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ISpiksDaTroof:How is the taxi driving business, your miserable life is still as is., now fuccck off. |
Whynotthetruth:according to the report Nigeria received two warnings, yet, the sai chanters were counting on body luggage. "While many foreign bonds investors have exited the market since JP Morgan warned Nigeria in [b]January and again in June [/b]that it would get kicked out of the index unless conditions improved, stocks investors were now also pondering whether to stay" |
Did subsidy payments drop or the price of crude resulted in lower payments? |
Anders Faergemann, senior sovereign portfolio manager at PineBridge Investments, said he was surprised that Buhari had not started tackling the country's economic problems more than three months into his tenure. "As an investor it is flabbergasting that the Nigerian authorities have allowed themselves to be put in this situation," he said. |
Reading this leaves nothing but sadness. |
[s] kayjasper:[/s] RUBBISH |
WombRaiders: |
JPMorgan Chase & Co.’s decision to exclude Nigeria from its local-currency emerging-market bond indexes tops a year of pain for a nation reeling from a collapse in oil prices, slowing growth and a lack of economic leadership. Nigeria has gone almost full circle from a favored investor destination in Africa three years ago -- because of its status as the continent’s largest crude producer and most populous nation -- to being rebuffed. While most of the weakening sentiment is due to the more than halving in oil prices since last year, a series of missteps by the central bank and President Muhammadu Buhari’s delay in appointing an economic team are adding to the slide. The JPMorgan news is “a clear signal of dampened investor sentiment,” Manji Cheto, vice president of Teneo Intelligence in London, said by phone on Wednesday. “For things to turn around so quickly in three years’ time shows how important it is for governments to recognize that market sentiment is so fickle, and I don’t think the Nigerian government ever really understood this.” Nigerian bonds were added to JPMorgan’s Government Bond Index-Emerging Markets Index, or GBI-EM, in 2012 after the central bank under Lamido Sanusi had scrapped foreign investment restrictions and took measures to control inflation and steady the currency. The inclusion into the bond index boosted sentiment, with foreign portfolio investment flows surging to 1 trillion naira ($5 billion) in 2013 and 1.5 trillion naira in 2014, from 808 billion naira in 2012, overtaking domestic investment in the past two years. Foreigners accounted for 58 percent of portfolio investment transactions last year, up from 15 percent in 2007, according to data from the Nigerian Stock Exchange. On Tuesday, New York-based JPMorgan announced an about-turn after foreign-exchange controls introduced by Sanusi’s successor, Godwin Emefiele, to stem the currency’s slide dried up liquidity. Gareth Brickman, a market analyst at ETM Analytics NA LLC in Stamford, Connecticut estimates that funds tracking the JPMorgan indexes will need to sell more than $3 billion of Nigerian bonds. “There will be a significant capital outflow,” Seun Olanipekun, an analyst at Investment One Financial Services Ltd., said by phone from Lagos, Nigeria’s commercial capital. “The major consequence will be the loss of confidence by offshore investors in our markets. The fact that the Central Bank of Nigeria had time to take action and they failed to do so will negatively impact how the monetary authorities are viewed by the international community.” Nigeria’s growth rate averaged 8 percent between 2000 and last year, when it displaced South Africa as Africa’s largest economy following an overhaul of the data that boosted the size of Nigeria’s gross domestic product. In a study released in July last year, New York-based McKinsey & Co. said Nigeria had the potential to expand about 7.1 percent a year through 2030. That would make it one of the world’s top 20 economies, with a consumer base exceeding the current populations of France and Germany, according to McKinsey. The West African nation’s fortunes have waned along with a slide in the price of crude, which accounts for about 90 percent of exports and two-thirds of government revenue. The economy grew at the slowest pace in at least five years in the second quarter, expanding 2.4 percent from a year ago, compared with 4 percent in the first quarter. Sending ‘Signal’ Even if the direct financial implications from the JPMorgan move are not huge, “the symbolic value of this announcement is high,” Alan Cameron, an economist at Exotix Partners LLP in London, said in an e-mailed note to clients. “Nigeria’s inclusion in the GBI-EM index was generally seen as a big step forward in its integration with global financial markets, opening the market to new investment and raising its profile worldwide. That will now be reversed.” Nigeria’s central bank resorted to restricting trade in the interbank market and using foreign reserves to shore up the currency after it weakened 20 percent to a record low of 206.32 per dollar in the year through Feb. 12. The currency controls have helped to stabilize the naira at an average of 198.98 per dollar since then. It was trading at 198.30 as of 12:46 p.m. in Lagos on Thursday. Buhari, who took power on May 29, has further eroded confidence in Nigeria’s economic management by delaying the announcement of his new cabinet. That’s making Emefiele’s job tougher because he is forced to make monetary policy decisions in the absence of a clear fiscal policy, said Teneo’s Cheto. Buhari, 72, has said he will appoint ministers by the end of the month. “Part of me is secretly hoping that this will send a signal to Abuja to say, we need a cabinet and we need to have a plan that’s clear,” Cheto said. http://www.bloomberg.com/news/articles/2015-09-10/investors-love-affair-with-nigeria-wanes-as-jpmorgan-cuts-bonds |
[s] omenka:[/s] Almajiri when will your suicide bomb explode? |
This man is slowly becoming another noise maker like the CBN gov. Mister, please shut up, and tell Nigerians what is possible not some fairy dream. You cannot update pipelines for crude delivery, yet you are talking of new refineries. ![]() |
I hope the sai chanters are reaping back in good measure now. Most of these unions were supporting Change, please enjoy your change. Na una go suffer pass. ![]() |
Want to see Wike's asset declaration paper work, invoke the FOIA and do the needful. For the Dullard from Duara supporters seeking solace here, remember your almajiri 419 leader made a campaign promise. People called him on that promise, you people don't have a leg to stand on here. |
Madness at every level of this government Ban her and watch her represent another country. ![]() |
Sad, but this's just the beginning of a painfully and steady decline. |
Realdeals:Which foreigners? abi you're speaking of events from the rear view mirrors? I need a tomorrow's road map not a yesterday's story. |
7lives:First rule when you quote me , please do your best to be factual. I hate blind arguments Ethiopia topples Nigeria on foreign investment destination list in Africa - See more at: http://www.vanguardngr.com/2015/06/ethiopia-topples-nigeria-on-foreign-investment-destination-list-in-africa/ |
What It Means For Nigeria To Be Kicked Out Of The JP Morgan EM Bond Index http://nairametrics.com/jp-morgan-index-list-of-possible-implications-when-nigeria-is-evetually-kicked-out 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. |
Abbeyme:This country has passed the stage of imperialist and exploitation arguments. Labour and capital are extremely cheap today, Nigeria will not be attracting neither. Maybe we should ask why? JPM provided outside investors a window into the Nigeria financial market, a mark of credibility, an emblem of trust. Fund managers look to it as barometer for sizing up a country. Nobody is exploiting us but ourselves. Nigeria is a loser for this move today, no going around it. Our loss is Ethiopia, South Africa and Kenya's gain. |
Realdeals:You will be feeling the cold air of the market decline soon enough. Keep pretending. |
Abbeyme:Define genuine interest People invest to make profits , if you cannot deliver a road map for profits, they pack up and move on. |
[s] Alphaoscar:[/s] You people are full of rubbish |
JPMorgan Chase & Co. has excluded Nigeria from its local-currency emerging-market bond indexes tracked by more than $200 billion of funds, after restrictions on foreign-exchange transactions prompted investor concerns about a shortage of liquidity. The first phase of removing Africa’s biggest economy from the Government Bond Index-Emerging Markets, or GBI-EM, will take place at the end this month followed by a full exit by the end of October, the New York-based lender said in a statement sent to Bloomberg on Tuesday by spokesman Patrick Burton. Nigeria’s central bank under Governor Godwin Emefiele introduced several foreign-exchange trading restrictions from December to stem the drop of the naira amid weaker oil prices. The country is Africa’s largest producer of crude, which accounts for about 90 percent of exports and two-thirds of government revenue. JPMorgan placed Nigeria on index watch in January, saying the foreign-exchange measures made it more difficult for foreign investors to replicate the gauges. Currency Reaction The country will “lose a significant chunk of regular portfolio inflows,” Gareth Brickman, a market analyst at ETM Analytics NA LLC in Stamford, Connecticut, said in a e-mailed note on Wednesday, estimating that more than $3 billion of Nigerian bonds will need to be sold. “The pressure will most certainly be back on the bank to allow the official naira rate to be at a lower, more sustainable level. Whether this comes with a more liberalized foreign-exchange regime is now anyone’s guess.” Nigeria will not be eligible for re-entry for at least 12 months from the date of exclusion, JPMorgan said. The country has a 1.5 percent weighting in the biggest GBI-EM index, which is tracked by $183.8 billion of funds, according to the bank. “Investors who track the GBI-EM series continue to face challenges and uncertainty while transacting in the naira due to the lack of a fully functional two-way FX market and limited transparency,” JPMorgan said in the statement. “As a result, Nigeria will be removed.” The naira weakened 20 percent to a record low of 206.32 per dollar in the year through Feb. 12. Extra curbs introduced by Emefiele after that slashed trading in the interbank market and have seen the currency stabilize at an average of 198.93 since the beginning of February. “We would like to strongly disagree with the premise and conclusions upon which the decision rests,” Ibrahim Mu’azu, a spokesman for the Abuja-based central bank, said in a statement on Tuesday. Nigeria has already introduced an order-based, two-way foreign-exchange market to stabilize the naira and limit speculation, according to the statement. “Despite these positive outcomes, JPMorgan would prefer that we remove this rule; even though it is obvious that doing so would lead to an indeterminate depreciation of the naira,” Mu’azu said. Emefiele repeatedly said that Nigeria wanted to remain in the indexes and that there’s enough liquidity in the currency market for foreigners to buy and sell naira bonds. Average yields on those securities rose 11 basis points to 16.04 percent on Sept. 7, the highest among 18 countries included in the GBI-EM indexes, according to data compiled by Bloomberg. ‘Big Blow’ “This will place additional pressure on the currency and even more upward pressure on domestic yields,” Stephen Bailey-Smith, head of Africa strategy at Standard Bank Group Ltd., said by phone from London. JPMorgan included Nigeria in the GBI-EM in October 2012 after Emefiele’s predecessor, Lamido Sanusi, removed a rule that foreign buyers of naira bonds had to hold them for at least a year. Foreign holdings of the country’s local debt surged as a result to a peak of about $11 billion in 2013 before falling to $3 billion today, Samir Gadio, head of Africa strategy at Standard Chartered Plc., said by phone from London. The exclusion hurts Nigeria just as President Muhammadu Buhari, in power since May, prepares to announce his cabinet, according to Ronak Gopaldas, head of country risk at Rand Merchant Bank. Buhari said he would have ministers in place by the end of the month. “The move is a big blow to the country’s prestige and will result in negative market sentiment and capital outflows,” Johannesburg-based Gopaldas said in an e-mailed response to questions. “The performance of the currency, stock market as well as yields on the country’s debt are all expected to be adversely affected.” http://www.bloomberg.com/news/articles/2015-09-08/jpmorgan-to-remove-nigeria-from-emerging-market-bond-indexes |
SenseiX:Nigerians thought issuing orders with immediate effect stimulates economic growth and job creation. It least for once this generation will see the other side. Maybe, just maybe they will all learn something after the dark years ahead. |
Body language is gradually meeting its limitation. |
Lamentations from Sodom, PM should brave itself for more tears. |
AfroKnight:That right there is the problem, seeking value without any productivity. Is not corruption, but an entitlement mentality. |
adconline:You are just too direct, I don't want to hurt people's feelings. Someone needs to tell them the truth in this country. ![]() |
While forgetting that uncertainties surrounding election ignited the initial misgiving back then; while ineptitude, ignorance, and lack of economic leadership nailed the coffin for Nigeria now 
