The debate, says the CEO of a global financial giant, about whether inflation is ‘transitory’ or not is now over and investors should review their investments.
The warning from Nigel Green, chief executive of deVere Group, which has $12bn under advisement, comes as the Bank of England on Thursday raised UK interest rates for the first time in more than three years in an effort to combat surging inflation.
The BoE’s Monetary Policy Committee voted 8-1 in favor of the increase to 0.25%.
The move follows the U.S. Federal Reserve in a meeting on Wednesday setting the stage for earlier, faster interest rate hikes as inflation soars. The U.S. central bank is now forecasting three rate increases next year.
Elsewhere, China’s factory-gate prices grew at the fastest pace in 26 years and consumer-price inflation has exceeded expectations.
Mr Green says: “From the UK to the U.S., China to Europe, amongst most other economies, inflation risks are real. And they’re building.
“This will increasingly rattle the markets.
“Throughout 2021, the debate was whether soaring inflation is ‘transitory.’ This debate is now over.
“Why? Because the fallout from the pandemic has also not been ‘transitory.’ Ongoing supply issues, new variants, and global disparities in dealing and managing them, has resulted in prices having to rise.”
He continues: “As inflation now becomes the biggest issue for investors, the debate throughout 2022 will shift on to how to manage it.
“There are real opportunities to be had, but navigating the territory is set to become more complex in the coming months as we move towards a new era of interest rate normality.
“There will be a steady flow of interest rate hikes from most major central banks throughout 2022.”
Last month he opined that this is “the hardest time to be an investor and worst time not to be.”
Investors, he says, should remain in the market, but they should review their portfolios to ensure that they are properly diversified across asset class, sectors, regions and currencies. This will ensure they are best positioned for any eventuality in the current investment landscape.
Mr Green concludes: “Inflation is set to be the number one investment headwind facing us in 2022. Now is the time to review portfolios.”
NLNG Boosts Cooking Gas Production to 1.5 Million Metric Tonnes Annually
Nigeria Liquefied Natural Gas Limited (NLNG) has announced a significant milestone in its operations, boosting its annual production of liquefied petroleum gas (LPG), commonly known as cooking gas, to over 1.5 million metric tonnes.
This surge in production underscores NLNG’s commitment to meeting the rising demand for clean cooking energy in Nigeria.
The entirety of NLNG’s 1.5 million tonnes production is now being sold domestically within Nigeria.
Moreover, the company has initiated a landmark shift by starting to supply LPG in naira, moving away from the traditional practice of trading in United States dollars.
This move aligns with calls from stakeholders in the oil and power sectors advocating for naira transactions, especially amidst the challenges posed by currency fluctuations.
During a panel session at the 7th Nigeria International Energy Summit in Abuja, NLNG’s General Manager of Finance, Fatima Adanan, highlighted the company’s dedication to enhancing LPG penetration across the country.
Adanan emphasized NLNG’s vision to make Nigeria a better place by promoting the use of cleaner energy sources like gas.
While NLNG’s production surge is commendable, Adanan acknowledged that Nigeria’s LPG requirements surpass the current output, necessitating imports to bridge the gap.
However, NLNG remains committed to expanding its production capacity to meet the nation’s energy needs and drive increased adoption of LPG as a cleaner cooking fuel.
CBN Raises Benchmark Interest Rate by 400 Basis Points to 22.75%
The Central Bank of Nigeria (CBN) has raised the benchmark interest rate by 400 basis points to a record 22.75%.
The decision made by the Monetary Policy Committee (MPC) comes amidst rising inflationary pressures and growing uncertainty in Africa’s largest economy.
Nigeria’s inflation rate rose to 29.90% in January 2024, the highest in over two decades while the nation’s unemployment rate quickened to 5% in the third quarter of 2023. Suggesting that the rising costs have continued to drag on both new job creation and the existing ones.
This coupled with a series of policy adjustments implemented by President Bola Ahmed Tinubu has plunged economic productivity and eroded consumer spending as citizens grapple with high fuel prices, electricity tariffs, a record-high foreign exchange rate, and insecurities.
Therefore, it is surprising that the Monetary Policy Committee (MPC) led by the CBN will further increase borrowing costs by 400 basis points at a time when job creation is paramount.
While the economy reportedly grew by 3.46% in the fourth quarter (Q4) of 2023 on the back of robust performance of the services sector, this growth is yet to crystalise as businesses and citizens have taken to the street protest against the harsh economic situation.
Economic experts have started questioning the data from the National Bureau of Statistics (NBS) given its lack of correlation between the data and economic reality.
President Tinubu Unveils Geometric Power Plant in Aba After 20-Year Wait
After two decades of anticipation, President Bola Tinubu, through his representative Vice President Kashim Shettima, inaugurated the long-awaited Geometric Power Plant in Aba, a significant milestone in the city’s quest for reliable electricity supply.
The event, which also saw the commissioning of three rehabilitated roads by Abia State Governor Alex Otti, symbolizes the culmination of years of perseverance and determination to transform Aba’s power landscape.
Addressing the audience, Vice President Shettima hailed the project as a testament to the power of visionary leadership and unwavering commitment to progress.
He said the Geometric Power Plant exemplifies the transformative impact of strategic infrastructure investments on local communities.
Governor Otti echoed similar sentiments, emphasizing the importance of the power project in positioning Aba as a hub for national and international business ventures.
He commended the efforts of Geometric Power Limited while urging them to uphold transparency and avoid exploiting consumers.
The inauguration of the Geometric Power Plant comes amidst growing concerns over Nigeria’s power infrastructure and the need for sustainable solutions to address electricity shortages.
The project, with a capacity of 188MW, holds promise for significant improvements in power supply across Abia State, benefitting nine out of seventeen local government areas.
The Managing Director of Geometric Power Limited, Ben Caven, underscored the scale of investment involved, totaling $800 million.
He highlighted the comprehensive nature of the project, which includes the installation of new power substations and a 27km natural gas pipeline, signaling a comprehensive approach to enhancing Aba’s energy infrastructure.
In conclusion, the inauguration of the Geometric Power Plant represents a transformative moment for Aba, offering renewed hope for economic growth and prosperity powered by reliable electricity supply.
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