₦airaland Forum

Men of the Nigerian Army have besieged Walter Carrington Crescent in Lagos.

The area which is popular because it houses the American, British, Indian, France, German, Spain, Lebanon and other embassies in Nigeria, is said to be on standstill as soldiers are presently manning the location.



Presently, Ozumba Mbadiwe which is the road leading to the location is experiencing massive traffic. This is because no vehicle is allowed into the street. The Army have not disclosed why they are there, but Nigerians around the area have been speculating in low tone that it’s due to a boko haram threat. Officially, the reason for their action is still unknown.

https://www.naij.com/548016-boko-haram-threat-see-whats-presently-happening-walter-carrington-way-photos.html

The governors finished Nigeria with the lack of savings for a rainy day like this
Chei, JP MORGAN has complicated issues

We all need to tighten our belt for Austerity

The drop in crude oil price is the main culprit

http://businessdayonline.com/2015/09/jp-morgan-judgment-hurts-nigerian-assets-pressures-banks-capital/

JP Morgan’s phased removal of Nigeria from its GBI-EM indices of local currency government bonds for failing its liquidity and transparency tests is already putting pressure on Nigerian assets classes, as well as banks capital adequacy ratio (CAR).

But, the Federal Ministry of Finance (FMF), Central Bank of Nigeria (CBN), and the Debt Management Office (DMO) have jointly responded to the decision saying they strongly disagree with the premise and conclusions upon which the decision rests.

In a statement signed by Ibrahim Mu’azu, director, corporate communications, CBN, the apex bank said: “While we would continue to ensure that there is liquidity and transparency in the market, we would like to note that the market for FGN Bonds remains strong and active, due primarily to the strength and diversity of the domestic investor base.

“For the avoidance of doubt, the Federal Government sees Nigeria and the interest of Nigerians as paramount. It will therefore only continue to take economic decisions that will impact positively in the lives of all Nigerians.”

However, at the equities front, the recent rally halted, as sell pressure robbed equities of N239 billion in value. Likewise, analysts said deposit money banks stand to face mark to market losses, while short-term rates on investment securities is expected to see some upward bias.

Analysts expect to see mark to market losses coming through for banks, particularly those with proportionately higher investments in bonds, given the upward bias in yields.

http://www.reuters.com/article/2015/09/10/us-iran-crude-asia-idUSKCN0RA1CI20150910


This puts Iranian Light OSP at a 15-cent premium to Saudi's Arab Light in the fourth quarter, the lowest quarterly price since the last three months of 2012, according to Reuters data.


In the fight for market share, Iran and fellow members of the Organization of the Petroleum Exporting Countries, including Kuwait and Iraq, have dangled carrots in the form of extended credit and free oil deliveries in addition to outright price cuts to increase their sales.

http://www.punchng.com/business/money/jp-morgan-emefiele-defends-cbn-policiessays-i-dont-know-what-the-issues-are/

The central bank governor, whose protectionist policies and management of the foreign exchange rate has alarmed analysts, said that dollar demand was still being met, although traders say liquidity has dried up.

The country’s ejection from the GBI-EM index late on Tuesday has already triggered outflows from the $2bn of local bonds the index tracks. Nigeria’s bond market regulator imposed a new spread limit on Thursday, reports said. By mid-morning on Thursday, the domestic stock market had slid nearly 3 percent to hit the biggest two-day decline in eight months.

China has been roiling global markets as its leaders try to stop a huge stock bubble from bursting and its economy from stalling

With Brent crude below $45 a barrel, “the last thing Nigeria needed was exclusion” from the index, the Chief Africa Economist at Standard Chartered Bank, Ms. Razia Khan, said.

Nigeria will be ineligible for next re-entry for 12 months. “This could well be the crunch time, because it’s when Nigeria most needs its access to markets, external borrowing, and foreign capital,” Khan added.

Some investors voiced concerns on Thursday that Nigeria could also be removed from the MSCI frontier index. But investors say the bond and equity markets sell-off is of less concern than the underlying reasons JPMorgan removed Nigeria from the index three years after the country’s inclusion boosted confidence in it as an investment destination.

The US bank cited tight capital controls introduced by the Nigerian central bank to prop up the naira as one reason for its decision. The naira officially trades near the central bank pegged rate of 197 to the dollar but on the black market has hit 240 to the dollar in recent months. On Wednesday, the naira firmed slightly to 221 to the dollar.

The protectionist policies of Emefiele and his refusal to devalue the naira again — it has already been devalued twice in the past year — have alarmed observers, as has the lack of action taken by Buhari.

“Nigeria needs to acknowledge that oil prices have fallen and that prices, including the FX, must adjust accordingly, even if it hurts in the short term. This is vastly preferable to entering a heterodox system that creates perverse incentives and results in permanent and ever-worsening distortions,” the Head of Research at Ashmore, an emerging markets-focused asset manager, Jan Dehn, said.

“Where is Buhari? Is he in control of economic policy at all?”

http://www.punchng.com/business/money/jp-morgan-emefiele-defends-cbn-policiessays-i-dont-know-what-the-issues-are/

The central bank governor, whose protectionist policies and management of the foreign exchange rate has alarmed analysts, said that dollar demand was still being met, although traders say liquidity has dried up.

The country’s ejection from the GBI-EM index late on Tuesday has already triggered outflows from the $2bn of local bonds the index tracks. Nigeria’s bond market regulator imposed a new spread limit on Thursday, reports said. By mid-morning on Thursday, the domestic stock market had slid nearly 3 percent to hit the biggest two-day decline in eight months.

China has been roiling global markets as its leaders try to stop a huge stock bubble from bursting and its economy from stalling

With Brent crude below $45 a barrel, “the last thing Nigeria needed was exclusion” from the index, the Chief Africa Economist at Standard Chartered Bank, Ms. Razia Khan, said.

Nigeria will be ineligible for next re-entry for 12 months. “This could well be the crunch time, because it’s when Nigeria most needs its access to markets, external borrowing, and foreign capital,” Khan added.

Some investors voiced concerns on Thursday that Nigeria could also be removed from the MSCI frontier index. But investors say the bond and equity markets sell-off is of less concern than the underlying reasons JPMorgan removed Nigeria from the index three years after the country’s inclusion boosted confidence in it as an investment destination.

The US bank cited tight capital controls introduced by the Nigerian central bank to prop up the naira as one reason for its decision. The naira officially trades near the central bank pegged rate of 197 to the dollar but on the black market has hit 240 to the dollar in recent months. On Wednesday, the naira firmed slightly to 221 to the dollar.

The protectionist policies of Emefiele and his refusal to devalue the naira again — it has already been devalued twice in the past year — have alarmed observers, as has the lack of action taken by Buhari.

“Nigeria needs to acknowledge that oil prices have fallen and that prices, including the FX, must adjust accordingly, even if it hurts in the short term. This is vastly preferable to entering a heterodox system that creates perverse incentives and results in permanent and ever-worsening distortions,” the Head of Research at Ashmore, an emerging markets-focused asset manager, Jan Dehn, said.

“Where is Buhari? Is he in control of economic policy at all?”

The country’s ejection from the GBI-EM index late on Tuesday has already triggered outflows from the $2bn of local bonds the index tracks. Nigeria’s bond market regulator imposed a new spread limit on Thursday, reports said. By mid-morning on Thursday, the domestic stock market had slid nearly 3 percent to hit the biggest two-day decline in eight months.

China has been roiling global markets as its leaders try to stop a huge stock bubble from bursting and its economy from stalling

With Brent crude below $45 a barrel, “the last thing Nigeria needed was exclusion” from the index, the Chief Africa Economist at Standard Chartered Bank, Ms. Razia Khan, said.

Nigeria will be ineligible for next re-entry for 12 months. “This could well be the crunch time, because it’s when Nigeria most needs its access to markets, external borrowing, and foreign capital,” Khan added.

Some investors voiced concerns on Thursday that Nigeria could also be removed from the MSCI frontier index.

But investors say the bond and equity markets sell-off is of less concern than the underlying reasons JPMorgan removed Nigeria from the index three years after the country’s inclusion boosted confidence in it as an investment destination.

The US bank cited tight capital controls introduced by the Nigerian central bank to prop up the naira as one reason for its decision. The naira officially trades near the central bank pegged rate of 197 to the dollar but on the black market has hit 240 to the dollar in recent months. On Wednesday, the naira firmed slightly to 221 to the dollar.

The protectionist policies of Emefiele and his refusal to devalue the naira again — it has already been devalued twice in the past year — have alarmed observers, as has the lack of action taken by Buhari.

“Nigeria needs to acknowledge that oil prices have fallen and that prices, including the FX, must adjust accordingly, even if it hurts in the short term.

This is vastly preferable to entering a heterodox system that creates perverse incentives and results in permanent and ever-worsening distortions,” the Head of Research at Ashmore, an emerging markets-focused asset manager, Jan Dehn, said.

“Where is Buhari? Is he in control of economic policy at all?”

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.


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.

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.

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.”

“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 [b]fact that the Central Bank of Nigeria had time to take action and they failed to do so [/b]will negatively impact how the monetary authorities are viewed by the international community.”


http://www.bloomberg.com/news/articles/2015-09-10/investors-love-affair-with-nigeria-wanes-as-jpmorgan-cuts-bonds

JP Morgan to remove Nigeria from GBI-EM indices of local govt. bonds for failing its liquidity& transparency tests. #FBNCapitalResearch

JP Morgan to remove Nigeria from GBI-EM indices of local govt. bonds for failing its liquidity& transparency tests. #FBNCapitalResearch

3:15PM

OFFICIAL: Its a BEARISH Day! @NSEcontact DOWN by 2.98% to close at 29,454.09bpts, 9Gainers Vs 46Losers, YTD stands at -15.01%

3:15PM OFFICIAL: Its a BEARISH Day! @NSEcontact DOWN by 2.98% to close at 29,454.09bpts, 9Gainers Vs 46Losers, YTD stands at -15.01%

10:57AM BR-E-A-KI-NG! INVESTORS book above N300.00billion loss in just 27mins as Huge Sell activities hit stocks in #EarlyTRADES @NSEcontact

11.00AM #BREAKING Stocks record sharp fall in #EarlyTRADES, @NSEcontact tumbles further by 3.01% as INVESTORS book N314.24bn in just 30mins


11:16 SECTOR-WATCH! #BankingSTOCKS are under intense PRESSURE, no Gainers yet as VOLATILITY hits the sub-sector considerably

11:48AM @ZenithBank down by 4.93% @gtbank dips by 4.98% @UBAGroup tumbles by 4.42% @StanbicIBTC slips by 0.44% as @NSEcontact down by 3.29%


12:07PM OFFICIAL! #Stocks end morning session BEARISH, @NSEcontact[b]DOWN by 3.38%, trading at 29,333.18bpts, 3Gainers Vs 36Losers[/b]

http://www.proshareng.com/

http://www.proshareng.com/news/All/JP-Morgan-delivers-its-judgement-Proshare/28530


Ahead of the addition of Nigeria to its indices in October 2012, JP Morgan suggested that the inclusion would translate into inflows of about US$1.5bn on the assumption that its tracker investors would adjust their holdings to make the new entrant market-weight.

These investors will have exited Nigeria by the end-October, the second and final phase of the process. This would probably leave a maximum of $1bn invested by the offshore community in all naira-denominated Nigerian government paper. FGN domestic debt amounted to N8.40trn (US$42bn) at end-June.

The same flaws in the fx market naturally apply to the offshore equities investor. However, Nigeria has a place (and the second largest weighting) in the benchmark equities index for frontier markets (MSCI), where the terms for eligibility are less taxing than those for JP Morgan’s indices for emerging markets.

This is a demotion for Nigeria and amounts to reputational damage. Since the FGN as well as the CBN are fire-fighting in the face of the global headwinds, we do not expect a dramatic response on their part.

Nigeria is not eligible for re-inclusion in the GBI-EM indices for at least 12 months. We can assume that JP Morgan would not lightly restore Nigeria.

"Nigeria's inclusion in the GBI-EM index was generally seen as a big step forward in its integration into global financial markets, opening the market to new investment and raising its profile worldwide. That will now be reversed," said Alan Cameron, an economist at Exotix.

With Nigeria's removal, countries such as Malaysia, Indonesia and Thailand have increased their weight by more 25 basis points as of Aug. 31, JP Morgan said in the note.

Foreign holdings of Nigerian government bonds stood below $2.75 billion, said Samir Gadio, the head of Africa strategy at Standard Chartered Bank. They had been around $8 billion in September 2014.

"This will initially trigger excess volatility in the market as exiting offshore accounts and onshore investors may push yields higher," Gadio said. "A potential exclusion from the GBI-EM indices would make it more difficult to attract foreign portfolio flows in the future as Nigeria will need to rebuild its market credentials." (Editing by Larry King and Steve Orlofsky)

With this Buhari is failing seriously economically. I hope he has advisers that are counseling him on the significance of this.

This is very damaging to our economy at a time like this. God save us.

http://nairametrics.com/jp-morgan-index-list-of-possible-implications-when-nigeria-is-evetually-kicked-out/


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.

http://nairametrics.com/jp-morgan-index-list-of-possible-implications-when-nigeria-is-evetually-kicked-out/

Harsh times await this country as we have been kicked out of the Bond Index making it difficult to maintain government liquidity due to the capital controls by Emefiele and no Finance Minister to lay a solid fiscal policy. I fear about social unrest.

Pray for Nigeria.

By Chijioke Ohuocha

(Reuters) - JP Morgan will remove Nigeria from its Government Bond Index (GBI-EM) by the end of October, the bank said on Tuesday, after warning the government of Africa's biggest economy that currency controls were making transactions too complicated.

The removal will force funds to sell Nigerian bonds, triggering potentially significant capital outflows and raising borrowing costs for the government.

Struggling with a plunge in vital oil revenue, Nigeria had imposed currency restrictions to defend the naira after the burning of dollar reserves failed to halt a slide.

The JP Morgan index tracks around $210 billion in assets under management.

Some bonds will be removed from the index by the end of September and the rest by the end of October, JP Morgan said.

The bank had warned Nigeria that to stay in the index, it would have to restore liquidity to its currency market in a way that allowed foreign investors tracking the index to conduct transactions with minimal hurdles.

Nigeria became the second African country after South Africa to be listed in JP Morgan's emerging government bond index, in October 2012, after the central bank removed a requirement that foreign investors hold government bonds for a minimum of one year before exiting.

The index added Nigeria's 2014, 2019, 2022 and 2024 bonds, giving Africa's biggest economy a weight of 1.8 percent in the index.

"Foreign 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," the bank said in a note.

The central bank had to devalue the naira and pegged it at a fixed rate against the dollar, turning trading into a one-way quote currency market whose lack of transparency upset investors and businesses.

The index provider said Nigeria would not be eligible for re-inclusion in the index for a minimum of 12 months. To get back in, it would have to establish a consistent record of satisfying the index inclusion criteria, such as a liquid currency market.

Nigeria's Finance Ministry, central bank and Debt Management Office said in a statement they "strongly" disagreed with the index expulsion, saying that market liquidity was improving.

http://mobile.reuters.com/article/idUSL5N11E3Y320150908

When you have “King” in your title, and a net worth of around $20 billion, you can roll around like a baller whenever, and wherever you like. It also doesn’t hurt to control vast oil fields that supply much of the rest of the world with the life-blood that sustains their economies.


For this Labor Day weekend, Saudi Arabia’s King Salman has come to the US to meet the President, and in doing so has already shown up the entire world on how to burn cash as if it was going out of style.

Not only did the King rent out the entire Georgetown Four Seasons hotel and covered every interior surface in gold, but also increased his original 10-car motorcade to 410 cars total. That’s right, the Saudi King hired an addition 400-cars to help move him and his entourage around the nation’s capital.


And it wasn’t just a few Uber drivers as well. The 410-car motorcade only consists entirely of brand new black, Mercedes S-Class’s. That’s right, 410-black Mercedes S-Class’s. The picture seems fake when you first look at it, but according to USAToday, the 410-strong motorcade was so large, that the King’s staff had to keep the entire line of cars at Joint Base Andrews.

Wouldn’t it be nice to ball this hard!!

The US government has confirmed that cannabis can kill cancer cells after the drug did so in tests on mice and rats, according to the National Cancer Institute.

The development will provide further ammunition for pro-legalisation campaigners.

On its website The National Cancer Institute, part of the US department of health, said: "Laboratory and animal studies have shown that cannabinoids (the active ingredient in cannabis) may be able to kill cancer cells while protecting normal cells.

"They may inhibit tumour growth by causing cell death, blocking cell growth, and blocking the development of blood vessels needed by tumours to grow."

The studies in rodents show that cannabinoids may reduce the risk of colon, liver and breast cancer, and could make chemotherapy more effective.

But researchers added: "At this time, there is not enough evidence to recommend that patients inhale or ingest cannabis as a treatment for cancer-related symptoms or side effects of cancer therapy."

In many US states where cannabis is already legal for medicinal use, cancer patients have long been using the drug to ease pain.
The Cancer Research charity reacted cautiously, saying there was no evidence of a similar effect in humans.


http://www.telegraph.co.uk/news/worldnews/northamerica/usa/11820620/US-government-says-cannabis-kills-cancer-cells.html

.

http://www.independent.co.uk/news/world/americas/cell-phone-video-shows-texas-police-fatally-shooting-man-who-held-his-arms-in-the-air-10481710.html

Newly obtained video footage shows two Texas police officers fatally shooting 41-year-old Gilbert Flores, who was holding his arms up in the air.

Bexar County Sheriff’s Deputies Greg Vasquez and Robert Sanchez killed the suspect after responding to a domestic disturbance call on Friday. Police said that an 18-month-old baby was injured and a woman had a cut on her forehead.


ABC affiliate KSAT-12 released graphic footage of the shooting taken by Michael Thomas, a motorist who witnessed the shooting in passing.


Kenneth Williams, a professor at South Texas College of Law, told the New York Times that it “appears that the victim had his hands in the air at the time that he was shot.”

say NO to Police brutality. We need community policing!!!

Can't something be done about police brutality.

They told them to wear body cameras in America and they refused for clear reasons that it will check their misconduct.

Cell phone video obtained by a local news station appears to show the moment two Texas deputies gunned down a man who held his hands up, contradicting police’s version of events.