Author: Businessam Staff

Crude prices were little changed in early action on Wednesday, steadying below the more than three-year highs reached the previous session, as investors looked ahead to fresh weekly data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise.

New York-traded West Texas Intermediate crude futures tacked on 2 cents to $67.72 a barrel by 08:10GMT. The U.S. benchmark rose to $69.55 last week, the highest since Nov. 28, 2014.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., ticked up 5 cents to $73.91 a barrel. The global benchmark climbed as high as $75.47 in the last session, a level not seen since Nov. 27, 2014.

The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended April 20 at 14:30GMT, amid forecasts for an oil-stock drop of around 2.0 million barrels.

Analysts also forecast a fall of 625,000 barrels for gasoline stockpiles, while distillate inventories are expected to drop by 861,000 barrels.

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by roughly 1.1 million barrels last week.

The API report also showed a drop of 2.7 million barrels in gasoline stocks, while inventories of distillates fell by 1.9 million barrels.

There are often sharp divergences between the API estimates and the official figures from EIA.

 

In other energy trading, gasoline futures were flat at $2.093 a gallon, while heating oil was steady at $2.128 a gallon.

Natural gas futures shed 0.3% to $2.804 per million British thermal units.

WhatsApp, a freeware and cross-platform messaging and Voice over IP service, announced it will increase the current age requirement for EU users as the messaging service updates its rules to meet forthcoming General Data Protection Regulation (GDPR), which comes into force on 25 May.

The app will ask users to agree to new terms of service in the coming weeks and confirm they are aged 16 years or over, although it is not clear how the new rule will be enforced. The current minimum age for users is 13 years.

GDPR aims to give people more control over how companies use their information and the right to have their data erased. The regulation also includes rules to protect children from having their data collected or employed to create user profiles.

In a blog, WhatsApp explained it “established an entity within the European Union to provide your services there and to meet the new high standards of transparency for how we protect the privacy of our users.”

“In the coming weeks, you will be able to download and see the limited data that we collect. This feature will be rolling out to all users around the world on the newest version of the app,” it added.

The age limit will remain at 13 years in the rest of the world, as is the case with most social media apps including Snapchat and Twitter.

Meanwhile, parent Facebook is taking a different approach to young users. It said those aged 13 years to 15 years will need to get permission from a parent or guardian for their information to be shared on the platform. Otherwise, they will not see a fully personalised version of the service.

Facebook began its GDPR privacy rollout last week. Though European users will be the first to gain access to new privacy controls from the company, the settings will be eventually extended to all 2 billion users.

The world’s third-biggest processor, Olam International Ltd. has indicated rising consumption will probably flip the global cocoa market into a shortage next season, according to a newswire report seen by business a.m.

Demand is rising and some producing countries including Indonesia are struggling to boost output, Gerry Manley, head of cocoa at the Singapore-based company, said in an interview at the World Cocoa Conference in Berlin. The market is seen close to balanced in the season that ends in September.

Cocoa futures tumbled in the past two years as top grower Ivory Coast produced a record crop and global supplies overwhelmed consumption. The lower prices have ignited demand, with processing rising more than five percent last season and possibly growing as much as four percent in 2017-18, Manley said.

“It’s more likely to be a deficit year at this moment in time given where consumption is,” he said. “You do need the supply to come into the market and there are definitely one or two areas which are struggling.”

Futures have rebounded more than 30 percent this year after falling to a multi-year low of £1,322 ($1,847) a metric tonne in January. Prices are now at a level that’s more manageable for most players in the market, Manley said

“Below £1,850, I think you see that cocoa becomes difficult for many producing countries, for many farmers,” he said. “The good thing with the low prices is that it’s stimulating consumption and stimulating in a very strong way.”

Demand has been strong for cocoa butter, used to make chocolate, but also for other products such as liquor and powder, according to Olam, which expects the trend to continue over the coming months.

“We believe consumption is still strong and we see consumption occurring in other areas of the business, it’s not just chocolate,” Manley said. “Consumption is shifting into dairy, into ice creams, into bakery goods.”

Ivory Coast will produce about two million tonnes of cocoa this season, slightly below the 2.1 million tonnes of a year earlier, Olam forecasts. Neighboring Ghana, the second-largest grower, will harvest about 800,000 tons and output is unlikely to grow next season.

“The issues there are probably more on fertilizers and pesticides management rather than the crop itself, and that is why we are not really seeing Ghana grow too much,” Manley said. “We are not expecting a major upsurge in production next year either.”

The President Lagos Chamber of Commerce and Industry (LCCI), Babatunde Ruwase, has urged private investors to scale up their participation in health financing, saying the target to minimize global incidence of malaria and mortality rates could not be achieved by government and international donor agencies alone.

Ruwase who spoke at the chamber’s forum marking World Malaria Day also urged the government to implement strategies towards creating a conducive investment atmosphere for more private sector participation.

The programme was organised in collaboration with the Nigeria Liquified Natural Gas (NLNG) and had in attendance the latest winners of the Nigeria Prize for Science.

“With $2.7 billion invested globally to fight malaria in 2016, this represents less than 41 per cent of the estimated $6.5 billion needed annually till 2020 in order to reach the 2030 global malaria targets. In 2016, there were 216 million cases of malaria in 91 countries, five million more than the 211 million cases reported in 2015.

Malaria deaths in Africa accounted for 407,000 cases out of the global number of 445,000 in 2016, according to WHO statistics,” he said.

Citing World Health Organisation report that pregnant women, infants, children under five years, patients with HIV/AIDS and mobile population were more vulnerable to the infection, he said special national strategies were necessary to protect these groups of the populace.

Akpoveta Susu, a professor and chairman, Advisory Board of the Nigeria Prize for Science, said the collaboration between LCCI and NLNG was to support the attainment of a malaria-free and healthy population that would deliver innovation and productivity needed to develop the country.

According to him, stakeholders should explore the possibility of commercial production of research findings by creating avenues that promote optimum utility, thereby realising the main reason for establishing the prize.

He said the science prize competition for 2018 would focus on ’Innovations in Electric Power Solutions,’ to evolve scientific solutions to the country’s power challenges.

“I can say that the Nigeria Prize for Science has placed great scientific innovations on the front burner in the country prompting other remarkable research works apart from the Malaria research works,” he said.

Susu said that the winner for Nigeria Prize for Science would get $100,000, adding that the competition was open to scientist and researchers worldwide to assist in finding solutions to Nigeria’s problem.

The African Development Bank (AfDB) says Africa loses about $50 billion annually to illicit financial flows out of the continent.

Ebrima Faal, director, AfDB, Nigerian office, disclosed this Tuesday in Abuja at workshop on the role of parliament in combating illicit financial flows from Africa.

According to him, these estimates may well be lower than actual outflows as accurate data do not exist for all African countries.

“Estimates on illicit financial flows are highly disparate due to differences in methodologies,” he said, adding that current estimates suggest Africa could be losing more than $50 billion annually in illicit financial flows.

“This is about the same size as total FDI or total remittance flows and slightly higher than overseas development assistance (ODA),’’ he said

He noted that some discrete forms of illicit financial flows are excluded and not easy to track or estimated.

Commenting on the objectives of the workshop, he said it was to review the challenges of and learn from the good practices adopted by experts in their fight against illicit financial flows, adding that part of the objectives was also to share experiences in recovering the proceeds of crime from criminals.

He also said the workshop seeks to explore the role that parliamentarians can play in facilitating the work of the practitioners,’’ he said.

Faal noted that the role of the parliaments in promoting economic recovery and sustainable development was fundamental.

He said parliaments had the constitutional mandate to both oversee government and to hold government to account.

“They also play a primary role in promoting good economic and financial governance through effective oversight of the public budget and expenditure management.

“ It is a vital democratic institution serving as a bridge between the state and society. In carrying out its legislative, oversight and representative roles, Parliaments help strengthen good governance for enhanced growth and poverty reduction.

“ In this regard, the African Development Bank is committed to support the capacity building of African Parliaments, to help strengthen their oversight function,’’ he noted.

Adeyemi Dipeolu, special adviser to the vice president on economic matters said studies had proved that illicit financial flows had negative impact to the African economies.

He said that such outflows had reduced availability of resources for development; undermine efforts to ensure growth and development, adding that they had also weakened international cooperation in Africa as well as contributing to austerity measures witnessed in the region and triggering negative effect on growth

He called on the parliamentarians to ensure good legislation to put to an end the act in the region and institute transparency and accountability in the system.

The Federal Mortgage Bank of Nigeria has made a refund of over N9 billion to 200,000 retirees who made contributions to the National Housing Fund, established to enable Nigerian workers, especially civil servants own their own houses, according to Ahmed Dangiwa, the bank’s managing director,

Dangiwa said every NHF contributed by civil servants was refundable with interest once they attained 60 years as a high poverty rate of 70 percent has hindered many Nigerians from owning their own houses.

Dangiwa made this known at the Affordable Housing Summit organised by Zvecan Homes and Estate with the theme: “Attracting Foreign and Local Investors, for Housing Construction and Acceptable Business Models for Infrastructure Development and Equity Plan Scheme for Mortgage Financing In Nigeria’’, held on Tuesday in Abuja.

Dangiwa, represented by Oladapo Fakeye, said the summit was critical to bridging housing deficit in Nigeria, as it would generate solutions for the development of Nigeria’s housing sector while he called on the government to prioritise housing for low-income earners as many Nigerians could not afford to own a house.

Abdullahi Abubakar, the governor of Bauchi State said Nigeria needed 700 million houses before 2050 based on the UN projection that population growth will increase to 400 million by 2050.

He noted that Bauchi had a backlog of 600 housing units as many housing projects were abandoned for about 15 years but the abandoned houses had been completed and would be allocated in May and the state plans to address the unemployment challenge through the housing.

United Bank for Africa Group (UBA) has released its unaudited first quarter results, showing significant growth across major income lines with a profit before tax of 26.6 billion, representing a growth of 4.3 percent over the N25.5 billion recorded in the corresponding period of 2017.

The results released Tuesday, April 24, 2018, indicate an impressive 18 percent year-on-year growth in gross earnings in the reporting period.

Leveraging strong growth in both interest and non-interest income, UBA grew top-line to N119.4 billion in the first three months of the year, just as profit after tax stands at N23.7 billion, representing a 6.2 percent year-on-year growth when compared to N22.4 billion achieved in the corresponding period of 2017.

The group also recorded 18% return on average equity (RoAE).

Kennedy Uzoka, the group managing director/CEO of the United Bank for Africa (UBA), expressed satisfaction with the Bank’s impressive performance in the first quarter of 2018, despite intensifying competition and moderation in yield environment in Nigeria and Ghana.

“This set of the first quarter result is a good start to the year and a reflection of our capacity to sustainably grow earnings over the medium to long-term. We recorded 18 percent growth in gross earnings, as both interest and non-interest income grew 18 percent and 19 percent respectively.

“Notwithstanding the moderation in sovereign yield in Nigeria and Ghana, we achieved a 60bps improvement in net interest margin (NIM) to 7.6 percent, as we extract efficiency gains from balance sheet management,” Uzoka said.

He added: “I am particularly pleased with the 8 percent year-to-date growth in our retail deposit, as it reflected the benefit of improved customer service and continued customer acquisition. We are committed to exceeding our 2018 deposit growth target in the year, with a strategic focus on retail, low-cost savings and current accounts, which is critical to sustaining our NIM uptrend.”

He said the bank is committed to responsible lending, as it seeks to maintain its asset quality.

“We achieved a 40bps year-on-year savings in cost of risk, a reflection of the quality of our loan portfolio.”

He expressed confidence on the steady recovery of the Nigerian economy and improving fundamentals of most African countries, where the bank operates.

Uzoka emphasized the increasing relevance of its African operations to its bottom line, adding that, “reflecting our market share gain, we have grown the balance sheet by 6% in the first three months of the year, as we increasingly become systemically important across the 19 other African countries, where we operate. Barring unforeseen circumstances, we look forward to sustaining this strong performance through the year, with the primary objective of delivering superior return to our shareholders.”

Also speaking on the bank’s financial performance and position, Ugo Nwaghodoh, the group CFO, said management is committed to delivering on the group’s financial goals for the year.

“We are diligently executing our priorities for the year, as we focus on profitable growth. We are making strong progress in Nigeria, where our continuous market share gain is translating into higher profit. We grew non-funded income by 20%, driven by annuity-type offerings in digital banking. Precisely, the electronic banking income grew 33% year-on-year and we recorded an impressive 40% growth in trade service income, as customers become loyal ambassadors of our enhanced service channels and customer service,” he said.

He said he was pleased that the bank’s drive towards optimal scale across its subsidiary operations is progressing well and that more importantly is the contribution of the foreign operations to the Group’s profit, which he said was impressively reflective of geographic diversification.

“We remain resolute on our determination to leverage growing scale across our foreign operations to extract further cost efficiency, with the objective of moderating our cost to income ratio. More so, our profitability in the first quarter of the year reinforces the Group’s capacity to deliver on target, as our profit for the period translates to 18% return on average equity” Nwaghodoh said

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The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has introduced a portal that would upgrade and connect the business activities of the MSMEs to the global market.

The portal would connect artisans to more clients, create jobs, improve proficiency through capacity building and assist to eradicate quackery among artisans and professionals in skills like mechanics, welders, barbers and others, were eligible to register on the platform that would cut across all states of the federation.

Umaru Dikko, director-general, represented by Yinka Fisher, Lagos State Coordinator, SMEDAN, said the project was done in collaboration with Global Sight Services Ltd, at the unveiling of the www.Naijaquickfix.com, an online advertising platform for certified artisans in the country on Tuesday in Lagos.

Dikko said Lagos artisans were used for the pilot scheme of the project that would have millions of artisans registered on the platform in the next two years.

Olayinka Oladunjoye, Lagos State commissioner for Commerce, Industry, and Cooperatives, said Lagos State recognised the massive contribution of the MSME sector to economic development and the government would spare no costs in engendering the sector’s market visibility through online and traditional business promotion channels.

Oladunjoye, represented by Helen Adesina, deputy director in the ministry, said the introduction of the portal is a new channel of exposing and connecting MSMEs with their counterparts and customers in the global market space.

Bargain hunting in market bellwethers – NESTLE (+5.0%) and ZENITH (+2.6%), as well as DANGSUGAR (+2.2%), helped halt two-day bearish performance at the Nigerian equities market Tuesday.

The local bourse rebounded with the benchmark index, the NSEASI, gaining 10bps to settle at 40,802.78 points while year-to-date (YTD) return strengthening to 6.7 percent.

Accordingly, market capitalization gained N14.0 billion to improved to N14.7 trillion.

Despite the bullish performance, activity level weakened as volume and value traded dipped 20.3 percent and 57.1 percent to 246.6 million units and N3.2 billion respectively. Top traded stocks by volume were TRANSCORP (35.4m), ZENITH (24.6m) and CAVERTON (19.6m) while GUARANTY (N805.3m), ZENITH (N682.3m) and STANBIC (N263.1m) were the top traded stocks by value.

Sector performance was largely bullish as three of five sectors under watch closed in the green. The oil & gas index was the top gainer, up 0.8 percent due to buying interest in FORTE (+10.2%). The consumer goods index, inched 0.7 percent higher on the back of gains in NESTLE (+5.0%) and DANGSUGAR (+2.2%).

Similarly, the banking index appreciated 0.5 percent as investors took positions in ZENITH (+2.6%), UBA (+0.9%) and ACCESS (+0.9%).

On the other hand, the industrial goods index led laggards shedding 0.4 percent as a result of sell-offs in WAPCO (-0.8%) following the negative Q1 2018 earnings report released the previous day.

Lastly, the insurance index lost 0.4 percent on account of price depreciation in CONTINSURE (-4.8%) and MANSARD (-2.5%).

Investor sentiment as measured by market breadth (advance/decline ratio) increased to 1.0x from 0.8x recorded in the previous session as 26 stocks advanced against 25 decliners.

The day’s top performers were FORTE (+10.2%), HONEYFLOUR (+6.0%) and NESTLE (+5.0%) while FIDSON (-9.6%), JBERGER (-5.0%) and CHAMPION (-5.0%) were the worst performing stocks.

In line with analysts’ expectations, the market performed positively on the day, driven by investor reaction to positive Q1 2018 results. The analysts specifically see market performance being dictated in the near term by Q1 earning releases.

Higher oil revenues have failed to lift stocks in the past one and a half months, just as full year earnings season doing little to move the market up.

However, analysts see Dangote Cement, the largest company in the NSE by market capitalization, reporting a 29 percent rise in profit after tax in Q1 2018, being a major catalysts going forward to drive stocks higher.

Three windows of Nigeria’s foreign exchange market benefited from a Central Bank of Nigeria intervention Tuesday, that was essentially aimed at maintaining exchange rates stability, business a.m. has learnt.

The intervention value was put at $210 million.

This intervention is the third time within a week that the apex bank would be stepping in to cool nerves in the country’s forex market windows, suggesting pressure build-up on the demand side, as the political climate begins to settle itself ahead of next year’s elections, say analysts who spoke to business a.m. on the latest intervention.

In a statement it issued Tuesday, the CBN said it had intervened in the wholesale window to the tune of $100 million, Small and Medium Enterprises (SME) segment to the tune of $55 million and the invisibles segment also to the tune of $55 million, bringing the total intervention to $210 million.

Last Tuesday, the bank intervened similarly in the same windows of the market to the tune of $210 million.

Isaac Okorafor, CBN’s acting director, corporate communications department said the interventions, like the ones done previously, were in line with the apex bank’s commitment to sustain the high level of stability in the forex market and continually ease access to the currency by those requiring it for genuine activities.

Okorafor said the CBN was prepared to inject funds into the market, whenever and wherever necessary, in order to maintain market stability as well as sustain the financial system.

The CBN, he said, was drawing confidence from recent gains in the foreign exchange sector, which has seen the country’s reserves rise near the $50 billion mark.

The country’s reserves continued to enjoy accretion, Okorafor said, adding that the status of the present reserve at the bank meant that the CBN was capable of sustaining foreign exchange liquidity in the system.

The intervention followed a naira/dollar exchange rate of N361/$1 at the bureau de change (BDC) window of the market.

Last Friday, April 20, 2018, the CBN injected $396.18 million to intervene in the Retail Secondary Market Intervention Sales (SMIS).