The global financial market rout has plunged the value of the world’s largest technology companies by over $1 trillion in the last three trading days. This was after the Federal Reserve raised interest rates by 0.25% last week, below the 0.75% projected by experts.
The Federal Reserve had attributed its decision to a series of global uncertainties due to the Russia-Ukraine war and extended COVID-19 restrictions in China, the world’s second-largest economy. These were a few of the uncertainties predicted by a global investment bank, Deutsche Bank to plunge the U.S and the rest of the world into a recession by 2023.
Concerns over projected recession have led to a broad-based selloff in risk assets across the world.
“When risk assets fall and fall fast enough, there’s no question they’re going to hurt growth,” said LaVorgna, who was chief economist for the National Economic Council under former President Donald Trump. “If anything, the relationship is even better when asset prices decline than when they go up.”
Apple Inc, the world’s most capitalised company shed $200 billion in the last three trading days.
While Microsoft lost $189 billion in market value. Tesla, Amazon, Alphabet, Nvidia and Meta (Facebook) lost $199 billion, $173 billion, $123 billion, $85 and $70 billion, respectively.
In only three trading sessions the “Stocks at large have sold off since the Federal Reserve raised its benchmark interest rate on Wednesday, but technology has endured more pain than other sectors of the economy.”
Nigeria’s Commercial Papers Surge to Over N1 Trillion
Commercial Papers (CPs) listed on the FMDQ Exchange in the first 10 months of the year now worth N1 trillion.
This represents a 279.38% increase compared to the same period in 2022, signaling a significant shift in corporate financing strategies.
The financial services sector takes the lead, contributing approximately 55% of the listed CPs while the manufacturing sector closely follows with 37 CPs and the real estate and agriculture record 24 and 19 CPs, respectively.
The trend aligns with the observation of David Adonri, Vice Chairman of Highcap Securities, who notes that the surge in high-interest rates prompts companies to seek more cost-effective funding sources, turning to CPs as a viable solution for short-term capital needs.
Adonri emphasizes the advantage of CPs, especially in financing working capital, as they offer a lower cost compared to traditional bank borrowing.
Echoing similar sentiments, Johnson Chukwu, CEO at Cowry Asset Management Limited, underscores the impact of the high-interest rate environment, driving companies to explore the money market for funding.
The ease of issuing commercial papers adds to their appeal.
Tajudeen Olayinka, CEO of Wyoming Capital and Partners, sheds light on the practicality of CPs for real sector businesses facing prohibitive capital costs.
The surge in CP listings in the fixed-income market reflects the strategic utilization of this short-term funding source.
This financial shift comes against the backdrop of Nigeria’s inflation figure at 27.33% and a Monetary Policy Rate of 18.75%.
The Central Bank of Nigeria’s recent approval of an explicit inflation-targeting framework further emphasizes the need for adaptive financial strategies in the face of evolving economic conditions.
Dollar to Naira Black Market Today August 1st, 2023
As of August 1st, 2023, the dollar to naira exchange rate is 1 USD to 867 NGN at the black market. This means that for every one US dollar, you can exchange it for ₦867, Investors King reports.
This digital business news platform has obtained the official dollar to naira exchange rate in Nigeria today including the Black Market rates, Bureau De Change (BDC) rate, and CBN rates.
How much is $1 to Naira in black market?
This rate is subject to change depending on a variety of factors including global economic trends, political developments, and market fluctuations. However, you can buy and sell 1 USD at ₦862 and ₦867 as of the time of writing today.
What is the current exchange rate of the dollar to naira in the black market today?
According to Investors King, as of the time this report was filed, a dollar can be purchased at the Lagos parallel market (black market) for ₦862 and sold for ₦867.
Exchange Rate of Dollar To Naira in Black Market Today?
|Dollar to Naira (USD to NGN)||Black Market Exchange Rate Today|
Central Bank of Nigeria (CBN) Naira Exchange Rates for banks
Investors King understands that although the dollar to naira opened at N867 per $1 in the parallel market today, the Central Bank of Nigeria (CBN) does not acknowledge the parallel market, also referred to as the black market. The CBN has instructed individuals in need of forex to approach their bank as the I&E window is the sole recognized exchange.
On Tuesday, August 1st, 2023, individuals in the black market purchased one US dollar for N867 and sold it for N862. This shows that the value of the Naira is mixed when compared to Monday, July 31st, 2023 when the local currency was exchanged at N862 to a Dollar and a Dollar was purchased at N867.
To stay informed about the dollar to naira exchange rate, there are a number of reliable sources that you can turn to. Here are some tips for staying up-to-date:
- Check the Central Bank of Nigeria’s website: The CBN is responsible for regulating the country’s monetary policy and is a reliable source for the latest exchange rates. You can check their website regularly for updates.
- Follow financial news outlets: Financial news outlets such as Investors King, Bloomberg, Reuters, and CNBC provide regular updates on the global currency markets, including the dollar to naira exchange rate.
- Use online currency converters: There are a number of online currency converters that allow you to quickly and easily check the exchange rate between the dollar and the naira.
- Follow social media accounts of financial experts: Following social media accounts of financial experts such as analysts, economists, and financial advisors can give you valuable insights into the latest trends in the currency markets.
By staying informed about the dollar-to-naira exchange rate, you can make informed decisions when buying or selling foreign currencies. Whether you are a business owner looking to trade in foreign currencies or an individual looking to invest in the currency markets, knowledge of the latest exchange rates is key to success. Keep these tips in mind and stay informed about the latest trends in the global currency markets.
Commercial Paper Quotations Surge on FMDQ Exchange, Reaching N669.36bn in Q1 2023
The FMDQ Exchange, Nigeria’s foremost debt capital market, has reported a remarkable increase in the value of quoted commercial papers (CPs) during the first quarter of 2023.
The total outstanding value of CPs rose to an impressive N669.36bn at the end of the same period, indicating a significant boost to the country’s financial market.
The monthly reports from the FMDQ Exchange reveal a sustained upward trend in the quotations of commercial papers since the beginning of the year. These quoted CPs were issued by institutions across diverse sectors, including real estate, financial services, manufacturing, agriculture, and health.
In February 2023, the total value of CPs quoted on the FMDQ Exchange stood at N101.84bn, representing a month-on-month increase of 22.40% (N18.64bn) compared to January 2023. The sectors contributing to these quoted CPs included financial services, real estate, manufacturing, construction, and more.
The upward trajectory continued in March 2023, with the total value of CPs quoted on the FMDQ Exchange reaching a staggering N354.18bn. This figure reflected a substantial month-on-month increase of 247.80% (N252.34bn) from the previous month. Manufacturing, agriculture, financial services, real estate, telecommunications, commodities trading, and general commerce were the sectors responsible for issuing quoted CPs.
The surge in commercial paper quotations resulted in a remarkable 82.76% month-on-month increase (N303.11bn) in the total outstanding value of CPs, reaching N669.36bn. It is worth noting that CPs worth N113.10bn matured and were redeemed in January 2023.
Comparing the data with previous months, the figures for the first three months of 2023 far exceeded the preceding seven months, which saw quoted CPs below N80bn.
Commenting on this trend, Johnson Chukwu, the Chief Executive Officer at Cowry Asset Management Limited, emphasized that the high interest rates and the ease of issuing commercial papers were driving companies to seek funding in the money market. Chukwu explained that during periods of high-interest rates, borrowers prefer short-term debts to avoid being locked into long-term obligations.
Furthermore, Chukwu highlighted that commercial papers offer companies a cost-effective alternative to borrowing from banks. By accessing the commercial paper market directly, borrowers can tap into lower borrowing costs compared to the fees associated with bank loans.
Okiki Oladipo, an analyst at Parthian Partners, pointed out that the current low yield in the money market is attracting businesses to engage in this segment. However, there are expectations of a rise in yields, which could impact the sustainability of this funding strategy. Oladipo emphasized that a borrower’s financial health and the trajectory of market yields play pivotal roles in determining the long-term viability of the strategy.
The surge in commercial paper quotations on the FMDQ Exchange underscores the growing significance of this financial instrument in Nigeria’s capital market. As more companies turn to commercial papers for funding, it is expected to stimulate economic growth and provide additional opportunities for investors in the country.
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