Banking
Barclays Sees Inflation as Stock Market Bugbear in 2014
LONDON – Barclays is warning investors to lighten up on U.S. stocks in favor of Europe and emerging markets.
Their call is rooted in the view that the Federal Reserve will face mounting pressure to tighten easy-money policies as the U.S. economy improves and inflation ticks higher.
Barclays heads into 2014 with an “underweight” view on U.S. stocks and “overweight” recommendations on shares from Europe and the emerging world, according to a research report shared with journalists Monday.
Investors have poured money into U.S. stocks funds at the fastest clip since the financial crisis this year, coaxed by the Fed’s easy-money policies that reduced the payout from bonds.
Markets were rattled starting in May when the Fed hinted that it could begin to wind down its $85-billion-per-month stimulus efforts “in the next few meetings.” Since then, the Fed has been trying to convey the message that it will continue to hold rates low even as it dismantles its bond buying program.
The story of stocks this year is that the “the market pulled forward expectations of rising rates [in May] and pushed them back again,” says Larry Kantor, BarclaysBARC.LN +0.08%’ head of research. Next year, though, “markets will start to price in inflation and ultimately tightening,” he says.
Dean Maki, Barclays’ chief U.S. economist, forecasts that the Fed will likely begin to draw down its bond-buying program in March, completing the process by September. The Fed will then likely raise rates staring in the middle of 2015, he says.
This year’s 27% gain for the S&P 500 hasn’t left the market looking exorbitantly priced, Barclays says. Rather, the biggest threat to stocks next year—ironically—is a faster-than-expected pickup in the U.S. economy. Faster growth could trigger rising wages and rents, spurring inflation that so far has been absent during the recovery.
Inflation worries would begin to put pressure on the Fed not only to “taper” but also to consider tightening its easy-money policies, says Michael Galvin, Barclays head of asset allocation research for the Americas.
Worries about tightening could stir up stock market volatility in the back half of next year, Mr. Galvin says.
And a tighter U.S. central bank policy would be at odds with the European Central Bank, which is expected to shore up their stimulus efforts. The relative cheapness of Europe’s stocks, combined with the prospect for more ECB stimulus, leaves Europe’s stocks ripe to beat the U.S. market, Mr. Galvin says.
Barclays still thinks the S&P 500 can still return 10% next year. Barry Knapp, head of U.S. equity portfolio strategy, favors owning energy producers and saying away from consumer staples and health-care stocks, which are most sensitive to rising rates.
And high-flying small-cap stocks are looking priced “on the high side,” Mr. Knapp says. The Russell 2000 Index of small caps is up 33% this year.
– WALL STREET JOURNAL
Banking
Millions of customers still stranded worldwide 24 hours after GT Bank online operations suffered attacks
By Yemie ADEOYE
GT Bank, one of Nigeria’s leading banks, with operations across Africa and the United kingdom, and with an asset base of about US$3.11 trillion is under a cyber attack which has left millions of its customers across the world stranded in the last 24 hours.
The bank which was renowned for its seamless online operations at inception has suffered dwindling online efficiency in recent years and this current attack didn’t come as a surprise to many of its numerous customers. However, it is becoming worrisome that over 24 hours after its online operations went down, the bank has not been able to arrest the situation and restore its online services.
Stranded GT Bank customers outside the banks premises
Several customers of the bank took to their X (formerly known as twitter) handles to express their frustrations at the bank, as several of the customers in the diaspora are unable to access their accounts and carry on with their transactions. A customer , Jeff55 who lamented on his X handle about the development, stated that it is a thing of shock that a bank of this size couldn’t afford to have the necessary tools and experts to ensure a full protection of its online operations in this age and time.
Another customer Dimma stated that while Cybersecurity training may seem tedious, the recent #GTBank hack is a stark reminder that everyone is just a click away from a devastating attack.
Several media organisations had reported that hackers have stolen GT Bank website, and intercepted customers Data in massive phishing operation.
At the time of filing this report, Biztellers.com.ng checks on the banks website shows that it is still down and unaccessible, and neither GT Bank media and communications unit nor any of its agencies or surrogates have commented officially on the development.
Says output surge buoyed by reforms he announced in May 2024 to address gaps in PIA
President Bola Ahmed Tinubu on Sunday declared a resurgence in the oil & gas industry, commending the increased crude production to 1.6 million barrels per day.
The president, who said this in a national broadcast, maintained that the resurgence was buoyed by the reforms he announced in May 2024 to address the gaps in the Petroleum Industry Act (PIA).
Nigeria’s crude oil output got a boost to 1.61 million barrels per day in July 2024 through the president’s directive and the industry leadership provided by the Nigerian National Petroleum Company Limited (NNPCL).
Acknowledging what he called a resurgence of the once-declining oil and gas industry in his Sunday-morning broadcast to the nation, President Tinubu said that oil investors are coming back to Nigeria.
He said; “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act. Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
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“Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for and subsidise its use. To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down.
This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80% of the imported PMS and AGO.
“We have started the distribution of conversion kits and the setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”
Plans are in top gear for the 11th Annual General Meeting (AGM) of the FBN Holdings Plc.
The management made this disclosure in a notice it filed with the Nigerian Exchange Limited (NGX) on Thursday, where it averred that it has not been served with any court order against the proposed AGM.
According to notice, which was signed by the acting Company Secretary, Adewale Arogundade, FBN Holding said, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.
“Suffice to mention that the AGM is a statutory meeting of Shareholders that must be held in accordance with the law, further to which the Company will notify the regulators and the public as appropriate if there is any lawful order to restrain the Company from conducting same.
“We hereby assure our esteemed Shareholders that the AGM shall hold on August 15, 2023, as planned and we look forward to their attendance and active participation at the meeting.”
However, court orders published in national dailies showed that the Federal High Court in Lagos had issued an order against the financial institution, barring it from holding its 11th AGM.
The order was entered pursuant to a petition by Olusegun Onagoruwa, in suit No: FHC/L/CP/1271/2022. It was addressed to the bank and some other bank officials.
It read, “Take notice that unless you obey the directives in the judicial order contained in the order made on July 15, 2022, by the Federal High Court, Lagos, by refraining from proceeding with the 11th Annual General Meeting of FBN Holdings Limited proposed for August 15, 2023, from seeking approval to issue or raise share capital in any manner whatsoever, from appointing or confirming the appointment of new directors, or in any other manner taking any step towards implementing, actualising enforcing resolution of the 10th Annual General Meeting of FBN Holdings Plc held on June 20, 2022, or in any other manner overreaching, disobeying or undermining the said order of a court, you will be guilty of contempt of court and you will be liable to be committed to prison and to there imprisoned.”
Biztellers brought you a report that a segment of shareholders had staged a protest at the headquarters of the bank on Monday, calling for the AGM to be held, as well as soliciting regulatory interventions.
It is expected that at the AGM, FHN Holdings is poised to breathe life into plans to seek shareholders’ approval to raise N150bn fresh capital via a rights issue and elect new directors including billionaire, Femi Otedola and Samson Ariyibi among other resolutions.
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