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Japan’s Finance Minister Warns, Yuan Declines

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Japan’s Finance Minister Taro Aso on Monday commented on the strength of the yen and its impact on the Japanese economy.

In his words, “Recent yen gains have various impacts on exports, economic and fiscal policies and Japan’s position is that this isn’t desirable.”

“It’s natural that Japan has means to intervene,” Aso says in parliament in Tokyo.

Recent comments from both Finance Minister and Governor Kuroda have not had any slowdown effect on the currency, even though the strong yen threatens Japanese exports and gradually weakening business confidence after trading at the levels last seen in October 2014 before BOJ increased its quantitative easing program.

The minister said the agreement of G20 doesn’t include the way Japan’s government carries out foreign exchange policy and that G20 nations agree that excessive moves in the markets are undesirable.

The yen traded at 107.35 per dollar at 2:06 p.m. in Tokyo and has appreciated 12 percent in 2016.

Yuan Declines

The yuan plunged the most in a week on Monday amid speculation the currency will depreciate against the dollar if the Fed increase interest rates in June.

“As long as there is an expectation of yuan depreciating against the dollar, there will be a massive outflow of funds,” said Iris Pang, Hong Kong-based senior economist for greater China with Natixis Asia Ltd. “As long as channels under the capital account are still semi-closed, trade will remain a shadow channel for funds outflows.”

On Saturday, People’s Bank of China said its currency reserves increased by $7.089 billion dollars in April to $3.22 trillion. Only for investors to start moving money out on Monday to protect their gains.

According to China Foreign Exchange Trade System prices, the yuan fell 0.21 percent to 6.5041 a dollar as of 11:17 a.m. in Shanghai. A gauge of dollar strength climbed for the fifth day, bringing its total gains to 1.8 percent.

The offshore yuan traded in Hong Kong rose 0.04 percent to 6.5167.

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 long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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DSS Arrests EFCC, Acting Chairman, Magu

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Dss Arrests Ibrahim Magu

DSS Arrested Magu, the Acting Chairman of EFCC

The Department of State Services (DSS) has arrested the acting chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, on allegation bordering on financial misappropriation, abuse of power and embesslement.

The Acting Chairman was accused of siphoning part of the money recovered from looters, a Punch reported stated.

The report stated “It was learnt that the security details to Magu put up a stiff resistance during the arrest of their principal, as they objected to the DSS move.

But he is now undergoing interrogation at the DSS Headquarters In Aso Drive.

This is happening barely two weeks after the Attorney-General of the Federation, Abubakar Malami (SAN) reportedly complained to the President, Major General Muhammadu Buhari (retd.) about Magu’s conduct and advised that he should be relieved of his appointment.

The AGF was said to have accused Magu of insubordination and discrepancies in the figures of funds recovered by the EFCC.

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Again CBN Debits Banks N118 Billion for Failing to Meet CRR Target

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CBN Debits Deposit Money Banks N118bn for Not Meeting CRR Target

The Central Bank of Nigeria (CBN) on Friday debited the nation’s deposit money banks a total sum of N118 billion for failing to meet 27.5 percent Cash Reserve Ratio (CRR) target.

This is the fourth of such action, bringing the total amount debited so far this year to N2.2 trillion.

According to Tunde Abidoye, an analyst at Lagos-based FBN Quest, the move brings “further downward pressure on banks liquidity ratios and earnings.”

“Based on the total sum that each bank has been debited this year, and our NIM assumptions for each bank, we estimate an aggregate opportunity cost of funds of N86bn for our universe of banks coverage,” Abidoye stated in a note to clients.

The central bank continues to debit banks to force them to loan more into the real sector and also reduce their forex purchasing power to better manage the nation’s weak foreign reserves and curb capital outflow. A series of recent reports have pointed to a possible foreign exchange devaluation to ease pressure on the nation’s reserves.

The report shows that the Stanbic IBTC and Guaranty Trust Bank were debited N15 billion each.

Details later…

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Debt Market: Dangote Cement Raises N250 Billion in H1, 2020

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Dangote Cement Raises N250 Billion From Debt Market in H1 2020

Dangote Cement raised a total sum of N250 billion from the nation’s debt market in the first half of the year, according to the FMDQ Securities Exchange Limited.

In the statement published on the FMDQ website, the N250 billion debt includes the N100 billion Series 1 Bond raised under Dangote Cement’s N300 billion Bond Programme and the N150 billion Commercial Paper (Series 13-16 Domestic CP Issuance Programme) offered earlier in the year and now listed and quoted on FMDQ Securities.

Mr Michel Puchercos, the Chief Executive Officer, Dangote Cement, was quoted as saying, “This landmark transaction is the largest-ever bond issuance by a corporate issuer in Nigeria.

“It allows us to further broaden our sources of funding by accessing long-term debt at competitive costs from the capital market and builds further on the success of our domestic commercial paper programme.

“The success of these transactions, in the current challenging environment, illustrates investors’ continuous confidence in Dangote Cement’s strategy, strong cash generation and solid credit profile.”

Mr Kobby Bentsi-Enchill, the Executive Director and Head of Debt Capital Markets, Stanbic IBTC Capital Limited, said, “Stanbic IBTC Capital Limited has a long history of partnering with Dangote Cement Plc, and are delighted to have advised on this landmark corporate bond issuance, which reflects the depth and diversity of the Nigerian debt capital markets.”

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