- FG Plans Fresh Concession of Lagos-Ibadan Expressway
The Federal Government is considering a proposal to involve the former concessionaire of the Lagos-Ibadan Expressway, Bi-Courtney Highway Services Limited, in the funding of the completion and management of the reconstruction of the road.
Our correspondents gathered that the proposed arrangement would see Bi-Courtney and the new concessionaire, Motorways Assets Limited, jointly form a special purpose vehicle to source for funds, complete the project and manage the road afterwards.
It is, however, not clear if the deal, which is reportedly brokered by the National Assembly, involves an out of court settlement with Bi-Courtney, which had challenged the revocation of its concession agreement by the Federal Government.
A closed door meeting held at the office of the President of the Senate on Wednesday evening, where the executive and the legislature finalised talks on the road.
At the meeting were the President of the Senate, Bukola Saraki; Minister of Finance, Kemi Adeosun; Chairman, Bi-Courtney Highway Services Limited, Dr. Wale Babalakin; and representative of Motorways Assets Limited, Mr. Abdulrasaq Oyinloye.
Also in attendance were the Chairman, Senate Committee on Appropriations, Senator Danjuma Goje; Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Rafiu Ibrahim; and Chairman, Senate Committee on Finance, Senator John Enoh.
Both Adeosun and Babalakin declined to talk to journalists after the meeting.
But a reliable source, who was privy to the discussions at the meeting, said the plan was to remove the road from the list of infrastructure on which the Federal Government was spending most of its resources on since the concessionaire would now look for funds to complete the road.
The source, who declined to be named, said, “Following series of meetings facilitated by the Senate, the Federal Government today agreed with two private sector infrastructure companies on funding and timely completion of reconstruction work on the Lagos-Ibadan Expressway.
“They had a formal agreement on means of proceeding with the completion of the road within the most reasonable time and in a manner that is capable of creating a template for the future development of infrastructure in Nigeria.
“As part of the agreement, a new special purpose vehicle will have shareholders, including Bi-Courtney and Motorways, and the two companies are expected to collapse their current concessions into the new company.
“The Federal Government is expected to support the new consortium with financial instruments that will enable it to raise the necessary funding, the new entity must be operated to the highest standards of corporate management.”
The source noted that the objective of the concession was “to ensure that quality work is done on the road, which is said to be central to the nation’s economy, and that the work is completed in the shortest time possible.”
It was learnt that the Finance minister would take the agreement to the Federal Executive Council for approval next week, while the concession terms might be signed by the parties in two weeks’ time.
Both Bi-Courtney and Motorways, however, refused to speak on the development, while the Federal Ministry of Power, Works and Housing did not respond to enquiries by our correspondents.
Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies
Barclays to High Net Worth Clients, Stay Off Africa and Other Emerging Economies
Barclays, one of the world’s largest investment banks, has started advising high net worth clients to stay off Africa and other emerging economies.
According to Barclays, despite the recent recovery noticed in emerging-market stocks, investors are better off avoiding the risks that still abound in emerging nations. Barclays Plc, however, advised high net worth clients to focus on U.S equities despite the S&P’s breakneck rally.
The investment bank said emerging economies do not have enough fiscal buffers to spend their way out of the COVID-19 pandemic and will likely continue to struggle in the near-time compared to the US with 12 percent of gross domestic product fiscal-support.
It said the huge US stimulus may halt rebound in emerging-markets stocks as more money is expected to flow into the world’s largest economy and its European counterparts.
“Compared to the U.S., emerging-market economies appear more vulnerable,” said Haider, the London-based managing director and head of global growth markets. “Their central banks have less room to maneuver, their governments may not be able to provide unlimited support and equity markets, given their sector mix, can be more challenged by an economic slowdown.”
Barclays added that even after 33 percent rebound in stocks of emerging markets since the panic selloff subsided in March, stocks are still down by 9 percent from year-to-date while the US S&P 500 stocks are up by 45 percent. Presently, their stocks trading at a 36 percent discount to US stocks, up from 25 percent three months ago.
Crude Oil Rises to $43.1 Per Barrel on Production Cuts Extension
Crude Oil Hits $43.1 Per Barrel Following OPEC’s Production Cuts Extension
Brent crude oil, against which Nigerian oil price is measured, rose by 1.25 percent on Monday during the Asian trading session following OPEC and allies’ agreement to extend crude oil cuts to the end of July.
OPEC and allies, known as OPEC plus, agreed to extend production cuts of 9.7 million barrels per day reached in April to July on Saturday.
In the virtual conference, delegates agreed that members, including Nigeria and Iraq presently struggling to attain a 100 percent compliance level must keep to the agreement or be forced to do so in subsequent months.
Nigeria, Iraq and others failed to keep to the cartel’s agreement in May after reports show that Nigeria only managed to attain a 19 percent compliance level during the month while Iraq struggled to attain just 38 percent in the same month.
Russia and Saudi Arabia, the two largest producers of the group, warned members to stick to the agreed quota if they want to rebalance the global oil market.
“While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.
“The potential return of Libyan output could also cause considerable challenges for the OPEC leadership.”
Earlier on Monday, Brent crude oil hits $43.1 per barrel, more than a month record-high, before pulling back slightly to $42.83 per barrel.
Gold Dips by 2 Percent on Better Than Expected Job Report
- Gold Dips by 2 Percent on Better Than Expected Job Report
Gold prices declined by 2 percent on Friday following a better than expected US non-farm payroll report.
The report showed an increase of 2.5 million payroll numbers against a decline of 7.5 million predicted by many experts.
The surprise number boosted investors’ confidence in US recovery as many dumped their haven investment (gold) for the stock market.
“We had significantly stronger-than-expected U.S. payroll numbers – an increase of 2.5 million versus an expectation of a decline of 7.5 million – that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.
Spot gold immediately declined by 1.9 percent per ounce to $1,678.81 while the U.S. gold futures slid 2.6 percent to settle at $1,683.
Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.
The surprise didn’t stop there, US Dow Jones was up 614 points despite the protest going on the US and US-China tension.
Also, NASDAQ rose by 29 points while the S&P index added 50 points increase.
Note: Investors generally increase their investments in gold and other haven assets during a crisis to avert risk exposure and do the opposite once they sense a better economy.
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