
Emefiele resorted to the measures as the naira weakened 20 percent to a record of 206.32 per dollar in the year through Feb. 12. While the restrictions helped to stabilize the currency at an average of 198.98 since its all-time low, foreign-exchange trading has dried up, contributing to JPMorgan’s decision to remove Nigeria’s bonds from its benchmark indexes.
“To lose the index status is a classic own goal,” Kevin Daly, a money manager at Aberdeen, who sold all his Nigerian sovereign debt last year, said by phone from London on Sept. 10. “They were trying to convince investors that they should remain in. The problem was that by squeezing the FX market and not allowing any locals to trade it, they just pushed investors to the sidelines. That forced JPMorgan’s hand.”

Fitch could lower Nigeria to B+, while S&P will wait to see Buhari’s cabinet and what economic policies he introduces, said Daly, who prefers Angolan and Gabon dollar securities because of their higher spreads. Buhari has pledged to name his ministers by the end of September. Calls to Femi Adesina, the president’s spokesman, and Ibrahim Mu’azu, a spokesman for the Abuja-based central bank, weren’t answered.
Yields on Nigeria’s $500 million of bonds due July 2023 rose 1 basis point to 8.03 percent as of 10:19 a.m. in London on Monday, having climbing to a record high of 8.54 percent on Aug. 24. Rates on Kenya’s $2 billion of debt maturing in June 2024 fell 2 basis points to 7.52 percent. An index of Nigerian dollar notes has lost 5.8 percent this quarter, compared with an average drop of 0.5 percent among 59 emerging markets tracked by Bloomberg.
Average naira-denominated government bond yields rose 7 basis points to 16 percent last week, the highest among 31 emerging markets tracked by Bloomberg.

“It’s markets are basically frozen domestically,” said Ashmore’s Dehn, who prefers Eurobonds issued by Ivory Coast and Kenya because their economies are better managed. “Monetary policy and access to the Nigerian market is being managed in a way that’s incomprehensible to investors. The Buhari administration has shown a remarkable lack of urgency. At a time of negative oil shocks, it is not confidence inspiring.”

http://www.bloomberg.com/news/articles/2015-09-14/rattled-by-jpmorgan-exit-nigerian-bonds-now-face-downgrade-risk

Prior to his assumption into office, President-Elect Buhari had told us he was going to hit the ground running.

In the end... he hit the ground shattering.

cc: Ishilove, Lalasticlala, Obinoscopy, Anonimi, Whynotthetruth, MizMyColi, Firefire, Sunnyb0b0, Ikengawo, WombRaiders.

Kenai:
- [size=13pt]"Losing index status is classic own goal," [/size] says Aberdeen

- Ashmore dumps debt as Africa's biggest economy deteriorates.

- Nigerian currency could face devaluation.



by Paul Wallace Emele Onu

As if being kicked out of one of the world’s biggest emerging-market bond indexes isn’t enough, Nigeria now faces the risk of its credit rating falling further into junk.
Standard & Poor’s, which rates Africa’s largest oil producer four levels below investment grade at B+ with a stable outlook, releases a review of its assessment on Sept. 18. A week later, it’s the turn of Fitch Ratings, which has Nigeria at BB-, one level above S&P, with a negative outlook.
Those decisions come on the heels of JPMorgan Chase & Co.’s announcement last week that Nigerian debt will be removed from its local-currency emerging-market indexes, tracked by more than $200 billion of funds. Adding to a loss of favor among investors is a delay by President Muhammadu Buhari in naming his cabinet since taking power in May as the continent’s biggest economy grapples to cope with oil prices below $50 a barrel and speculation that the currency will be devalued.

“There’s a very high risk of a downgrade,” Jan Dehn, head of research at Ashmore Group Plc, which sold all of its Nigerian Eurobonds and naira debt over the past year, said. “At the moment, I’m pretty far away from even considering buying anything Nigeria. It’s a deteriorating credit.”
The bond market is siding with Ashmore and Aberdeen Asset Management Plc, which also predicts a ratings cut. Yields on Nigerian dollar bonds have been trading higher than those of Kenya -- which has an economy almost a tenth of Nigeria’s size and is rated lower by Fitch -- since mid-August. When that last happened in March, S&P downgraded Nigeria and Fitch followed days later by lowering its outlook from stable.

“Fitch is the one people will be watching most closely,” Alan Cameron, an economist at Exotix Partners LLP in London, said by phone on Sept. 10. “The oil price has been low for a long time and people assume that’s at least a semi-permanent state of affairs, which will have a very significant impact on fiscal and external projections. It is difficult to argue that Nigeria should not be downgraded at this point.”
Central Bank of Nigeria Governor Godwin Emefiele has introduced several foreign-exchange restrictions since December to prevent dollars fleeing the economy amid an almost 60 percent drop over the past year in the price of oil, which accounts for 90 percent of exports and two-thirds of government revenue.
Record Low
Emefiele resorted to the measures as the naira weakened 20 percent to a record of 206.32 per dollar in the year through Feb. 12. While the restrictions helped to stabilize the currency at an average of 198.98 since its all-time low, foreign-exchange trading has dried up, contributing to JPMorgan’s decision to remove Nigeria’s bonds from its benchmark indexes.
“To lose the index status is a classic own goal,” Kevin Daly, a money manager at Aberdeen, who sold all his Nigerian sovereign debt last year, said by phone from London on Sept. 10. “They were trying to convince investors that they should remain in. The problem was that by squeezing the FX market and not allowing any locals to trade it, they just pushed investors to the sidelines. That forced JPMorgan’s hand.”

Fitch could lower Nigeria to B+, while S&P will wait to see Buhari’s cabinet and what economic policies he introduces, said Daly, who prefers Angolan and Gabon dollar securities because of their higher spreads. Buhari has pledged to name his ministers by the end of September. Calls to Femi Adesina, the president’s spokesman, and Ibrahim Mu’azu, a spokesman for the Abuja-based central bank, weren’t answered.
Yields on Nigeria’s $500 million of bonds due July 2023 rose 1 basis point to 8.03 percent as of 10:19 a.m. in London on Monday, having climbing to a record high of 8.54 percent on Aug. 24. Rates on Kenya’s $2 billion of debt maturing in June 2024 fell 2 basis points to 7.52 percent. An index of Nigerian dollar notes has lost 5.8 percent this quarter, compared with an average drop of 0.5 percent among 59 emerging markets tracked by Bloomberg.
Average naira-denominated government bond yields rose 7 basis points to 16 percent last week, the highest among 31 emerging markets tracked by Bloomberg.

“It’s markets are basically frozen domestically,” said Ashmore’s Dehn, who prefers Eurobonds issued by Ivory Coast and Kenya because their economies are better managed. “Monetary policy and access to the Nigerian market is being managed in a way that’s incomprehensible to investors. The Buhari administration has shown a remarkable lack of urgency. At a time of negative oil shocks, it is not confidence inspiring.”

http://www.bloomberg.com/news/articles/2015-09-14/rattled-by-jpmorgan-exit-nigerian-bonds-now-face-downgrade-risk

Cc. musicwriter, 4play, hinwazaka, kaboninc

Kenai:
- [size=13pt]"Losing index status is classic own goal," [/size] says Aberdeen

- Ashmore dumps debt as Africa's biggest economy deteriorates.

- Nigerian currency could face devaluation.



by Paul Wallace Emele Onu

As if being kicked out of one of the world’s biggest emerging-market bond indexes isn’t enough, Nigeria now faces the risk of its credit rating falling further into junk.
Standard & Poor’s, which rates Africa’s largest oil producer four levels below investment grade at B+ with a stable outlook, releases a review of its assessment on Sept. 18. A week later, it’s the turn of Fitch Ratings, which has Nigeria at BB-, one level above S&P, with a negative outlook.
Those decisions come on the heels of JPMorgan Chase & Co.’s announcement last week that Nigerian debt will be removed from its local-currency emerging-market indexes, tracked by more than $200 billion of funds. Adding to a loss of favor among investors is a delay by President Muhammadu Buhari in naming his cabinet since taking power in May as the continent’s biggest economy grapples to cope with oil prices below $50 a barrel and speculation that the currency will be devalued.

“There’s a very high risk of a downgrade,” Jan Dehn, head of research at Ashmore Group Plc, which sold all of its Nigerian Eurobonds and naira debt over the past year, said. “At the moment, I’m pretty far away from even considering buying anything Nigeria. It’s a deteriorating credit.”
The bond market is siding with Ashmore and Aberdeen Asset Management Plc, which also predicts a ratings cut. Yields on Nigerian dollar bonds have been trading higher than those of Kenya -- which has an economy almost a tenth of Nigeria’s size and is rated lower by Fitch -- since mid-August. When that last happened in March, S&P downgraded Nigeria and Fitch followed days later by lowering its outlook from stable.

“Fitch is the one people will be watching most closely,” Alan Cameron, an economist at Exotix Partners LLP in London, said by phone on Sept. 10. “The oil price has been low for a long time and people assume that’s at least a semi-permanent state of affairs, which will have a very significant impact on fiscal and external projections. It is difficult to argue that Nigeria should not be downgraded at this point.”
Central Bank of Nigeria Governor Godwin Emefiele has introduced several foreign-exchange restrictions since December to prevent dollars fleeing the economy amid an almost 60 percent drop over the past year in the price of oil, which accounts for 90 percent of exports and two-thirds of government revenue.
Record Low
Emefiele resorted to the measures as the naira weakened 20 percent to a record of 206.32 per dollar in the year through Feb. 12. While the restrictions helped to stabilize the currency at an average of 198.98 since its all-time low, foreign-exchange trading has dried up, contributing to JPMorgan’s decision to remove Nigeria’s bonds from its benchmark indexes.
“To lose the index status is a classic own goal,” Kevin Daly, a money manager at Aberdeen, who sold all his Nigerian sovereign debt last year, said by phone from London on Sept. 10. “They were trying to convince investors that they should remain in. The problem was that by squeezing the FX market and not allowing any locals to trade it, they just pushed investors to the sidelines. That forced JPMorgan’s hand.”

Fitch could lower Nigeria to B+, while S&P will wait to see Buhari’s cabinet and what economic policies he introduces, said Daly, who prefers Angolan and Gabon dollar securities because of their higher spreads. Buhari has pledged to name his ministers by the end of September. Calls to Femi Adesina, the president’s spokesman, and Ibrahim Mu’azu, a spokesman for the Abuja-based central bank, weren’t answered.
Yields on Nigeria’s $500 million of bonds due July 2023 rose 1 basis point to 8.03 percent as of 10:19 a.m. in London on Monday, having climbing to a record high of 8.54 percent on Aug. 24. Rates on Kenya’s $2 billion of debt maturing in June 2024 fell 2 basis points to 7.52 percent. An index of Nigerian dollar notes has lost 5.8 percent this quarter, compared with an average drop of 0.5 percent among 59 emerging markets tracked by Bloomberg.
Average naira-denominated government bond yields rose 7 basis points to 16 percent last week, the highest among 31 emerging markets tracked by Bloomberg.

“It’s markets are basically frozen domestically,” said Ashmore’s Dehn, who prefers Eurobonds issued by Ivory Coast and Kenya because their economies are better managed. “Monetary policy and access to the Nigerian market is being managed in a way that’s incomprehensible to investors. The Buhari administration has shown a remarkable lack of urgency. At a time of negative oil shocks, it is not confidence inspiring.”

http://www.bloomberg.com/news/articles/2015-09-14/rattled-by-jpmorgan-exit-nigerian-bonds-now-face-downgrade-risk

Seriously PMB needs an economic team like crazy!and what I can see is a pat utomi( he core specialty is labor,productivity).PMB needs a financial analysts and an economists.

baralatie:


Seriously PMB needs an economic team like crazy!and what I can see is a pat utomi( he core specialty is labor,productivity).PMB needs a financial analysts and an economists.

I pray to God, Buhari and his mad men don't appoint Utomi. That's going from frying pan to fire. You need someone that inspires confidence outside Nigeria. I'm sorry Utomi does not.

Kenai:
- [size=13pt]"Losing index status is classic own goal," [/size] says Aberdeen

- Ashmore dumps debt as Africa's biggest economy deteriorates.

- Nigerian currency could face devaluation.



by Paul Wallace Emele Onu

As if being kicked out of one of the world’s biggest emerging-market bond indexes isn’t enough, Nigeria now faces the risk of its credit rating falling further into junk.
Standard & Poor’s, which rates Africa’s largest oil producer four levels below investment grade at B+ with a stable outlook, releases a review of its assessment on Sept. 18. A week later, it’s the turn of Fitch Ratings, which has Nigeria at BB-, one level above S&P, with a negative outlook.
Those decisions come on the heels of JPMorgan Chase & Co.’s announcement last week that Nigerian debt will be removed from its local-currency emerging-market indexes, tracked by more than $200 billion of funds. Adding to a loss of favor among investors is a delay by President Muhammadu Buhari in naming his cabinet since taking power in May as the continent’s biggest economy grapples to cope with oil prices below $50 a barrel and speculation that the currency will be devalued.

“There’s a very high risk of a downgrade,” Jan Dehn, head of research at Ashmore Group Plc, which sold all of its Nigerian Eurobonds and naira debt over the past year, said. “At the moment, I’m pretty far away from even considering buying anything Nigeria. It’s a deteriorating credit.”
The bond market is siding with Ashmore and Aberdeen Asset Management Plc, which also predicts a ratings cut. Yields on Nigerian dollar bonds have been trading higher than those of Kenya -- which has an economy almost a tenth of Nigeria’s size and is rated lower by Fitch -- since mid-August. When that last happened in March, S&P downgraded Nigeria and Fitch followed days later by lowering its outlook from stable.

“Fitch is the one people will be watching most closely,” Alan Cameron, an economist at Exotix Partners LLP in London, said by phone on Sept. 10. “The oil price has been low for a long time and people assume that’s at least a semi-permanent state of affairs, which will have a very significant impact on fiscal and external projections. It is difficult to argue that Nigeria should not be downgraded at this point.”
Central Bank of Nigeria Governor Godwin Emefiele has introduced several foreign-exchange restrictions since December to prevent dollars fleeing the economy amid an almost 60 percent drop over the past year in the price of oil, which accounts for 90 percent of exports and two-thirds of government revenue.
Record Low
Emefiele resorted to the measures as the naira weakened 20 percent to a record of 206.32 per dollar in the year through Feb. 12. While the restrictions helped to stabilize the currency at an average of 198.98 since its all-time low, foreign-exchange trading has dried up, contributing to JPMorgan’s decision to remove Nigeria’s bonds from its benchmark indexes.
“To lose the index status is a classic own goal,” Kevin Daly, a money manager at Aberdeen, who sold all his Nigerian sovereign debt last year, said by phone from London on Sept. 10. “They were trying to convince investors that they should remain in. The problem was that by squeezing the FX market and not allowing any locals to trade it, they just pushed investors to the sidelines. That forced JPMorgan’s hand.”

Fitch could lower Nigeria to B+, while S&P will wait to see Buhari’s cabinet and what economic policies he introduces, said Daly, who prefers Angolan and Gabon dollar securities because of their higher spreads. Buhari has pledged to name his ministers by the end of September. Calls to Femi Adesina, the president’s spokesman, and Ibrahim Mu’azu, a spokesman for the Abuja-based central bank, weren’t answered.
Yields on Nigeria’s $500 million of bonds due July 2023 rose 1 basis point to 8.03 percent as of 10:19 a.m. in London on Monday, having climbing to a record high of 8.54 percent on Aug. 24. Rates on Kenya’s $2 billion of debt maturing in June 2024 fell 2 basis points to 7.52 percent. An index of Nigerian dollar notes has lost 5.8 percent this quarter, compared with an average drop of 0.5 percent among 59 emerging markets tracked by Bloomberg.
Average naira-denominated government bond yields rose 7 basis points to 16 percent last week, the highest among 31 emerging markets tracked by Bloomberg.

“It’s markets are basically frozen domestically,” said Ashmore’s Dehn, who prefers Eurobonds issued by Ivory Coast and Kenya because their economies are better managed. “Monetary policy and access to the Nigerian market is being managed in a way that’s incomprehensible to investors. The Buhari administration has shown a remarkable lack of urgency. At a time of negative oil shocks, it is not confidence inspiring.”

http://www.bloomberg.com/news/articles/2015-09-14/rattled-by-jpmorgan-exit-nigerian-bonds-now-face-downgrade-risk

Every where you turn is just depressing news.

Kenai:
Prior to his assumption into office, President-Elect Buhari had told us he was going to hit the ground running.
In the end... he hit the ground shattering.

Lol

atlwireles:



I pray to God Buhari and his mad men don't appoint Utomi. That's going from frying pan to fire. You need someone that inspires confidence outside Nigeria. I'm, sorry Utomi does not.

If obj can see that Pat utomi is not capable of handling the economy in his own time.I don't know who brought him now for this administration.

baralatie:

If obj can see that Pat utomi is not capable of handling the economy in his own time.I don't know who brought him now for this administration.

Whatever they do with him is their own problem, just not as finance minister.

The abokey is on a mission to ruin nigeria

Nigeria's economy going down because of propaganda govt. Unfortunately economy does not recognized propaganda/body language. South Africa must b enjoying this. Sad!

rozayx5:
The abokey is on a mission to ruin nigeria

when Yaweh wants to destroy a Nation, he first of all bless them with a foolish leader,the fall of the Zoo is unstopable.

baralatie:

If obj can see that Pat utomi is not capable of handling the economy in his own time.I don't know who brought him now for this administration.

After all the media appointments and public screening of Amaechi and Fashola as SGF and COS, the President, in the heat of the night, announced his own choice of SGF and COS. The President, later made it unequivocally clear that only those who have wasted their youth with him, will be rewarded with plum appointments. Now, how does Utomi fit into this equation. Don't forget that the SEC chairman is Igbo, likewise the CBN govenor, and the NNPC GMD are both of Igbo extraction, though not from the core states. UTOMI WILL NOT SEE EVEN A PIN IN THIS ADMINISTRATION. Don't be surprised when you see 30 out of the 36ministers coming from the new Einstein/ Tesla/ ford North hegemony.

baralatie:

If obj can see that Pat utomi is not capable of handling the economy in his own time.I don't know who brought him now for this administration.

baralatie:

If obj can see that Pat utomi is not capable of handling the economy in his own time.I don't know who brought him now for this administration.

After all the media appointments and public screening of Amaechi and Fashola as SGF and COS, the President, in the heat of the night, announced his own choice of SGF and COS. The President, later made it unequivocally clear that only those who have wasted their youth with him, will be rewarded with plum appointments. Now, how does Utomi fit into this equation. Don't forget that the SEC chairman is Igbo, likewise the CBN govenor, and the NNPC GMD are both of Igbo extraction, though not from the core states. UTOMI WILL NOT SEE EVEN A PIN IN THIS ADMINISTRATION. Don't be surprised when you see 30 out of the 36ministers coming from the new Einstein/ Tesla/ ford North hegemony.

President Buhari was just suited for Chairmanship of an agency that should've been created by merging ICPC and EFCC.

His expertise and qualities are not encompassing hence should have been streamlined and channeled to his passionate agency against financial crimes and corrupt practices.

Nigeria needs Buhari but I'm not sure if we can reap from his best serving as our President but time will tell.

When Buhari is done with Nigeria, hehehehehehehe, hmmmmmmmm.Zimbabwe will be better than Nigeria.

That's the result of voting a man with nepa bill as certificate.

change!!!!!!!!

Nigeria, you did this to yourselves. You were warned about this man but you simply replied with the chant of change.....this is change alright. From bad to worse.

“They were trying to convince investors that they should remain in. The problem was that by squeezing the FX market and not allowing any locals to trade it, they just pushed investors to the sidelines. That forced JPMorgan’s hand.”

This is what we have been shouting but some people without clue were displaying acute ignorance.

My Recommendation:
Buhari should constitute an Economic team and declare State of Emergency on our Economy. He should ask Emefielle to tender his resignation as CBN Governor and replace him with someone that has deep knowledge of monetary policy. He should appoint a brilliant Finance Minister, Economic Planning Minister, and Trade and Investment Minister. He should avoid the likes of Pat Utomi or any recycled old flop.

They have to pursue pÓlicies that will restore investors confidence. We shall get there if they are sane.


Most implortantly, he should avoid tribalising nor politicising the whole thing.

inteli:
Nigeria's economy going down because of propaganda govt. Unfortunately economy does not recognized propaganda/body language. South Africa must b enjoying this. Sad!

nobody in this continent is enjoying anything, the story is the same all over ,african currencies from north to south ,east to west are taking a beating , its just that its worse in nigeria bcoz of dependance on oil revenue ,more diversified economies are having it easier but still taking a beating.

has any new government in this planet gone this long without appointing a cabinet?
for thhose in the working class, can you relate with how when you get a new job, usually, the first two months plus, you really work hard and always on time and you are even willing to burn the midnight oil at no extra allowance, just so you can make a difference in the business or just impress your employer....
buhari must be the opposite, 100 days passed quietly without achievements, maybe during the end of his term he will gain so pace... when everything else is really bad, but north east would have returned to peace..

Bull.ari has killed NIGERIA. . #PATAPATA