₦airaland Forum

Plunged only at parallel market but appreciated at over-the-counter futures market and also at non deliverable forward.

@Adesiji77 You know we will actually gain more from Brexit? People that are saying it will trigger referendum across the world has not read Article 50 of the Lisbon Treaty. It will have effect because it weigh upon global growth, but how is that different from August 11, 2015 China devaluation?

Understanding Bank of England Mark Carney Statement

Here is the statement from Governor of the Bank of England, Mark Carney, after United Kingdom exit from the European Union.

http://investorsking.com/understanding-bank-of-england-mark-carney-statement/

multikolour:
brexit is the best decision taken by UK citizens, they now have right to take decision and formulate laws that favour them and we can see them becoming strong and tough like USA and RUSSIA

Oga why nah? They will not only suffer, they will pay big time for this decision. Don't ask my why, I covered the whole brexit and still on it now. It was a big surprise to all analysts considering Tata Steel alone created over 40,000 jobs in the UK. Do you even know the meaning of free trade ? or do you realize EU 19-nation is the biggest economy in the world, follow by US and China? To leave such union and start to fend for yourself, when all your sectors are currently down and on-going QE seems not effective due to uncertainties created this same "people that thinks UK as the old empire". Pound is currently trading at 30-year low.

Nigerian stocks surged for a third straight day on Thursday, reaching their highest since September as local investors jumped on it following the abandonment of Naira’s fix rate on Monday.

The Nigerian Stock Exchange All Share index rose 3.1 percent to close at 31,071.25, its highest since September 30. The index has gained 8 percent in the past three days, leading 94 major equity indexes tracked by Bloomberg in gains.

“Volumes in the equity market have gone from about $8 million a day last week to more than $20 million,” Chris Becker, an analyst at Investec, said by phone from Johannesburg. “It’s a big increase, but it’s not all new foreign money coming in. A lot of the rally is down to local money being switched from the bond market to stocks.”

Yields on Naira government bonds have risen 40 basis points since the Central Bank of Nigeria floated the local currency, making it the second highest among 34 emerging markets.

However, the Naira dropped 0.5 percent to 284 against the US dollar as of 2:22 p.m. in Lagos, Nigeria. A situation currency analysts have attributed to low volume of trade in the foreign exchange market.

“So far, the new FX market has disappointed because there’s still very little liquidity, indicating that the exchange rate is not at a market-clearing level yet,” Becker said. “Other than the CBN, not many others are supplying dollars at these levels, suggesting the currency needs to weaken further. We think it’ll fall to around 300 over the next 12 months, but initially probably needs to weaken more than that.”

According to Mickael Avou Ahonzo, head of currency trading at Ecobank Transnational Inc., the liquidity is the problem, “foreign investors want to take positions, but the uncertainty of Naira stability due to low liquidity is holding them back, he said “its less about the level of the Naira than its stability and liquidity”.

“There’s enough liquidity for small trades, but not really for big transactions,” he added.

http://investorsking.com/nigerian-stocks-gain-most-in-the-world-even-as-liquidity-remain-low/

Aristo3146:
With our depleted foreign reserve...I think it will do us more harm than good...anyway...I blame people that has been putting undue pressure on govt to change her foreign exchange regime...

How do you mean? Without flexible forex policy the economy will be in recession this second quarter, without options to halt inflation and ease unemployment rate.

But now, we will attract FDI in the long-run and businesses that are closing up or left will stay. Non-oil exporters are allowed unrestrained access to their FX proceeds to further aid supplies.

It will work if well managed

The Nigerian Naira gained against the US dollar in the new interbank market on Wednesday after the Central Bank of Nigeria sold dollar to stabilize the market.

The Naira closed at N282.80 a dollar from 284.5 recorded on Tuesday.

Since the apex bank abandoned its 16-month fix rate on Monday, the central bank has sold about $4.1bn in both spot and forward markets to clear the backlog of demand for forex and modulate prices.

“The market expects the central bank to continue to intervene on a daily basis for now as it is easily the only source of dollar supplies,” said Mr. Sewa Wusu, the Head of Research at SCM Capital Limited.

“Foreign direct investment and portfolio flows are yet to start flowing in as investors wait on the sidelines to watch for liquidity, price discovery and stability,” he added.

Forward contracts dropped as traders reduced their bets against the Naira, although some still see it falling about 6.5 percent by September, it is yet uncertain if they are willing to take the risk with the current improvement.

The Naira three month non-deliverable forward contracts dropped 4.7 percent to 302.25 per dollar, the most on a closing basis since May 17. While, yearly contracts declined 3.7 percent to 340 per dollar.

“The monetary authority will be a regular participant in the interbank market, at least in the short term, to ensure that sufficient liquidity is available to facilitate two-way trade,” analysts at Johannesburg-based Rand Merchant Bank, including Celeste Fauconnier and Nema Ramkhelawan-Bhana, said in a note to clients.

http://investorsking.com/naira-rises-to-282-as-cbn-boosts-dollar-supply/

The Nigerian stock market rebounded on Tuesday as investors' confidence in the market grew, after plunging N163 billion ($574 million) on Monday.

The Nigerian Stock Exchange market rose N224 billion ($789 million), following the implementation of a new flexible foreign exchange policy, with about 37 stocks making the gainer’s chart.

While analysts and investors have lauded the adoption of the new forex policy as the right move to avert a potential recession and ease economic gridlock created by the previous forex policy, few like Fitch Ratings Inc., have voiced their concerns regarding its implementation and control going forward.

“Establishing the new framework’s credibility will be key to its effectiveness in attracting portfolio flows and FDI to make up for lower oil export receipts,” said Fitch Ratings.

The GSK shares led gainers’ chart, rising 10.20 percent to close at N16.53, while Champion Breweries advanced 9.19 percent to N4.04.

Access Bank share rose 5.17 percent to N6.10, and NAHCO appreciated 4.98 percent to close at N4.22.

A total of 10 stocks plunged in value, top five losers are Trans-national Express Plc, NEN Insurance Company Nigeria Plc, Unity Bank Plc, Caverton Offshore Support GRP Plc and Honeywell Flour Mill Plc.

The Nigerian Stock Exchange All Share Index rallied 2.3 percent to 29,425.40 from 28,725.53. It’s highest since December 2015. The gauge pared its losses this year to 7.3 percent.

The Nigerian Naira gained against the US dollar to close at 284 a US dollar.

http://investorsking.com/nigerian-stock-market-rebounds-as-investors-confidence-grows/

ANBAKO:
Hmmm!! I was thinking this is about Nigeria but I was surprised to see it is about "cameramen"

This days, everyone with a mobile phone is a cameraman.
Prof, this is 2016 and not 1976, live with it!!!
The celebrant isn't complaining why you?
I think Prof is seeking media attention but it did not get it.

Next time, it shall be well!!!

Do good for good to come your way.

His response to you "it must also be stressed - that same society is the prime facilitator of its doom. There are times when tolerance becomes acceptance, then tacit and even overt encouragement."

tulipsmadra:
If only we are truly giant of Africa as we calm with a stable economy all these won't have been necessary.

Even for US it is necessary.

sKeetz:
I need advise, I am looking to study either in Malaysia or Cyprus for my undergraduate, which is a better option for me ?

Malaysia is cost-effective compared to Cyprus, but at the end of the day your decision depend on your circumstance.

tulipsmadra:
IMF should leave us alone, why are they monitoring like we are their financial lab rats. We want investors not commentators.

Their comments will boost investors' confidence, especially from credit rating bodies, which in turn will translate to more FDI and of course capital importation.

Nigeria’s planned shift to a more flexible foreign-exchange regime could aid the sovereign’s adjustment to lower oil prices and support growth, although implementation may present challenges, Fitch Ratings says.

Establishing the new framework’s credibility will be key to its effectiveness in attracting portfolio flows and FDI to make up for lower oil export receipts. The Central Bank of Nigeria (CBN) on Thursday issued revised guidelines for a single, “market-driven” inter-bank FX market, open to authorised dealers and other entities.

The central bank first indicated that it planned to move to a more flexible exchange rate at its most recent Monetary Policy Committee meeting in May. The CBN’s previous policy of restricting access to the official FX market and supporting the naira, rather than risk the inflationary impact of devaluation, has been negative for Nigeria’s sovereign credit profile.

Defending the naira has lowered reserves and increased external vulnerabilities, while a shortage of hard currency has weighed on the non-oil economy. The change of policy is consistent with our view that the CBN would struggle to defend the naira indefinitely. But a backlog of unmet dollar demand (estimates range from USD4bn to USD9bn) has built up and any inability to clear a significant portion of that backlog early in the transition would hinder the effectiveness of the new framework.

The CBN will introduce a new non-deliverable forward to try to limit exchange-rate volatility under the new system, by moving some of the dollar demand to the futures market and away from the spot market. Even so, the CBN will probably have to deploy a large portion of its international reserves during the first week(s) of implementation. It also reserves the right to intervene by buying and selling FX to smooth market movements, although it has made no specific announcements about trading bands or break points that might lead to intervention.

Nigeria’s unorthodox FX policy has made raising external financing more difficult. Allowing the market to determine the value of the naira could ease this, although we think much potential FDI may remain on the sidelines until a clearer picture emerges of how the new system is functioning. Foreign investment in the domestic bond market is very low and not likely to increase in the near term.

High demand for FX after a devaluation may also limit the benefit to the current account from recovering oil prices. An increase in FX liquidity would support a potential recovery in growth in 2H16. Nigeria’s GDP contracted 0.36% yoy in the first three months of this year, and we think this contraction has probably continued in 2Q16 due to hard currency shortages, and unrest in the Niger Delta lowering oil production.

Naira devaluation could lead to a further spike in CPI inflation, which rose to a six-year high of 15.6% in May. But we think the inflation pass-through from the official rate is limited and a fall in the parallel rate would be deflationary, which along with the increasing availability of hard currency could lower inflation.

We will assess the implications of Nigeria’s new exchange rate policy on its economy and external finances as part of our next review of the country’s ‘BB-‘/Negative sovereign rating.

Our base case for Nigerian banks is that regulatory total capital ratios will not decline significantly under the new regime. Any impact will be offset by still strong profitability and high levels of internal capital generation. The new FX regime crucially also provides access to US dollars for the banks to meet their internal and external obligations.

http://investorsking.com/fitch-nigeria-fx-move-could-lift-growth-but-implementation-key/

Its actually a very good move, lets hope it will be well implemented. But from the guidelines, CBN impressed me for the first time.

The Central Bank of Nigeria has been hailed by analysts for abandoning its Naira peg rate for a more flexible exchange rate, after previous refuting the decision even as its external reserves plunged and inflation surged to a six-year high.

Here are the key aspects of the new forex guidelines.

CBN will participate in the market through periodic interventions to either buy or sell forex.

The central bank periodic interventions, would allow the CBN to regulate possible market imbalances, either to prop up Naira against the US dollar or to lower the Naira to stimulate the economy through exports. This will also allow the central bank to manage the activities of Forex Primary Dealers (FXPD), since there is no predetermined spread between the CBN and FXPD, which means spread can also be adjusted to accommodate the current market situation.

CBN to introduce non-deliverable over-the-counter naira-settled futures.

The introduction of non-deliverable forward, perhaps is the most unique of all the guidelines, one because it will help curtail the loophole created in the previous forex policy that allow speculators determine the exchange rate at the parallel market, and also encourage businesses and investors to hedge against eventualities. Hence, eliminate hoarding due to fear of uncertainties.

What this means is that, if you need forex transaction in December, you can peg your foreign exchange rate at let’s say N250 and if in December exchange rate is N270, the central bank will offset the N20 gap, such that you are not losing any money.

“But if the rate on that day is lower than the deal date rate, you’ll pay the Naira equivalent.”

Again, it will encourage capital importation from foreign investors, since they can now hedge against a further plunge in oil prices and at the same time buy forex at a predetermined rate to remit proceeds.

Non-oil exporters now allowed unfettered access to their FX proceeds.

Another bold move, is allowing non-oil exporters unbridled access to their FX proceeds, this initiative has officially brought back diversification agenda to the table and indicate the readiness of the government to tackle Nigeria’s mono-crude oil status. Especially, knowing that non-oil sector contributed 89.71 percent to the first quarter GDP, after falling 5.77 percent, the highest in years.

However, this does not mean gauge of consumer prices (inflation) will drop from the current 15.6 percent, if any changes it might surge to 16 percent in the second quarter pending the time the current policy would have filtered through key industries.

Overall, the flexible exchange rate will once again position Nigeria as an investment destination, boost job creation, enhance importation, increase consumer confidence and modulate consumer prices in the long run if well implemented.

http://investorsking.com/understanding-key-aspects-of-cbns-new-forex-guidelines/

chriskosherbal:
The government should do everything possible to reduce the inflation rate.

Lets just hope it will not get worse with the new forex policy due later today.

Nigeria inflation rose to a six-year high in May, following a disappointing data in April as the increase in transport fares and other energy prices continues to drive prices of goods and services high.

The Consumer Price Index, which measures inflation rose from 13.7 percent recorded in April to 15.6 percent in May, the National Bureau of Statistics (NBS) showed on Tuesday. The increase was as a result of the surge in the overall price level across the economy.

The report highlighted the increase in fuel prices as the main cause of the surging prices in the country, with the electricity rates and other energy prices rising 15.1 percent year-on-year in May, up by 1.7 percent from the preceding month.

The highest increases were recorded in the passenger transport by road, kerosene, fuels and lubricants for personal transport equipment and vehicle spare parts.

Early in the week, a report showed that the recent increase in the price of fuel to N145 per litre have prompt users to seek alternative or reduce their usage, a situation that has plunged sales by as much as 40 percent.

“If you may agree with me, there has been a light flow of traffic in the Lagos metropolis in very recent times. We however deem this to be the initial reaction and thus believe that the demand will improve over time,” said Mr. Akin Akinfemiwa, the Chairman of Major Oil Marketers Association of Nigeria (MOMAN) and Group Chief Executive Officer of Forte Oil Plc.

Also, gauge of foods climbed 14.9 percent year-on-year from 13.2 percent in the previous month, increase in importation cost contributed to rise in food prices as the imported food index rose the most, 18.6 percent and 2.2 percent more than what was obtained in April.

Prior to the release, Access Bank’s Economic Intelligence unit, said “Continued weakness in the Naira, following the announcement of the deregulation of the downstream petroleum sector has also placed significant pressure on the inflation rate. This will have filtered into consumer prices as some firms may have sourced scarce foreign exchange from the parallel (black) market to import intermediate goods to maintain operations.”

Rising inflation is expected to plunge investor’s returns further, while bond yields likely to rise to compensate for the inflation.

http://investorsking.com/nigeria-inflation-at-six-year-high-in-may/

This Op lacked business understanding and facts. Kalu had issues with Obasanjo not Dangote, he said it himself.

Nigeria is a corrupt country and the likes of Dangote has managed to stay atop the situation by being the driver of real growth via job creation which automatically boost consumer spending and taxes.

Dangote creates businesses, only few mergers and acquisitions. What would you say about Tony Elumelu that rose to the top via UBA acquisition?

Jimoh Ibrahim have way too many issues with his business management style. Hope you know Dangote recently partnered with the Bank of Industry to set up a N5 billion small and medium scale enterprises fund to grant low interest loans to entrepreneurs and small businesses in Nigeria?

Dangote will continue to thrive until competitors start thinking ahead instead of blaming him, wasn't Dangote thriving during GEJ, the man is a business genius. Imagine his recent proposal to the government, his company proposed to construct Obajana-Kabba road in return for 30 percent of his company’s income tax for some years. Don't forget his new company will handle the construction, which means he will not only be making money on his own tax, but also further is new constructing company, since government don't even have money to pay competitors for the same contract. So is that sabotage? Its simple forward-thinking, why can't any of these construction companies come up with the same idea, don't they pay taxes?

Forex Weekly Outlook June 13 – 17

http://investorsking.com/forex-weekly-outlook-june-13-17/

An anonymous person has paid $3,456,789 to eat lunch with the world’s third richest man, Warren Buffett.

The eBay auction lasted for five days, before the anonymous bidder emerged winner after matching the sum paid by 2012 winner, this is the single most expensive charity item sold on the e-commerce website.

The money will go to a San Francisco charity, Glide, that provides health care, food and other services to homeless, poor or people struggling with substance abuse.

Glide charity provides an estimated 750,000 free meals, 815,000 syringes, day care and after school programs for 450 children each year.

According to Rev. Cecil Williams, a co-founder of Glide, Buffett’s involvement has helped fund its $17 million annual budget and attract more interest in the San Francisco Based charity.

“This one was really one of the best we’ve had in my over 50 years,” Williams, 86, said after the auction.

Buffett, 85, has so far held 17 annual auctions for Glide and raised $23.6 million in total.

The winner is allowed to invite up to seven friends to dine with Buffett at the Smith & Wollensky steak house in Manhattan.

All topics are regarded as fair game, except where Buffett will invest next.

http://investorsking.com/anonymous-bidder-pays-3-46-million-to-dine-with-warren-buffet/

barleeh:
This is the new requirements, thought eligibility letter is for people going for undergraduate

Eligibility letter is for all foreign students.

AntiWailer:
That is better

Instead of them claiming they paid billions of subsidy on Petrol nobody bought.

The right thing is to adjust when the economy calls for it is to sacrifice for the future.

I hope our useless leaders sacrifice too.

Its not better but an okay situation given the circumstances. The issue now is how feasible is it that the government can curtail the activities of NDA? We are currently losing about 600,000 barrels per day.

But by my analysis there is no way we will have 14.7 percent inflation rate in May, from 12.8 percent in April.

Some of these journalists self.

@barleeh edit your passport number

Forex Weekly Outlook

http://investorsking.com/forex-weekly-outlook-june-6-10/

This is a volatile week, its adviceable to have an overview of the market fundamentally.

CFCman:
Skip Bayless and others must have driven the ratings up in order to get such deals.

I think Katie Couric is paid $8 million by Yahoo. At CBS, she was earning $16 million!!

Yea, that deal was one of Marissa Mayer's biggest accomplishments. Hope it materialize before they boot her out.

CFCman:
OMG

And a significant portion of his salary comes from subscription fees. In fact, I once read a report which stated that ESPN is the single most expensive channel by proportion of its share of subscription fees.

Michelle Beadle wasn't content with a $250,000 salary, so she moved to NBC that paid her $750,000. But she is now back with ESPN. I wonder if they gave a better deal than NBC.

ESPN always do that, if you hold value or doing better after you left. They will cut you a better deal, Stephen A. Smith got good deal because he has lot of black followers (subscribers). Imagine he is earning more than Skip Bayless, that have more experience. Until Bayless announce he will be leaving this year, now they want to cut him $5 million deal.

CFCman:
Its only in America that you'll find some sports anchors earn between $600,000 - $800,000 annually.

Charissa Thompson of Fox Sports earns a $600,000 yearly salary.
Rachel Nichols earns $700,000/year at CNN.

The political anchors even earn more. Megyn Kelly (Fox News) reportedly earns a $2 million salary

ESPN Stephen A. Smith earn $2 million a year

This song "When We Were Kings" was composed by Brian McKnight and Diana king for Muhammad Ali in 1997.

Its one of my favourite songs ever.


https://www.youtube.com/watch?v=xtaxdzmoVCk

Thought as much with your first paragraph, but second

I have never heard of real student getting deported @cheeryangy, still get some dollars and have your bank stamp your passport as proof of exchange.

Buying dollar in Nigeria or withdrawing here with your ATM card is almost the same, you may even pay more to your bank withdrawing here.

360 Naira = $1 (Using @cheeryangy rate)

86 Naira = RM 1, while $1 = RM 4.1

360 Naira = $1 = RM 4.1

Using Master Card

86 Naira x 4.1 = 352.6 (Naira excluding ATM charges), and I think you can still get dollar below or around 350

What is PP @ cheeryangy ?

Scash:
Hi, sorry if my questions seems repetitive. I learnt immigration in Nigeria also demand for this BTA. Student or no. I'm thinking about risking it all and just travelling with 1,500myr. Using my ATM and or money gram would be better. But I'm truly scared and wondering what could be the worse case scenario with the Nigerian immigration

Those are just criminals, you don't need to give them anything. Keep your RM safe and show them your ATM card if they demand for money as usual, tell them you couldn't get dollar because of forex scarcity. The BTA is not for them, let them know you are a PhD student.