Connect with us

Finance

Naira Comes Under Pressure, Reserves Drop to $47.75bn

Published

on

Naira - Investors King
  • Naira Comes Under Pressure, Reserves Drop to $47.75bn

The naira has come under pressure against the United States’ dollar in recent days, falling to 366 to the greenback on the parallel market.

The pressure followed the decline in the nation’s foreign exchange reserves for the first time in eight months.

The media reported on May 17 that the external reserves slipped to $47.793bn on May 14 from $47.865bn on Thursday, May 10, according to data from the Central Bank of Nigeria.

The reserves, which fell further to $47.784bn on May 16, rose to $47.799bn on May 18, but dropped to $47.754bn on May 21, the latest CBN data showed. The reserves figures had not been updated as of the time of filing this report on Tuesday.

“Naira depreciates to a seven-month low of N366/$ on speculative demand. Naira weakness could stoke imported inflation,” analysts at Financial Derivatives Company Limited, headed by Bismarck Rewane, a foremost economist, said in their latest economic bulletin.

Ecobank Capital, in its Middle Africa Market Weekly Update, said depreciation pressures on the naira could emerge with rising risk-averse sentiment on emerging and frontier markets.

“The exchange rate depreciated slightly at the Investors & Exporters window at N361.6/$ and depreciated a bit more at the parallel market at N366/$. Turnover at the IE window rose 13.2 per cent from the prior week to $1.1bn,” they added.

The Chief Executive Officer, Cowry Assets Management Limited, Mr. Johnson Chukwu, said, “Clearly, we have seen some pressure, and it is partly occasioned by the reversal of capital flow. I think what is happening is that foreign portfolio investors are not reinvesting their matured instruments; rather they are converting to dollar to take it out.

“The drop in the reserves is coming from the outflow. The level of inflow is less than the current level of outflow. Once you see currency on the currency, it will manifest in the reserves. This is what we are seeing now that the reserves have seen two weeks of consecutive decline, which was the first in a very long time.”

He said the pressure would continue in the short- to medium-term because “it was also partly associated with the heightened political uncertainty principally coming from the challenges that the ruling party had with their congresses.”

“Until after elections, I do not imagine that the concerns of foreign portfolio investors would have been assuaged,” Chukwu added.

Reuters reported last Thursday that the naira was seen under pressure as portfolio investors continued to exit local treasuries due to lower yields.

It said trade was thin by midday last Thursday as most wanted to buy the dollar, with little supply, adding that the naira last traded at 362.50 for investors on Wednesday, last week.

Yields on Nigeria’s treasuries have fallen to around 12 per cent from as high as 18 per cent a year ago after the government repaid maturing bills rather than roll them over as it has done in the past. The outflow by investors has also been worsened by interest rate rises in the United States.

“A rise in the FX rate might compensate for the drop in yields and that could attract investors back again,” one trader said of the naira.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Banking Sector

Access Holdings Plc Plans $1.8 Billion Capital Raise

Published

on

Access bank

Access Holdings Plc, the parent company of Nigeria’s leading bank, Access Bank Plc, has unveiled ambitious plans for a $1.8 billion capital raise aimed at fueling its expansion efforts over the next four years.

The strategic move comes as Access sets its sights on becoming one of the largest lenders on the African continent.

During a conference call with investors in Lagos, executives outlined the company’s intention to raise $1.5 billion, or the naira equivalent, through the issuance of shares, bonds, or other financial instruments.

Also, Access aims to generate up to 365 billion naira ($257 million) by selling shares to existing investors.

Bolaji Agbede, acting group chief executive officer, clarified that the current fundraising initiative primarily involves a rights issue.

The capital infusion is earmarked to support Access’s ambitious growth plan, which commenced last year.

The bank intends to expand its footprint into new markets, including Morocco, Egypt, and the United States, as part of a broader strategy to double the share of assets outside its home market by 2027.

With operations spanning 22 countries, including the United Arab Emirates and the UK, Access Bank is positioning itself for significant international growth.

The recent appointment of Bolaji Agbede as acting group CEO follows the passing of co-founder and former CEO, Herbert Wigwe, adding a layer of significance to the bank’s future direction.

Access’s acquisition of National Bank of Kenya Ltd. underscores its commitment to expanding its presence in East Africa’s largest economy.

As Access Bank charts its course for expansion, the $1.8 billion capital raise signals its determination to seize opportunities in a rapidly evolving financial landscape, both domestically and across the African continent.

Continue Reading

Finance

OPEC+ Production Cuts and Geopolitical Tensions Propel Oil Price to Over $87

Published

on

Crude oil - Investors King

Oil price surged past the $87 price level on Thursday on the back of production cuts by OPEC+ nations and escalating geopolitical tensions.

Brent crude oil, against which Nigerian oil is priced, rose by $1.39 or 1.6% to $87.48 a barrel, its highest level since October 27.

OPEC+, the alliance of major oil-producing nations, has remained resolute in its commitment to curtail output, effectively tightening the supply of crude in the market.

Despite calls for increased production to alleviate soaring prices, the alliance has opted to maintain its course, further buoying the market sentiment.

Simultaneously, geopolitical tensions have added fuel to the fire. Attacks on Russia’s energy infrastructure, particularly by Ukraine, have sparked concerns over potential disruptions to the global oil supply chain.

Despite diplomatic efforts to deter such actions, the situation remains precarious, contributing to market anxieties.

Analysts suggest that these price surges may have long-term implications for global economies, particularly for oil-importing nations heavily reliant on stable energy prices.

Furthermore, the impact of rising oil prices on inflation and consumer spending patterns remains a point of contention among economists and policymakers.

As the world watches with bated breath, the trajectory of oil prices hinges on a delicate balance between geopolitical developments, OPEC+ policies, and the broader economic landscape.

For now, the $87 threshold serves as a stark reminder of the volatility and interconnectedness inherent in the global energy markets.

Continue Reading

Insurance

Heirs Insurance Group Unveils Revolutionary Website for Seamless Insurance Experience

Published

on

Heirs Life Assurance- Investors King

Heirs Insurance Group has launched a website designed to revolutionize the insurance experience for its customers.

With a focus on simplicity, accessibility, and personalized service, the new website aims to streamline the process of obtaining insurance coverage and empower customers to make informed decisions about their insurance needs.

The website boasts a range of innovative features that make navigating insurance options easier than ever before.

From simple and intuitive navigation menus to personalized insurance recommendations, the website is designed to guide customers through every step of the insurance process quickly and efficiently.

According to Ifesinachi Okpagu, the Chief Marketing Officer of Heirs Insurance Group, the new website embodies the company’s commitment to delivering exceptional customer service.

“Today’s customers want simplicity, and this new website delivers on that request,” Okpagu said. “We are empowering customers to take control of their lives, their businesses, assets, and their most cherished people.”

One of the key features of the website is its personalized insurance experience, which takes customers through a short journey to help them identify the best insurance plan for their needs.

Whether customers are looking for coverage for their home, car, business, or loved ones, the website provides tailored recommendations to ensure they find the right insurance solution quickly and easily.

With its user-friendly interface and innovative features, the new website from Heirs Insurance Group sets a new standard for the insurance industry, making it easier than ever for customers to protect what matters most to them.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending