- Senate Backs AMCON on Debt Recovery
The Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Ibrahim, has said that time will soon run out on recalcitrant obligors of the Asset Management Corporation of Nigeria.
He said this was because of the renewed commitment of the Senate to build strategic collaboration with AMCON to develop greater capacity for debt recovery and sustained development in the country.
Members of the Senate committee are in Uyo, the Akwa Ibom State capital, for a three-day retreat to deliberate on the best approaches to be adopted to help the Nigerian economy to recover from recession.
The theme of the retreat is: ‘Economic rebuilding through eligible assets recovery’, with the management of AMCON led by its Managing Director/Chief Executive Officer, Mr. Ahmed Kuru, among other stakeholders, in attendance.
Welcoming participants, Ibrahim stated that the Senate was committed to helping in stabilising the economy, but added that was no how this would be achieved without collaborating with key institutions of government like AMCON, which he argued carried a huge burden on behalf of the government.
Ibrahim said, “This retreat for the Senate Committee on Banking, Insurance and other Financial Institutions is in keeping with our commitment to build strategic collaborations in order to develop greater capacity for sustained development. It is my hope that we will fully achieve the objectives of this retreat, thereby strengthening the relationship between AMCON, this committee and indeed the entire hallowed upper legislative chamber.
“It is my expectation that at the end of the day, this committee will have identified new legislative support frameworks for AMCON, where necessary, as well as more efficient ways to consolidate on already existing support legislation and frameworks so that AMCON can be strategically positioned to optimally perform its uniquely important responsibility of asset recovery and management.”
“AMCON, since its founding, has been a key stabilising and revitalising force in the Nigerian financial system, and requires vital support from the legislature to achieve its statutory objectives.”
Earlier in his remarks, Kuru described AMCON as a child of necessity in the development of Nigeria’s financial system and needed the support of other critical stakeholders to cover significant ground in its debt recovery mandate.
Similarly, the Senate Committee on Privatisation has promised to assist electricity distribution companies and other relevant organisations in the sector to ensure that Nigerians enjoy regular power supply.
The Chairman of the committee, Senator Ben Murray-Bruce, who made the promise when he led other members of the committee on a fact-finding mission to the Port Harcourt Electricity Distribution Company on Thursday, said the committee was in the Rivers State capital to see how it could help in solving the problems of the PHED.
Murray-Bruce, who spoke after a closed-door meeting with the PHED management, explained that the committee would work with the Ministry of Power and the four states that the firm was covering to ensure that the problem of energy theft, ageing cables and low return on investments were resolved.
He stated, “The privatisation committee in the Senate is on a fact-finding mission across the country to look at industries that have been privatised in the last 10 years, particularly the power sector, to find out what problems they have and how we can assist in solving the problems.”
“The PHED has listed their problems, which include low tariff that is too low to get return on investment, energy theft, ageing cables, etc. But we understand the consumers’ plight because if you don’t have light, but you are expected to pay three times of what you used to pay before, of course it agitates. So, we are not here to blame anybody, but to find a peaceful way to resolve the problems.
“We are going to study the problems and find solutions to them. We are going to work with the Minister of Power and the four state governments in the region.”
Murray-Bruce called on the electricity distribution companies to be transparent in their dealings with the Federal Government, which still has 40 per cent stake in the firms.
He said, “On the issue of transparency, the Discos need to be transparent. If they are collecting N10 and say they are collecting N5, that’s a fraud. They have to be audited to ensure credibility.
“But if they commit fraud, they lose their status. The government will take out their business. Anyway, those are allegations, but I don’t think anybody will invest billions of naira and then turn around to do such.”
In his remark, the Managing Director of 4Power Consortium Limited, owners of the PHED, Mr. Matthew Edevbie, called on the Federal Government to address the problem of scarcity of foreign exchange.
He observed that while the cost of production was increasing for the Discos, they could not increase electricity tariff.
Edevbie said, “So, we are saying to the government that this issue of foreign exchange has to be stable for us because our income is not variable. You can imagine that a bottle of beer, which was previously N200, is now N350.
“As the prices of raw materials increase, the producers are also increasing their prices. But in my own case, our cost of production is increasing, but we cannot increase the tariff, because if we do, there is going to be a problem. So, who should take that loss? The government should please stabilise the foreign exchange rate.”
Gold Prices Rise as Soft Dollar Supports Safe-haven Appeal
Gold prices firmed on Monday, propped up by a subdued dollar and slight retreat in the U.S. Treasury yields, with investors gearing up for a week of speeches from U.S. Federal Reserve policymakers for cues on the central bank’s rate hike path.
Spot gold was up 0.5% at $1,759.06 per ounce, as of 0400 GMT, while U.S. gold futures were up 0.4% at $1,759.00.
While the dollar index softened, the benchmark 10-year Treasury yields eased after hitting their highest since early-July. A weaker dollar offered support to gold prices, making bullion cheaper for holders of other currencies.
“Gold is still looking slightly precarious where it is right now, and it’s probably bouncing off key technical level around $1,750,” IG Market analyst Kyle Rodda said.
“Gold remains an yield story and that yield story is very much tied back to the tapering story.”
A slew of Fed officials are due to speak this week including Chairman Jerome Powell, who will testify this week before Congress on the central bank’s policy response to the pandemic.
“There’ll be a lot of questions being put to Fed speakers about what the dot plots implied last week and weather there is higher risk of heightened inflation going forward and that rate hikes could be coming in the first half of 2022,” Rodda added.
A pair of Federal Reserve policymakers said on Friday they felt the U.S. economy is already in good enough shape for the central bank to begin to withdraw support for the economy.
Gold is often considered a hedge against higher inflation, but a Fed rate hike would increase the opportunity cost of holding gold, which pays no interest.
Investors also kept a close watch on developments in debt-laden property giant China Evergrande saga as the firm missed a payment on offshore bonds last week, with further payment due this week.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, increased 0.1% to 993.52 tonnes on Friday from 992.65 tonnes in the prior session.
Silver rose 0.9% to $22.61 per ounce.
Platinum climbed 1.3% to $994.91, while palladium gained 0.7% to $1,985.32.
Brent Crude Oil Near $80 Per Barrel Amid Supply Constraints
Oil prices rose for a fifth straight day on Monday with Brent heading for $80 amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions.
Brent crude was up $1.14 or 1.5% at $79.23 a barrel by 0208 GMT, having risen a third consecutive week through Friday. U.S. Oil added $1.11 or 1.5% to $75.09, its highest since July, after rising for a fifth straight week last week.
“Supply tightness continues to draw on inventories across all regions,” ANZ Research said in a note.
Rising gas prices as also helping drive oil higher as the liquid becomes relatively cheaper for power generation, ANZ analysts said in the note.
Caught short by the demand rebound, members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, have had difficulty raising output as under-investment or maintenance delays persist from the pandemic.
China’s first public sale of state oil reserves has barely acted to cap gains as PetroChina and Hengli Petrochemical bought four cargoes totalling about 4.43 million barrels.
India’s oil imports hit a three-month peak in August, rebounding from nearly one-year lows reached in July, as refiners in the second-biggest importer of crude stocked up in anticipation of higher demand.
Oil Holds Near Highest Since 2018 With Global Markets Tightening
Oil held steady near the highest close since 2018, with the global energy crunch set to increase demand for crude as stockpiles fall from the U.S. to China.
Futures in London headed for a third weekly gain. Global onshore crude stocks sank by almost 21 million barrels last week, led by China, according to data analytics firm Kayrros, while U.S. inventories are near a three-year low. The surge in natural gas prices is expected to force some consumers to switch to oil, tightening the market further ahead of the northern hemisphere winter.
China on Friday sold oil to Hengli Petrochemical Co. and a unit of PetroChina Co. in the first auction of crude from its strategic reserves said traders with the knowledge of the matter. Grades sold included Oman, Upper Zakum and Forties.
Oil has rallied recently after a period of Covid-induced demand uncertainty, with some of the world’s largest traders and banks predicting prices may climb further amid the energy crisis. Global crude consumption could rise by an additional 370,000 barrels a day if natural gas costs stay high, according to the Organization of Petroleum Exporting Countries.
“Underpinning the latest bout of price strength is a tightening supply backdrop,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd.
Various underlying oil market gauges are also pointing to a strengthening market. The key spread between Brent futures for December and a year later is near $7, the strongest since 2019. That’s a sign traders are positive about the market outlook.
At the same time, the premium options traders are paying for bearish put options is the smallest since January 2020, another indication that traders are less concerned about a pullback in prices.
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