A Yenagoa-based senior banker, Adewale Adesanya, has been assassinated by armed men in Ahoada area of Rivers State.
Mr Adesanya, 39, who was driving his car to Port Harcourt on Saturday in the company of two others, was shot several times at about 3 PM before he rammed into the bush just by an NNPC filling station near Okobe.
The assassins followed the vehicle into the bush with further gunshots to ensure he never survived.
The names of two other occupants were simply given as Haruna and Samson, both of whom were well known by family and friends of the deceased.
The two young men escaped into the bush when they noticed that the gunmen were coming towards the car as the late banker tried to crawl out with his last strength.
According to statement obtained from Samson, who later resurfaced in Yenagoa, one of the gunmen repeatedly told a member of the gang to ‘finish him up’ and ‘offload’ him.
A team of police officers from the Ahoada-East Area Command later arrived at the scene of the incident to remove the corpse and the car.
Eyewitness accounts say no item was removed from the car apart from his GSM phone which the assassins took away.
The assassins had used the phone to alert his friend who called on the development.
A family source indicated that the late Adewale Adesanya, a banker of almost 10 years, was the account officer to many of the ex-militants on the payroll of the Niger Delta Amnesty Program.
He is believed to have been in a running battle over certain deductions from the amnesty allowance in line with the payment standing order.
The late banker, who hailed from Ijebu-Ode in Ogun State, was a socialite well known in Yenagoa.
He was married with 2 children while his wife is expecting their third child.
A Busy End to the Week
Stock markets are bouncing back on Friday, although I don’t think anyone is getting excited by the moves which pale in comparison to the losses that preceded them.
By Craig Erlam, Senior Market Analyst, UK & EMEA, OANDA
Stock markets are bouncing back on Friday, although I don’t think anyone is getting excited by the moves which pale in comparison to the losses that preceded them.
This looks like nothing more than a dead cat bounce after a steep decline over the last couple of weeks as investors have been forced to once again accept that interest rates are going to rise further and faster than hoped.
Double-digit eurozone inflation
Inflation in the eurozone hit 10% in September ahead of schedule, with markets expecting a jump to 9.7% from 9.1% in August. In normal circumstances that may have triggered a reaction but these are anything but normal. Markets are still pricing in a more than 70% chance of a 75 basis point rate hike from the ECB next month with an outside chance of 1%. The euro is slightly lower following the release which also showed core inflation rising a little higher than expected to 4.8%.
Sterling recovers as the UK is revised out of a potential recession
We’re seeing the third day of gains for the pound which has now recovered the bulk of the losses sustained after the “mini-budget” a week ago. This is not a sign of investors coming around the new Chancellor’s unfunded tax-cutting, but rather a reflection of the work done since to calm the market reaction. That includes the emergency intervention from the BoE, talk of measures to balance the cost of the tax cuts, reported discussions with the OBR and rumoured unrest within the Tory party. We’ll have to see what that amounts to and sterling could certainly react negatively again to inaction or the wrong action.
GDP data this morning brought some good news, although as far as positive updates go, this is surely towards the more insignificant end. The UK is not in recession after the second quarter GDP was revised up from -0.1% to +0.2%. While all positive revisions are welcome, the technical recession wasn’t really significant in the first place. The important thing was that the UK is struggling to grow and facing a probable deeper recession down the road and today’s revision doesn’t change that.
Disappointing Chinese surveys
China’s PMIs highlighted the widening gulf between the performance of state-owned firms versus their private competition. It goes without saying that being backed by the state in uncertain times like this carries certain advantages and that has been evident for some time.
Private firms have been more sensitive to Covid restrictions and have therefore been heavily hampered this year. Still, even with those state-backed benefits, the headline PMI was far from encouraging rising to 50.1 and barely in growth territory. With the non-manufacturing PMI also slipping from 52.6 to 50.6, it’s clear that the economy still faces enormous headwinds and the global economy stalling around it will only add to them.
BoJ ramps up bond purchases amid higher yields
The Bank of Japan ramped up bond purchases overnight as it continues to defend its yield curve control thresholds in volatile market conditions. Rising global yields have forced the central bank to repeatedly purchase JGBs in order to maintain its target. There has been a growing expectation that the BoJ could tweak its 0% target or widen the band it allows fluctuations between in order to ease the pressure on the currency but that’s not been forthcoming, with the MoF instead intervening in the markets for the first time since 1998. The intervention doom loop continues.
RBI rate hike and credit line
The Reserve Bank of India hiked the repo rate by 50bps to 5.9% on Friday, in what will likely be one of its final tightening measures in the fight against inflation. The decision was widely expected and followed shortly after by guidance to state-run refiners to reduce dollar buying in spot markets through the use of a $9 billion credit line. The strength of the dollar is posing a risk to countries around the world, as we’ve seen very clearly in recent weeks as mentioned above, and measures like this will seek to alleviate those pressures. Much more will be needed to make any significant difference though.
Oil edges higher into the weekend
Oil prices are rising again as we head into the weekend, with the focus now on the OPEC+ next week. There’s been plenty of rumours about how the alliance will respond to the deteriorating economic outlook and lower prices. A sizeable cut now looks on the cards, the question is whether it will be large enough to offset the demand destruction caused by the impending economic downturn. Not to mention how any cut would work considering the shortfall in output targets throughout this year.
Brent continues to trade around the March to August lows having traded below here over the last week amid recession fear in the markets. We’re now seeing some resistance around $88, perhaps a sign that traders don’t believe OPEC+ will deliver a large enough cut to make a significant difference.
Encouraging but maybe not sustainable
Gold is making gains for a fourth consecutive day after a difficult start to the week. While the recovery has been encouraging, it’s hard to imagine it building on it in any significant way as that would probably require rate expectations to have peaked and inflation perhaps to have as well. While that may be the case, it’s hard to imagine pressure easing from here which may maintain pressure on the yellow metal for a little longer yet.
Key resistance to the upside lies around $1,680 and $1,700, with $1,620 and $1,600 below being of interest.
A period of stability is what bitcoin needs
It’s been a very choppy week in bitcoin which has failed to make a sustainable run in either direction despite attempts at both. Perhaps we are seeing a floor forming a little shy of the early summer lows around $17,500, although that will very much depend on risk appetite not plummeting once more which it very much has the potential to do. I keep using the word resilience when discussing bitcoin and that has very much remained the case. It did also struggle to build on the rally earlier this week, even hold it into the end of the day, so perhaps a period of stability is what it needs.
Allianz Economic Outlook: African Commodity Exporters in a Better Position
In 2023, the energy crisis and rising interest rates will drag global GDP growth down to just +1.5%, as slow as it was in 2008
In 2023, the energy crisis and rising interest rates will drag global GDP growth down to just +1.5%, as slow as it was in 2008. It’s the latest forecasts provided by Allianz Trade, which operates through the Allianz Global Corporate & Specialty license in South Africa.
Since June, global macroeconomic conditions have considerably worsened. Deep and long-lasting ruptures in energy markets and the negative impact on business confidence will push the manufacturing sector in most countries into recession. At the same time, rapidly rising interest rates and falling real disposable incomes will induce a housing recession in the US.
After contracting by -0.6% in the second quarter of 2022, global growth will return to negative territory in Q4 (-0.1% q/q) and is not likely to recover before mid-2023. Overall, we have cut our 2023 forecast to +1.5% (-1.0pp compared to our Q2 forecasts).
Africa: Commodity exporters in a better position
Commodity exporting countries have a more positive outlook, helped by better terms of trade prospects. GDP forecast for 2023 is as follows: Africa (2.7% from 3.2% in 2022), South Africa (1.5% from 1.8%), Nigeria (unchanged at 2.3%), Ghana (unchanged at 2.5%), and Kenya (4.4% from 4.9%). However, domestic issues are limiting. In South Africa, energy rationing, and logistical bottlenecks – aggravated by flood damage to the port of Durban in April hamper growth while in Nigeria, the oil sector continues to struggle.
Eurozone and US forecast
Eurozone growth is likely to plunge to -0.8% in 2023 due to soaring energy prices and negative confidence effects. Consumer sentiment has already plunged to record lows and business confidence continues to deteriorate rapidly, which will hold back consumption and investment. Increased fiscal support to the tune of 2.5% of GDP on average and limited monetary easing after mid-2023 will help make the recession shorter and shallower, and limit the risks of social unrest.
The US will register a -0.7% fall in GDP, mainly due to rapidly tightening monetary and financial conditions, which will significantly cool the housing market, coupled with a negative external environment and low fiscal support after the mid-term elections.
China’s economic recovery will be difficult
After a very low level of growth in 2022, China’s economic recovery will be difficult. We have significantly cut our growth forecasts to +2.9% in 2022 (from +4.1%) and +4.5% in 2023 (from +5.2%) based on four factors: the short-lived post-omicron reopening boost, the likely continuation of the zero-Covid policy until Q2 2023, which is weighing on business and household confidence, risks in the property sector and extreme weather currently pressuring energy supply. In addition, lower external demand will limit export growth, which had been a tailwind throughout 2020-2021.
Global inflation outlook
Inflation will remain high until Q1 2023 after energy prices have peaked, with food and services adding upside pressure. We expect global inflation to average 5.3% in 2023 (after close to 8% in 2022). Eurozone inflation should peak at 10% in Q4 2022 and then average 5.6% in 2023. In the US, inflation is likely to have peaked already but should remain above 4% until Q1 2023, falling below 2% only after Q3 2023 (averaging 2.9% in 2023).
Inflation outlook in Africa
Inflation is set to continue increasing driven by costlier food and fuel prices with Africa forecast to finish 2022 averaging 14.7% and then 9.6% in 2023, Nigeria (18% and 15%), South Africa (6.8% and 5%), Ghana (31.3% and 20.3%) and Kenya (6.5% and 5.5%). Heightened food security risks in North Africa and many parts of sub-Saharan Africa where the role of agriculture and the tendency to rely on imported food products makes the countries particularly vulnerable to the agricultural shock caused by the geopolitical conflict.
Global trade growth in volume will also remain low at +1.2% in 2023 as advanced economies face a domestic demand-led recession. The return of credit risk is to be expected as this recession will be triaging the good, the bad and the ugly of corporate vulnerabilities. The rebound in business insolvencies gained momentum during 2022 (+18% q/q in Q2 2022, from +5% in Q1). The largest acceleration happened in Western Europe (+26% y/y YTD). Though we are still witnessing historically low numbers of bankruptcies in the US (-19% YTD as of Q2), China (-14% as of August) and Germany (-4% as of June), Spain, the UK and Switzerland already show pre-pandemic insolvency numbers. The trifecta of lower demand, prolonged production constraints (input prices, labor shortages and supply-chain matters) and increasing financing issues (access and costs) is mechanically pushing up expectations in business insolvencies, notably for European countries and sectors most exposed to energy issues. The -0.8% decline in Eurozone GDP has the potential to accelerate the rise in insolvencies by +25pp in 2023 (to more than +40%), with Germany up +16%, France up +29%, Italy up 31% and Spain up 25%. This increases the probability of seeing the extension of and new (targeted) state aid measures.
Evidence that South Africa’s economy is faltering has continued to build. June hard activity data came in well below consensus expectations with retail sales as well as manufacturing and mining production dropping back in m/m terms. We expect the economy to have contracted sharply in Q2 as the hit to output from severe flooding was probably not recouped and as load shedding intensified once again. More timely indicators suggest that activity has remained weak in Q3. Scarce energy availability has continued to weigh on energy-intensive sectors; the manufacturing PM declined from 52.2 in June to a one-year low of 47.6 in July. And successive falls in consumer confidence probably dampened retail sales further with elevated inflation taking its toll. Inflation rose from 7.4% y/y in June to a 13-year-high of 7.8% y/y in July on the back of mounting fuel and food price pressures. Core inflation, at 4.6% y/y, remained close to the midpoint of the 3-6% target band. Uncomfortably high inflation, currency weakness, and Fed tightening will probably keep monetary policymakers in a hawkish mood, even as the economy struggles.
Nigeria’s economy expanded by a better-than-expected 3.5% y/y in Q2, up from 3.1% y/y in Q1. The pick-up in headline growth was largely due to the contraction in the oil sector easing, while growth in the non-oil economy held up well. In seasonally-adjusted terms, GDP rose by around 0.9% q/q. More timely indicators suggest that activity picked up further at the start of Q3. The MI rose from 50.9 in June to 53.2 in July. And private sector credit growth reached 21.3% y/y in July. But production in the key oil sector remained very low, essentially unchanged from June at 1.18mn bpd in July. Meanwhile, the currency weakened against the US dollar, both on the Nafex exchange rate and the black market. Inflation jumped from 18.6% y/y in June to 19.6% y/y in July, the highest since September 2005. The main driver behind the increase in the headline rate was another sharp rise in food inflation, although price pressures rose in other categories too. Elevated inflation is likely to push policymakers to continue raising interest rates.
Uncertainty surrounding elections held earlier in August has continued to linger. The official tally showed a tight victory for William Ruto, but runner-up Raila Odinga challenged the results in the courts, reversing some of the gains in Kenya’s sovereign dollar bonds since the start of the month. Nonetheless, the Supreme Court ruled the election was free and fair and William Ruto was sworn in as President on September 13. Defeated Raila Odinga did not attend the inauguration. Shoring up the economy is likely to be a key priority for the new President. The public debt burden stood at 67% of GDP as of June. And the external position is in a poor state too; in May, the trade deficit was the widest since at least 2000 as imports surged by more than exports grew. Activity probably deteriorated further since; the PMI dropped from 46.8 in June to 46.3 in July. Meanwhile, the currency has continued to weaken (-6% vs. USD as of mid-September). This has contributed to the rise in price pressures; headline inflation increased to a five-year high of 8.3% y/y in July, above the central bank’s inflation target range. After keeping interest rates unchanged in July, the central bank is likely to tighten again before long. We have penciled in a +150bps increase in the benchmark rate, to 9.00%, by year-end.
Ghana entered talks with the IMF in July, but this has failed to soothe investors ‘concerns about the public finances. Sovereign dollar spreads have continued to widen, and the cedi has fallen further – it is now down by 37% against the dollar year-to-date. Given the large amount of sovereign FX debt, the fall in the cedi will only make the job of putting the debt position on a sustainable footing more difficult. Two credit rating agencies lowered Ghana’s long – term foreign currency rating further into junk territory. A sovereign default is by no means imminent given that the FX debt repayment schedule is light over the next couple of years. But an IMF deal, including a firm commitment to fiscal consolidation, will need to be secured soon to soothe investors’ concerns. Meanwhile, the weaker cedi will add fuel to inflation, which came in at a stronger-than-expected 31.7% y/y in July – close to a 19-year high. All of this prompted the central bank to call an emergency meeting and hike interest rates by 300bp, to 22%, this month. Against this backdrop, economic activity is suffering. GDP growth slowed to just 3.3% y/y in Q1 and more timely indicators show that both business and consumer confidence have slumped. The risks to our below-consensus forecast for Ghana’s economy to expand by 3.0% this year lie firmly to the downside.
Fear of Global Recession Weighs on Crude Oil Prices
Global uncertainty concerning recession continued to dictate the price of crude oil and other global commodities
Global uncertainty concerning recession continued to dictate the price of commodities, especially crude oil which has now declined for a second trading session on Monday.
Brent crude oil, against which Nigerian oil is priced, slipped by $1, or 1.2%, to $85.15 a barrel at 11:36 a.m Nigerian time on Tuesday. Brent crude dipped as low as $84.51, the lowest since Jan. 14.
U.S. West Texas Intermediate (WTI) crude shed 87 cents, or 1.1%, to $77.87 a barrel. WTI dropped as low as $77.21, the lowest since Jan. 6.
Brent and WTI slumped by about 5% on Friday.
The dollar index that measures the greenback against a basket of major currencies climbed to a 20-year high on Monday.
A stronger dollar tends to curtail demand for dollar-denominated oil.
Meanwhile, interest rate increases imposed by central banks in numerous oil-consuming countries to fight surging inflation has raised fears of an economic slowdown and accompanying slump in oil demand.
“A backdrop of global monetary policy tightening by the key central banks to quell elevated inflation, and a splendid run-up in the greenback towards more than two-decade highs, has raised concerns about an economic slowdown and is acting as a key headwind for crude prices,” said Sugandha Sachdeva at Religare Broking.
Disruptions in the oil market from the Russia-Ukraine war, with European Union sanctions banning Russian crude set to start in December, has lent some support to prices.
Attention is turning to what the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, will do when they meet on Oct. 5, having agreed at their previous meeting to cut output modestly.
However, OPEC+ is producing well below its targeted output, meaning that a further cut may not have much impact on supply.
Data last week showed OPEC+ missed its target by 3.58 million barrels per day in August, a bigger shortfall than in July.
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