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Absence of Cabinet Stalls Afam, Yola Power Firms Sale

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  • Absence of Cabinet Stalls Afam, Yola Power Firms Sale

The failure of President Muhammadu Buhari to constitute the Federal Executive Council is stalling the conclusion of the sale of Afam Power Plc and the Yola Electricity Distribution Company, an investigation has shown.

Members of the National Council on Privatisation which has the statutory role to approve the sale of the companies whose technical and financial bids have been concluded are drawn from the Federal Executive Council.

Traditionally, the Minister of Finance is the Vice-Chairman of the council which is chaired by the Vice-President, Prof Yemi Osinbanjo. Some other members of the cabinet which has yet to be constituted by the President are members of the council.

Our correspondent reported that the Technical Committee of the NCP had approved the N124.3bn bids for Afam Power Plc and Yola Electricity Distribution Company but the process could not proceed because the NCP could not sit without forming a quorum.

At the financial bids opening for the two power companies in April, Transcorp Power Consortium had emerged the bid winner for 100 per cent equity in Afam Power Plc with an offer of N105.3bn.

Similarly, Quest Electricity won the bid for 60 per cent equity in Yola Electricity Distribution Plc with a bid of N19bn.

Both the management committee of the Bureau of Public Enterprises and the Technical Committee of NCP had reviewed and approved the transactions before the transactions were passed on to the NCP.

Our correspondent learnt that the privatisation agency had written the NCP but had not been able to get any reply because the NCP could not sit before the cabinet was dissolved preparatory to the swearing-in of Buhari for a second tenure which began on May 29.

It is after the approval of NCP that BPE can invite the prospective core investors to sign Share Purchase Agreements with them. Although NCP usually follows the advice of BPE, it also has the power to cancel any transaction.

At the bid opening in Abuja, Diamond Stripes Consortium was declared the reserve bidder for Afam Power Plc with a bid of N102.39bn while Unicorn Power Generation Consortium came third with a bid of N101.05bn.

The bidding for Afam closed in the second round. At the first round of bidding, Unicorn had emerged the highest bidder with a bid of N100.45bn; Transcorp submitted a bid of N89.37bn while Diamond put in a bid of N72.73bn.

It was when the potential investors were asked to reverse their bids for a second round that Transcorp Power Consortium which already operates the Ugheli Power Plant threw in the highest bid of N105.3bn.

On the other hand, Quest Electricity Nigeria Limited, which was the sole bidder for Yola Electricity Distribution Company submitted an initial bid of N17.67bn.

However, the company reversed its bid at the second round when it was told that its bid did not meet the reserve price set by the National Council on Privatisation.

The privatisation of Afam Electricity Generation Company could not be concluded during the first round of privatisation of electricity companies in 2013 due to issues stemming from gas supply to the plant.

For the YEDC, although it was successfully privatised and handed over to the core investor in 2013, a force majeure was declared in 2015 by the core investor, citing insecurity in the North-East region of the country. Consequently, the company was repossessed by the Federal Government.

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.

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Global Oil Drops as Coronavirus Infections Rises in India and Other Nations

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Oil prices declined on Monday during the Asian trading session amid rising concerns that the surge in coronavirus in India and other nations could force regulators to enforce stronger measures at curbing its spread and eventually affect economic activity and drag on demand for commodities like crude oil.

Brent crude oil, against which Nigerian oil is priced, declined by 22 cents or 0.33 percent to $66.55 per barrel at 8:19 am Nigerian time on Monday, following a 6 percent surge last week.

The US West Texas Intermediate (WTI) declined by 18 cents or 0.29 percent to $62.95 per barrel, after it gained 6.4 percent last week.

The decline was after India reported 261,500 new coronavirus infections on Sunday, taking the country’s total cases to almost 14.8 million, second to only the United States that has reported over 31 million coronavirus infections.

“With … a resurgence of virus cases in India and Japan, topside ambitions continue to run into walls of profit-taking,” said Stephen Innes, chief market strategist at Axi.

Businesses in Japan believed the world’s third-largest economy will experience a fourth round of coronavirus infections, with many bracing for an additional slow down in economic activity.

While Japan has had fewer COVID-19 cases when compared with other major economies, concerns about a new wave of infections are fast rising, according to responses in Reuters poll.

On Tuesday, April 20, 2020, Hong Kong will suspend all from India, Pakistan and the Philippines because of imported coronavirus infections, authorities stated in a statement released on Sunday.

India’s COVID-19 death rose by a record 1,501 to hit 177,150.

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Global Markets Near Record Peaks and Will Get Stronger: deVere CEO

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As the FTSE 100 hits 7,000 points for the first time since the Covid pandemic, global stock markets are poised to “get even stronger”, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The observation from Nigel Green, the chief executive and founder of deVere Group, comes as London’s index jumped over the important threshold in early trading in London, gaining over 0.5% to 7024 points.

Mr Green notes: “London’s blue-chip index is up 40% since the worst lows of the pandemic.

“This landmark moment represents the wider optimistic sentiment gripping global markets which are near record peaks.

“We can expect global stock markets to get even stronger as investors look to seize the opportunities from economies reopening.

“They are looking towards economies rebounding in a post-pandemic era due to the monetary and fiscal stimulus, pent-up cash and demand, and strong corporate earnings.

“The current ultra-low interest rate environment and the under-performance of bonds will also act as a catalyst for stock markets.”

However, the CEO’s bullish comments also come with a warning.

“I would urge investors to proceed with caution as there are some headwinds on the horizon, including relations between the U.S. and China, the world’s two largest economies, which could be coming to a tipping point in coming weeks.

“As such, in order to capitalise on the opportunities and mitigate risks, investors must ensure proper portfolio diversification.”

Mr Green concludes: “A variety of factors are going to drive global stock markets. Investors will not want to miss out and should work with a good fund manager to judiciously top-up their portfolios.”

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Refinitiv Expands Economic Data Coverage Across Africa

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Building on its commitment to drive positive change through its data and insights, Refinitiv today announced the expansion of its economic data coverage of Africa. The new data set allows investment managers, central bankers, economists, and research teams to use Refinitiv Datasteam analytical data for detailed exploration of economic relationships and investment opportunities among data series covering the African continent.

Securing reliable, detailed, timely, locally sourced content has not been easy for economists who have in the past had to use international sources which often can take many months to update and opportunities to monitor the market can be missed. Because Africa is a diverse continent, economists and strategists need more timely access to country-specific data via national sources to create tailored business, policy, trading and investment strategies to meet specific goals.

Africa continues to develop critical infrastructure, telecommunications, digital technology and access to financial services for its 1.3bn people. The World Bank estimates that over 50% of African inhabitants will be under 25 by 2050. This presents substantial opportunities for investors who can spot important trends and make informed decisions based on robust and timely economic data.

Stuart Brown, Group Head of Enterprise Data Solutions, Refinitiv, said: “Africa’s growing, dynamic and fast evolving economies makes it a focal point for financial markets today and in the coming decades.  As part of LSEG’s commitment to empowering the global markets with accurate and timely data, we are excited about making these unique datasets available via the Refinitiv Data Platform. Our economic data coverage of Africa will provide our customers with deeper and broader inputs for macroeconomic analyses and enable more effective investment strategies and economic research.”

Refinitiv Africa economic data coverage:

  • Africa economics content comprises around 500,000 nationally sourced time series data covering 54 African nations
  • Content is sourced from national statistical offices, central banks and other key national institutions
  • The full breadth of economics categories in Datastream including national accounts, money and finance, prices, surveys, labor market, consumer, industry, government and external sectors
  • International sources including OECD, World Bank, IMF, African Development Bank, Oxford Economics & more provide comparable data & forecasts across the continent

Refinitiv® Datastream® has global macroeconomics coverage to analyze virtually any macro environment, and better understand economic cycles to uncover trends and forecast market conditions. With over 14.2 million economic times series map trends, customers can validate ideas and identify opportunities using Refinitiv Datastream. Access its powerful charting tools, 9,000 pre-built chart templates and chart studies for commonly used valuation, performance, and technical and fundamental analysis.

 Refinitiv continually grows available data – the China expansion in 2019 covered a unique combination of economic and financial indicators. Refinitiv plans to expand Southeast Asia covering Thailand, Vietnam, Philippines and Malaysia with delivery expected in 2021. This ensures that Refinitiv will have much needed emerging market economic content.

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