- Delayed Confirmation of MPC Nominees Worries Private Sector Operators
Members of the organised private sector under the umbrella of the Nigeria Employers’ Consultative Association (NECA) have expressed disappointment about the non-confirmation of nominees to the Monetary Policy Committee (MPC) by the National Assembly.
This is just as the association vehemently opposed the over 200 per cent increase in Land Use Charge in Lagos state, describing it as an insensitivity and gross disregard of the current state of wellbeing of both corporate and residents in the state.
The President of NECA, Mr. Larry Ettah, said this in a statement obtained at the weekend.
He noted that the MPC, which he described as a critical committee, “has been unable to meet because it could not form a quorum as stipulated in the CBN Act 2007.
“We believe that the country’s monetary policy should not be left to run on auto-pilot as the outcome of the deliberation of the MPC is important to the sustainable economic growth and development of our country,” he added.
He, however, commended the federal government for the constitution and re-constitution of some Boards of Parastatals and Agencies, albeit very late.
The lateness and outright non-reconstitution of some other Boards, according to him, portends danger for good governance with negative image for the country.
Ettah pointed out that of greater concern to businesses was the non-reconstitution of critical Boards such as the Nigeria Social Insurance Trust Fund (NSITF), National Health Insurance Scheme (NHIS), PenCom, Central Bank of Nigeria, the Securities and Exchange Commission, among others.
“We had expected government to have set up the Boards by now. The absence of Boards for the parastatals is one awful legacy of the military regime that should be discarded without further delay.
Commenting further on the hike in Land Use Charge in Lagos, Ettah pointed out that the real estate sector continues to wallow in deep recession with high vacancy rates.
“How on earth would any decent authority increase taxes overnight by over 200 to 500 per cent, when in reality government should be doing more to stimulate the sector to come out of recession?
“To compound matters, there is a repugnant and odious penalty payment ranging between 125-200 per cent, if payment is not made between April and August,” he added.
In its bid to increase its internally generated revenue and expansion of its tax base, the Lagos State government recently repealed its 2001 Land Use Charge Law, and replaced the 2001 Law with a new Land Use Charge Law, 2018. The government also extended the period for the payment of all annual Land Use Charge (LUC) Demand Notices for 2018, to Saturday, April 14th, 2018.
The latter was to enable property owners and affected occupiers take the option of enjoying the discounts available for the prompt and early payment of LUC invoices.
“While we commend Governor Akinwumi Ambode of Lagos State for all his good works in Lagos, which is a model for good governance, he, however, has to realise that sensitivity and humanness is a critical part of governance.
“In reality, the new law will expect property owners in Lagos State to pay at the very minimum a monstrous, appalling and callous increase of over 200 per cent and in some instances over 500 per cent in Land Use Charge.
“It is not as if the income of a property owner has gone up significantly to justify this outrageous law,” the NECA boss added.
The law also contains a 25 per cent penalty on the LUC Demand Notice Rate not paid between 45 to 75 calendar days; 50 per cent penalty on the LUC Demand Notice Rate not paid between 75 to 105 calendar days; and 100 per cent penalty on the LUC Demand Notice Rate not paid between 105 to 135 calendar days.
Where the LUC Demand Notice is not settled after 135 days of the Tax Payer’s receipt of the Demand Notice, the Lagos State government is authorised by the LUCL to appoint a Temporary Receiver/Manager to administer the Property until all the outstanding taxes, penalties and administrative charges are paid.
“The OPS finds this law intolerable and brutish. It will do everything legal and legitimate including social resistance to challenge this unfair and unjustifiable law.
“We put the Governor on notice that this law in its current form is not acceptable and the OPS will fight this law by social resistance and any other legitimate means at its disposal to get the government to ameliorate the harsh impact of the abhorrent law on residents.
“We believe in the context of a democracy that it is important that truth be spoken to power. We hope the government will not be obdurate and see reason as to why this law is unfair as it is insufferable,” he added.
Oil Steadies, But Outlook Gloomy as Coronavirus Cases, Supply Grow
Oil prices eked out small gains on Tuesday after sharp losses, but sentiment remained subdued as a surge in global coronavirus cases hit prospects for crude demand while supply is rising.
Brent crude was up 43 cents, or 1%, at $40.87 a barrel. U.S. oil gained 43 cents, or 1.1%, at $38.99 a barrel. Both contracts fell more than 3% on Monday.
A lack of progress on agreeing a U.S. coronavirus relief package added to market gloom, although U.S. House of Representatives Speaker Nancy Pelosi said on Monday she hoped a deal can be reached before the Nov. 3 elections.
A wave of coronavirus infections sweeping across the United States, Russia, France and many other countries has undermined the global economic outlook, with record numbers of new cases forcing some countries to impose fresh restrictions as winter looms.
“We think demand from this point onwards is really going to struggle to grow. COVID-19 restrictions are all part of that,” said Commonwealth Bank of Australia (CBA) commodities analyst Vivek Dhar.
CBA expects U.S. oil to average $38 and Brent to average $41 in the fourth quarter this year.
Prices got some support from a potential drop in U.S. production as oil companies began shutting offshore rigs with the approach of a hurricane in the Gulf of Mexico.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Monday the worst is over for the crude market.
But his comment contradicted an earlier remark from OPEC’s secretary general, who said any oil market recovery may take longer than hoped as coronavirus infections rise around the world.
Meanwhile, Libyan production is expected to reach 1 million barrels per day (bpd) in the coming weeks, the country’s national oil company said on Friday, a quicker return than many analysts had predicted.
That is likely to complicate efforts by the Organization of the Petroleum Exporting Countries (OPEC) to restrict output to offset weak demand.
OPEC+ – made up of OPEC and allies including Russia – is planning to increase production by 2 million bpd from the start of 2021 after record output cuts earlier this year.
An analyst survey by Reuters ahead of data from the American Petroleum Institute on Tuesday and the U.S. Energy Information Administration on Wednesday estimated that U.S. crude stocks rose in the week to Oct. 23, while gasoline and distillate inventories fell.
Nigel Farage Urged to Highlight Perils of DIY Investing
Nigel Farage appears to be advocating a DIY approach to investing – and this could be “monumentally risky” for inexperienced investors, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The warning from Nigel Green, chief executive and founder of deVere Group, comes as a daily finance-orientated newsletter from the team of the Brexit Party leader and political activist urges its readers to “tell us about your successes by going it alone – leaving the money men and middlemen by the side of the road…”
Mr Farage’s email is provided for correspondence.
Mr Green comments: “Successful DIY (Do It Yourself) investing can be possible, but for most people it is not recommended – indeed, it could be a costly and traumatic accident waiting to happen.
“Going it alone can be monumentally risky for inexperienced investors as the complexities involved can sink their portfolios.
“Perhaps this is why around two-thirds of wealthy individuals have a professional financial adviser of some sort, according to new independent research from the University of Toronto.”
He continues: “I would urge anyone who extols the virtues of a DIY approach to investing to also underscore the risks and potential pitfalls to be avoided.”
A pro will help you make the best investment decisions in five key ways, says Nigel Green.
“First, helping you to diversify a portfolio. Spreading money around is vital to curb risk. However, it must be used correctly – diversification will only add real value if the new asset has a different risk profile.
“Second, investing with a plan: Unless you have a sound plan, you’re gambling, not investing.
“Third, avoiding emotional decisions. Overly emotional decisions can prove deadly when it comes to investments because they are blighted by prejudices and biases.
“Fourth, regularly reviewing your portfolio: Investments need to be consistently reviewed to ensure they still deserve their place in the portfolio and that they are still on track to reach your long-term financial objectives.
“Fifth, not focusing excessively on historical returns: The future investment situation is likely to be different from time-aged averages.”
The deVere CEO concludes: “While investing remains almost universally regarded as one of the best ways to create, grow and safeguard wealth, considering the pitfalls of getting it wrong, it could be an expensive mistake for you and your family not to seek professional advice.”
Top Five US Oil and Gas Firms Lost $307bn in Market Value Amid COVID-19 Crisis
Market Value of US Five Largest Companies Decline by $307bn in 2020
Even before the coronavirus pandemic, the oil and gas industry was faced with slumping prices. However, with a record collapse in oil demand amid the coronavirus lockdown, the COVID-19 crisis has further shaken the market, causing massive revenue and market cap drops for even the largest oil and gas companies.
According to data presented by StockApps.com, the top five oil and gas companies in the United States lost over $307bn in market capitalization year-over-year, a 45% plunge amid the COVID-19 crisis.
Market Cap Still Below March Levels
Global macroeconomic concerns such as the US-China trade war and the oil overproduction set significant price drops even before the coronavirus outbreak. A standoff between Russia and Saudi Arabia in the first months of 2020 sent prices even lower.
After global oil demand plunged in March, Saudi Arabia proposed a cut in oil production, but Russia refused to cooperate. Saudi Arabia responded by increasing production and cutting prices. Shortly Russia followed by doing the same, causing an over 60% drop in crude oil prices at the beginning of 2020. Although OPEC and Russia agreed to cut oil production levels to stabilize prices a few weeks later, the COVID-19 crisis already hit. Statistics show that oil prices dropped over 40% since the beginning of 2020 and are hovering around $40 a barrel.
Such a sharp fall in oil price triggered a growing wave of oil and gas bankruptcies in the United States and caused a substantial financial hit to the largest gas producers.
In September 2019, the combined market capitalization of the five largest oil and gas producers in the United States amounted to $674.2bn, revealed the Yahoo Finance data. After the Black Monday crash in March, this figure plunged by 45% to $373bn. The following months brought a slight recovery, with the combined market capitalization of the top five US gas producers rising to over $461bn in June.
However, the fourth quarter of the year witnessed a negative trend, with the combined value of their shares falling to $367bn at the beginning of this week, $6.2bn below March levels.
Exon Mobil`s Market Cap Halved in 2020, Almost $155bn Lost YoY
In August, Exxon Mobil Corporation, once the largest publicly traded company globally, was dropped from the Dow Jones industrial average after 92 years. As the largest oil and gas producer in the United States, the company has suffered the most significant market cap drop in 2020.
Statistics indicate the combined value of Exxon Mobil`s shares plunged by 52% year-over-year, falling from almost $300bn in September 2019 to $144bn at the beginning of this week.
Phillips 66, the fourth largest gas producer in the United States by market capitalization, witnessed the second-largest drop in 2020. Statistics show the company`s market cap dipped by 49.6% year-over-year, landing at $22.9bn this week.
The Yahoo Finance data revealed that EOG Resources lost over $21bn in market cap since September 2019, the third-largest drop among the top five US gas producers.
Conoco Phillips witnessed a 42% drop in market capitalization amid the COVID-19 crisis, with the combined value of shares plunging by almost $30bn year-over-year.
Statistics show Chevron witnessed the smallest market cap drop among the top five companies. At the beginning of this week, the combined value of shares of the second-largest US gas producer stood at $141.5bn, a 36.9% plunge year-over-year.
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