Business
Dollar Snaps Four-Day Advance on Services Report; Won Tumbles
WASHINGTON – The dollar fell for the first time in five days, ending its longest rally in two months, after a report showed services unexpectedly declined in December.
The euro climbed from a one-month low against the dollar as industry data confirmed the region’s services output expanded for a fifth month before the European Central Bank discusses interest rates on Jan. 9. South Korea’s won tumbled on bets the central bank will cut borrowing costs. South Africa’s rand gained after Moody’s Investors Service said the country will retain its investment-grade credit rating.
“There was a bit of dollar weakness off that data,” Alan Ruskin, the New York-based global head of Group of 10 foreign-exchange at Deutsche Bank AG, the world’s largest currency trader, said in a phone interview. “Over the year, we’re still constructive on the dollar” as the U.S. economic outlook improves.
The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, dropped 0.2 percent to 1,023.87 at 5 p.m. in New York after climbing to 1,029.67 on Jan. 2, the highest since Sept. 9. It completed a six-day rally on Nov. 1.
The dollar fell 0.3 percent to 1.3629 per euro after rising to $1.3572, the highest level since Dec. 5. The greenback slid 0.6 percent to 104.22 yen, while the Japanese currency advanced 0.3 percent to 142.04 per euro.
Won Tumbles
South Korea’s won weakened the most in six months against the dollar the dollar, dropping 1 percent to close at 1,065.42. The currency jumped 7.2 percent against the greenback in the past six months.
The strong won is contributing to tighter monetary conditions that may hurt the recovery and prompt the central bank to cut its policy rate at a meeting this week, Goldman Sachs Group Inc. said in an e-mailed note.
“The early trend to the year appears to have been to liquidate or take profit on trades that did quite well through the second half of 2013,” said Jonathan Cavenagh, a strategist at Westpac Banking Corp. in Singapore. The won still looks “expensive” at these levels, he said.
South Africa’s rand gained as Moody’s said in an e-mailed report that the nation’s debt levels are “manageable” and a pickup in demand from Europe and the U.S. is “promising” for growth in 2014. The nation’s rating will probably remain in the Baa range “for the foreseeable future,” it said. Moody’s rates South Africa Baa1, the third-lowest investment level, with a negative outlook.
The rand climbed 1 percent to 10.6496 per dollar after sliding to 10.76 on Jan. 3, the weakest since November 2008. The currency tumbled 19 percent last year.
Yen Shorts
The yen gained after dropping 14 percent in the past 12 months for the worst performance among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar climbed 3.8 percent and the euro advanced 8.4 percent, the best performer.
Hedge funds and other large speculators trimmed bets the yen will weaken from almost a seven-year high, according to data from the Commodity Futures Trading Commission. The difference in the number of wagers on a decline in the currency compared with those on a gain — so-called net shorts — was 135,228 as of Dec. 31, compared with 143,822 a week earlier that was the most since July 2007.
Service Industries
The dollar declined against most major peers as the Institute for Supply Management non-manufacturing index decreased to 53 last month from 53.9 in November, a report from the Tempe, Arizona-based group showed today. The median projection in a Bloomberg survey of 69 economists was 54.7. Estimates ranged from 53 to 57.7. Readings above 50 indicate growth in the industries that make up 90 percent of the economy.
“The ISM data was just one thing — U.S. data has been surprising on the upside,” said Thanos Vamvakidis, a currency strategist at Bank of America Merrill Lynch in London. “In the short term, euro-dollar will stay in the current range. Looking forward, as tapering continues, and even as the ECB remains on hold, the euro will gradually weaken.”
Official data last week showed U.S. manufacturing expanded for a seventh month in December, while jobless claims fell by 2,000 to 339,000 in the period ended Dec. 28.
Fed Taper
Fed officials said Dec. 18 they would trim monthly purchases of bonds to $75 billion from $85 billion starting this month. The central bank will probably reduce its quantitative easing in $10 billion increments over the next seven meetings, before ending the program in December 2014, according to the median estimate of economists surveyed by Bloomberg on Dec. 19.
The euro rose for the first time in three days against the dollar as Markit Economics said its services index, based on a survey of purchasing managers, was 51 last month from 51.2 in November. That’s in line with an initial estimate on Dec. 16. A reading above 50 indicates expansion.
Europe has a “better balance of payments, lack of stimulus, external demand amid tightening periphery spreads,” Geoffrey Yu, a senior currency strategist at UBS AG in London, said via e-mail message, explaining investors’ cautious optimism on the European economic recovery.
– BLOOMBERG
The need for stronger regional collaboration, government-private sector synergy, and innovative market solutions to unlock Africa’s economic potential has been brought to the fore.
Group CEO of the Nigerian Exchange Group Plc (NGX Group), Temi Popoola, shed light on the transformative potential of Africa’s capital markets at the launch of the Ethiopian Securities Exchange (ESX).
The NGX Group’s strategic investment in ESX underscores its leadership in advancing Africa’s capital market infrastructure. “The launch of ESX represents a pivotal moment for Ethiopia and the broader African financial landscape,” Popoola stated. “ESX will serve as a crucial mechanism for capital formation and market liquidity, driving sustainable economic growth.”
ALSO READ: Cybercrimes Act Abuses: SERAP Drags FG, States To ECOWAS Court
Expounding on NGX Group’s investment rationale, Popoola highlighted Ethiopia’s immense market potential and the shared vision of fostering economic growth through innovation. “Our partnership transcends traditional investment parameters,” he explained. “It is about ensuring that ESX evolves into a key player in Africa’s financial ecosystem, enabling cross-border investments and setting benchmarks for market development.”
Popoola also drew parallels with global success stories like India, which has leveraged its capital markets to achieve significant economic transformation. He emphasized the importance of responsible market opening to attract local and continental capital. “By following this path, Ethiopia can become a financial hub in Africa,” he remarked.
Prime Minister Abiy Ahmed lauded the launch of ESX as a transformative milestone in the country’s journey toward economic modernization. “Today, we have officially rung the bell to launch the Ethiopian Securities Exchange, our nation’s first stock exchange,” the Prime Minister announced on X. “This is a call to global investors: Ethiopia offers immense potential, a fast-growing economy, and a clear trajectory toward shared prosperity.”
CEO of the Ethiopian Securities Exchange, Tilahun Esmael Kassahun, expressed confidence in the partnership with NGX Group. “We are pleased to welcome NGX Group as a strategic partner, building upon the existing support we continue to receive from them,” he said. Kassahun also emphasized the value of NGX Group’s expertise in shaping ESX’s growth and success.
Drawing from NGX Group’s six decades of experience, Popoola shared insights on diversifying financial instruments and expanding access to investment opportunities. “With the right mix of innovation, policy support, and regional collaboration, Ethiopia’s capital market can play a transformative role in driving economic development and establish itself as a leader in Africa’s financial ecosystem,” he concluded.
With the ESX poised to redefine Ethiopia’s financial landscape, NGX Group’s involvement highlights the critical role of partnerships and shared expertise in advancing Africa’s economic narrative.
The Office of the Auditor-General of the Federation has uncovered financial irregularities amounting to ₦514 billion in the 2021 operations of the Nigerian National Petroleum Company Limited (NNPC Ltd).
The revelations were contained in a comprehensive audit report highlighting non-compliance and internal control weaknesses within Ministries, Departments, and Agencies (MDAs) during the 2021 financial year.
READ MORE: Powerful 6.8-Magnitude Earthquake Hits China, Dozens Killed
Breakdown of Infractions
The audit detailed four major financial discrepancies within NNPCL:
“Irregular Deductions: A total of ₦343.64 billion was deducted from domestic crude oil sales at source without proper documentation.
“Sinking Fund Deposits: ₦83.66 billion, categorized as miscellaneous income, was retained in a sinking fund account.
“Unauthorised Refinery Deductions: ₦82.95 billion was deducted from federation revenue purportedly for refinery rehabilitation.
“Unsubstantiated Payments: ₦3.75 billion was flagged for transactions related to petrol sales that lacked proper verification.
The Auditor-General’s report stated that these financial activities violated the 1999 Constitution and the Financial Regulations Act of 2009, underscoring significant lapses in compliance with statutory guidelines.
According to the report, NNPCL generated ₦484.73 billion from domestic crude oil sales in March and May 2021.
However, ₦343.64 billion was deducted for various purposes, including “Value Shortfall,” “Strategic Stock Holding Cost,” and “Pipeline Maintenance.”
The deductions were made unilaterally by NNPCL without adequate documentation or justification.
Additionally, the report flagged ₦50 billion of the net payable amount for May 2021 as unaccounted for, creating a significant gap in the federation’s revenue.
“Audit observed from the review of NNPC SAP payment record for March and May 2021 payments that the sum of ₦484.73bn was the gross amount generated for the sale of domestic crude for the months of March and May 2021.
“The sum of ₦343.64bn from the gross amount was unilaterally deducted from the gross domestic crude sales as NNPC Value shortfall, Strategic Stock Holding Cost, Crude Oil and Products Pipeline Losses, as well as the pipelines maintenance and management costs.
“The details of each of the cost components deducted were not provided for audit review. Hence, the reasons for the deductions could not be justified by the management.”
On the unremitted ₦50 billion from May 2021, the report noted: “In the month of May, the net payable that could have been remitted ought to have been ₦127.075bn, but only the sum of ₦77.075bn was remitted, leaving an unremitted balance of N50bn to the Federation Account, which has remained unaccounted for.”
The report attributed these anomalies to weaknesses in NNPCL’s internal control systems, warning of the risks they pose to public funds.
It read, “The above anomalies could be attributed to weaknesses in the internal control system at NNPC, now NNPC Ltd. This is a potential loss of Federation revenue, diversion of public funds, or misapplication or misappropriation of funds.”
The success of the maiden edition of the Lagos Shopping Festival (LSF), Africa’s first 72-hour non-stop commerce and entertainment event has been credited to the Governor of Lagos State, Babajide Sanwo-Olu.
This is the view of Managing Director/Chief Strategist of Chain Reactions Africa Ltd, Israel Jaiye Opayemi, one of the main organisers of the event.
According to Opayemi, though Chain Reactions Africa conceptualised the event, the festival could be rightly described as the Governor’s baby and owes its success to his leadership. “Firstly, the Lagos Shopping Festival could not have come to fruition if the Governor did not buy into our audacious plan when we first presented the idea to him during the Covid-19 pandemic in 2020. Secondly, it was the Governor’s exemplary leadership of the project as its Chief Marketing Officer which attracted the buy-in of key sponsors like Zenith Bank, Tolaram Group, First Bank Plc, and Guinness Nigeria Plc,” Opayemi revealed.
ALSO READ: Tinubu Okays Bulletproof SUVs, Medical Benefits, Others For Retired Army Generals
While the duo of Zenith Bank and First Bank provided their bank on wheel platforms for buyers at the Lagos Shopping Festival, they also supported the Vendors with special Point of Sale Machines with which to process payments from buyers. The banks were also seen marketing their diverse banking products to guests within the shopping arena.
For Tolaram, it was a time to support the citizens and give back to society. Guests at the Lagos Shopping Festival were freely given some of the products of the group such as PowerOil, Indomie and Kellogg’s packaged into goodie bags and given out to prospective buyers at the shopping arena. The Children’s Arena was however activated by Indomie with the children entertained by Santa Claus within a well-equipped arena manned by the Indomie Brands team and the Lagos State Safety Marshalls. The children were daily treated to free Indomie meals daily and given various gifts to go home with.
On its part, Guinness Nigeria came through as the real life of the Nigerian party by organizing product sampling activation for the teeming guests at the festival using brands such as Singleton, Johnnie Walker, Ciroc, Don Royale and Captain Morgan to deliver pleasant experiences to guests aside from Guinness and Malta Guinness.
While unveiling the identity of the festival last month, Governor Babajide Sanwo-Olu had thanked the management of Zenith Bank Plc, Tolaram Africa Group, Guinness Nigeria Plc and First Bank of Nigeria for supporting the idea of a Lagos Shopping Festival, describing it as a value addition on the state’s tourism calendar and the overall efforts to grow the State’s GDP. The Governor further said, “I must specially acknowledge your pioneering sponsorship role. It is easy for a corporate sponsor to jump on the sponsorship band wagon of an already established festival and fund it. But you are supporting the maiden edition of this Lagos Shopping Festival with us. The competition is watching you now. Do not build this brand with us and yield the space for the competition to take over. I do hope you would all commit long term to this brilliant initiative.”
On his part, Girish Sharma, CEO Guinness Nigeria Plc, expressed enthusiasm for the initiative. “Lagos is the commercial heartbeat of Nigeria and Africa’s entertainment capital, and the Lagos Shopping Festival captures its essence. We see opportunities in this initiative because it is a creative fusion of commerce and entertainment. This partnership reflects our dedication to fostering economic opportunities and support the nation’s vibrant entertainment industry.”
A first-of-its-kind, the festival was a convergence of commerce and entertainment, bringing together buyers and sellers in the MSME ecosystem, and hordes of fun-seekers who were entertained with thrilling performances by A-list entertainers, including Adekunle Gold, Wande Coal, Teni, Young Jonn, BNXN, Ayo Maff, SB Live and EmmaOMG. The list also included some of Nigeria’s most sought after DJs such as DJ Neptune, DJ YK Mule, DJ Baddo while Gbenga Adeyinka the 1st and Larry J dished out rib-cracking comedy performances.
Held from 23rd to 25th Day of December 2024, at the iconic Mobolaji Johnson Arena, Onikan Stadium, Lagos, the Lagos Shopping Festival saw thousands of fans throng the main venue and select Lagos malls during the three-day period to bag the latest bargains from local and top global brands.
Fire Razes Goods Worth Billions At Nkwo Nnewi Market
ASUU Rejects Proposal To Phase Out TETFund, Warns of Education Crisis
Atiba 9 Rejects Owoade’s Appointment As Alaafin Of Oyo
Alleged N33.8bn Fraud: EFCC Presents Four More Witnesses Against Mamman
390 Nigerian Migrants Repatriated From Niger Republic
May D Claims He Was Bigger Than Wizkid, Davido
OSSG Raises Alarm Over Murder Plot By APC Chieftain
NCC, SMEDAN, NAICOM, SEC, Others Set for SUPERNEWS SMEs Conf June 13
Sahara’s Tonye Cole resigns from GPHCDA
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
Oando opens ultra-modern petrol station in Lagos
