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Goldman Sachs Sees Weak Dollar As Economies Reopen

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Global debt
  • Goldman Sachs Sees Weak Dollar As Economies Reopen

Goldman Sachs, one of the world’s leading investment banks, has started taking short positions on the US dollar as more economies reopen for business.

In a note issued over the weekend, Goldman Sachs said shorting the US dollar looks attractive against certain currencies.

According to the investment bank, reopening economies would lure people out of haven currencies, especially with limited evidence of new COVID-19 infection rates and encouraging policy actions in Europe.

In particular, the bank predicted that Norwegian Krone will outperform during the remainder of the COVID-19 pandemic. Therefore, suggested shorting US/NOK pair with a take profit target at 8.75 krone to the US dollar but advised to get out if the European currency depreciated to 10.25 against the greenback.

Short selling a currency involves borrowing that currency, selling it at the current market price and then waiting for the price to fall in order to buy the currency back at a lower price and return the loan. The short seller therefore profits if the currency depreciates over that time period.

“(Norway’s) demographics and domestic medical infrastructure make it better equipped for the outbreak than many other countries, and its strong fiscal position puts it at a distinct advantage,” Goldman analysts, led by co-heads of global foreign exchange, Zach Pandl and Kamakshya Trivedi, said in the note on Sunday.

“While others are forced to either limit their fiscal policy support or dramatically increase borrowing—both potentially currency negatives—Norway is able to repatriate funds from its investments abroad (today, Norway announced that it will increase daily transactions even further, from NOK 2.1bn to NOK 2.3bn), helping support the economy and the currency.”

USDNOKDailyA technical look into the pair shows a sustainable break of the descending trendline (bullish wedge) is necessary to valid bearish continuation while a break below 9.4 support level that doubled as the top of March gap as shown above is imperative for 8.75 support levels predicted by the investment bank.

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.

Finance

Stanbic IBTC Obtains Approvals, License to Establish Life Insurance Subsidiary

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stanbic IBTC Insurance

Stanbic IBTC Holdings Plc on Friday announced that it has obtained all required Regulatory Approvals and a license from the National Insurance Commission to establish a wholly-owned Life Insurance subsidiary, Stanbic IBTC Insurance Limited (SIIL).

In a statement signed by Chidi Okezi, Company Secretary, Stanbic IBTC and released on Friday, the bank said “The establishment of this new subsidiary essentially complements the bouquet of product offerings by Stanbic IBTC as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria. In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business.

“Stanbic IBTC Holdings PLC, a member of Standard Bank Group, is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.

“Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.”

 

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World Bank to Discuss New $1.5 Billion Loan Request From Nigeria

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Zainab Ahmed

The Finance Minister, Budget and National Planning, Mrs. Zainab Ahmed, on Friday said the Federal Government has met all the conditions for a fresh loan of $1.5 billion from the World Bank.

The minister disclosed this on Bloomberg TV.

She said the multilateral financial institution is in the final stage of approving the loan. The minister explained that the loan will be discussed in the bank’s next meeting and possibly be approved in the same meeting.

In June, the Senate approved the borrowing plans but the World Bank pushed back demanding Nigeria fulfill the conditions attached to the $3.4 billion loan received from the International Monetary Fund (IMF) in May.

Some of the conditions were to increase revenue generation by upping VAT, the introduction of tariff reflective electricity bill, the removal of subsidy and the unification of the nation’s foreign exchange.

Most of which the Federal Government has done despite protests from most Nigerians who called the new policies anti-people given their current situation.

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Nigeria Realises Over N400 Billion from Company Income Tax in the Third Quarter of 2020

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tax relief

The Federal Government realised N416.01 billion from Company Income Tax (CIT) in the third quarter of the year, according to the latest report from the National Bureau of Statistics (NBS).

This was 3.48 percent higher than the N402.03 billion generated in the second quarter of the year and represents a decline of 20.13 percent year-on-year from N520.89 billion realised in the third quarter of 2019.

A breakdown of the report showed the professional services sector including the telecoms generated the highest amount of CIT at N55.52 billion during the quarter, while the manufacturing sector followed with N42.03 billion.

The banking and financial institutions realised N24.05 billion while the mining generated the least and closely followed by Textile and Garment Industry and Local Government Councils with N120.93 million, N167.51 million and N321.72 million generated, respectively.

The report added that out of the total amount realised during the quarter under review, a sum of N244.70 billion was generated as CIT locally. The federal government collected N70.34 billion as foreign CIT payment and the remain N100.97 billion was received as CIT from other payments.

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