Connect with us

Business

CBN Plans Dollar auction to Airlines, Importers

Published

on

Arik Airplane
  • CBN Plans Dollar auction to Airlines, Importers

The Central Bank of Nigeria is planning to auction an undisclosed amount of dollars through book building to settle a backlog of demand for airlines, fuel and raw material imports.

Traders said the CBN had asked lenders to bid for hard currency for specific sectors in efforts to improve dollar liquidity, Reuters reported.

It said a cut-off rate at the auction would be applied at the marginal rate and that obligations due on fuel imports must had matured before January 31 to qualify for the intervention.

The CBN has been intervening aggressively since February to try to narrow the spread between the official and black market rates and has sold more than $4bn.

In theory, greater liquidity should lead rates to converge.

The local currency was quoted at 381.71 per dollar at the investor window, according to the market regulator FMDQ OTC Securities Exchange.

It fetched 305.60 in the interbank window and 390 on the black market.

Meanwhile, the naira has appreciated against the United States dollar by 25 per cent on the parallel market in the past 10 weeks, a new report by the Financial Derivatives Company Limited has shown.

The naira fell to 520/dollar on February 20 shortly after which the Central Bank of Nigeria introduced a new foreign exchange policy measure. But the local unit closed at 390/dollar on Tuesday.

The report read in part, “The naira has appreciated by 25 per cent on the parallel market in 10 weeks, but economic activity is lagging the currency gains. Skeptical Nigerians are wondering whether this naira momentum is sustainable. This is because a strong currency is not necessarily synonymous with a strong economy.

Highlighting other economic indices, the report said, “The good news is that inflation is sliding and First Bank of Nigeria’s Purchasing Managers Index, a measure of manufacturers’ confidence spiked by six per cent to 58.9. More importantly, oil production is reported to be two million barrel per day, a 32-month high.

“These indicators confirm the notion that the long anticipated economic recovery may have started ahead of analysts’ expectation. This recovery however is vulnerable to exogenous and domestic political shocks.”

The report linked the naira appreciation to four factors. These were: the sharp increase in oil revenue estimated at a monthly value of $2.5bn, a shift in exchange rate policy, a 16.9 per cent increase in forex supplied in Q1 2016, and the recent opening of a new investors/exporters FX window by the CBN.

According to the FDC document, the CBN is expected to reduce its frequency of intervention in the coming weeks. It also described the forex market as “imperfect” with a price discriminating monopoly.

It stated that the CBN had sold $3.6bn since February 20 when it introduced the forex policy.

Economic and financial experts are, however, divided over whether the CBN will sustain its intervention in the forex market or not.

The CBN has said it will continue to intervene in the market to meet the needs of genuine end-users and bolster the naira.

It said with oil price hovering above $50/barrel and external reserves still above $30bn, the regulator would continue to intervene in the market.

The report stated that the CBN might end the current multiple exchange rate regime by putting the Real and Effective Exchange Rate at something between 360/dollar and 375/dollar.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Business

Elon Musk Net Worth Jumps by $100 Billion this Year to Topple Bill Gates, Mark Zuckerberg, Others 

Published

on

Tesla earnings

Elon Musk, the Chief Executive Officer and founder of Tesla, is now the world’s second-richest person following another surge in the price of Tesla share.

Musk total net worth jumped by $7.6 billion to $110 billion between November 16 and 17 to dethrone Facebook founder, Mark Zuckerberg, from the third position.

Since then, Tesla stock has been on a bullish run and in the last 24 hours added $7.24 billion to Elon Musk’s total net worth, according to Bloomberg Billionaire Index. Bringing the billionaire’s total net worth to $128 billion.

Elon Musk’s net worth rose from just $28 billion in January 2020 to $128 billion on November 24, 2020, representing an increase of $100 billion, the highest by any billionaire.

Musk has finally toppled Bill Gates as the second richest person and for the first time, Bill Gates is the third richest man in the world. This is the first time in almost 40 years that Gates will be in the third position.

Billionaires listed on Bloomberg Index have collectively gained $1.3 trillion this year.

Continue Reading

Business

An Average of 48% Global Consumers to Significantly Cut 2020 Holiday Spending

Published

on

Data presented by Buy Shares indicates that an average of 48% of global consumers plans to significantly reduce their 2020 compared to 2019. The research sampled consumer feedback from 13 countries.

Pandemic triggers reduced spending 

The data also highlights that an average of 13.46% of global consumers plans to spend more on 2020 holidays than last year. Consumers from Indonesia at 71% plan to shrink their budget in 2020 while 16% will spend more.

About 69% of Mexican consumers will spend less, while 12% plan for more spending. In Brazil, about 65% of consumers will cut their budget while 11% plan to spend more than last year. At 63%, South African consumers will cut back on holiday spending while 12% plan to increase their budgets from last year.

In Spain, 55% of consumers will reduce their spending while 7% plan an increase from a year ago. Italian consumers spending less will be at 54%, with 6% planning to increase their budget.

In India, about 47% of people will cut back on the holiday budget, while 36% plan to increase spending. French consumers at 44% have intentions of reducing holiday spending while 6% will raise the spending from a year ago. 43% of UK consumers will spend less, while 9% have plans to spend more.

In the United States, 42% of consumers will spend less, while 17% will increase the budget. For Germany, about 29% of consumers will spend less than 7% planing to pay more. It is only in China where more people plan to spend more at 29% than 25% planning to spend less at 25%.

Elsewhere, 21% of Japanese consumers plan to spend less, while 7% will pay more. The research highlighted some of the reasons behind the massive slash in this year’s holiday spending. According to the research report:

“The less spending comes as most consumers lost their jobs and faced pay cuts as employers struggled to remain afloat in the course of the health crisis. Some consumers have been saving more to pay debts, while those on stimulus paychecks cannot sustain daily needs and holiday spending.”

The research also notes that most Americans at 30% look forward to the Christmas holiday while 23% anticipate Amazon Prime Day. Only 7% of Americans look forward to Fathers Day.

Continue Reading

Business

President Buhari to Inaugurate Waltersmith 5,000bpd Modular Refinery Today

Published

on

oil refinery

President Muhammadu Buhari will inaugurate the 5,000 barrels per day modular refinery built by Waltersmith Group in Imo State.

According to Waltersmith Group, the President will lead a team of other top government officials, oil regulators and stakeholders to Imo State today for the inauguration, the Group stated in a statement released on Monday.

It said the modular refinery has a storage capacity of 60,000 barrels and is expected to deliver over 271 million litres per annum of refined petroleum products, including kerosene, diesel, naphtha and heavy fuel oils, to the domestic market.

Mr. Abdulrazaq Isa, the Chairman, Waltersmith Group, said the first of 50,000 bpd modular refinery to be inaugurated today would process 5,000bpd of crude oil.

We are looking at 50,000bpd refining capacity that will come with the planned additional two modules; 25,000bpd and 20,000bpd refining capacity respectively which will then add PMS, aviation fuel and LPG to the product slates,” he added.

The statement added that Waltersmith obtained the ‘Licence to Establish’ the refinery from the Department of Petroleum Resources in June 2015 and got the ‘Authority to Construct’ in March 2017.

Continue Reading

Trending