Business
Global stocks hit 2-1/2 month lows as EM selloff continues
LONDON – Global equities hit 2-1/2 month lows on Thursday after the U.S. Federal Reserve pushed ahead with reducing stimulus, raising concern about more emerging markets weakness and pushing investors towards safe-haven bonds.
The Fed trimmed its monthly bond-buying program by $10 billion and made no mention of the turbulence in emerging markets which some investors had thought might delay the widely-flagged policy move.
The prospect of a steady withdrawal of stimulus coupled with improving economies in the developed world has attracted funds away from many emerging markets, particularly those with current account deficits or political troubles – or a combination of the two.
“I think there is a lack of positive triggers right now, and there is a growing concern about what happens. It’s no 1998 … we have a very cautious stance on all emerging market equities and currencies at the moment,” said Hans Peterson, global head of investment strategy at SEB Private Banking.
“If you have weak fundamentals and liquidity is a little bit tighter that always shows, but it’s the weak fundamentals that are really the issue, not liquidity.”
With Brazil, Turkey, South Africa and India all holding elections this year, policymakers are likely to be wary of hiking rates too much to avoid damaging economic growth.
The vulnerabilities in the emerging world were noted by the Reserve Bank of New Zealand when it decided to hold off on raising interest rates on Thursday.
The MSCI All-Country World share index .MIWD00000PUS fell 0.4 percent to 391.22 points, hitting its lowest levels since early November and taking its losses for January so far to 4.2 percent – on track for its worst month in 1-1/2 years.
The losses were biggest in emerging markets, whose broad benchmark fell 0.8 percent .MSCIEF.
Underscoring the problems there, the HSBC PMI showed that Chinese manufacturing slipped to a six-month low for January, confirming a flash estimate released last week.
In Europe, the FTSEurofirst 300 fell 0.3 percent .FTEU3, also pressured by forecast-missing numbers from Nordic telecom operator TeliaSonera (TLSN.ST) and spirits giant Diageo (DGE.L), which led the fallers.
Some of the money leaving equities appeared to find its way into the developed world’s government bond market. German Bund futures rose 18 ticks to 143.18, while German 10-year yields fell to their lowest in nearly six months.
The Fed’s stimulus reduction also lent some support to the dollar, which gained 0.3 percent against a basket of major currencies .DXY, and analysts forecast more strength to come.
“Investors should expect further USD gains today as sentiment across emerging markets deteriorates,” analysts at Credit Agricole CIB said in a note.
“Clearly contrasting against the investor confidence seen during Q3/Q4 2013, this fragility suggests ample room remains for emerging market position-squaring from medium- and longer-term accounts. Indeed such position-squaring could provide significant benefit to safe-haven currencies like USD and JPY in the week ahead.”
A stronger dollar and weaker emerging market currencies weighed on metals prices on concerns that those resources will become more expensive for emerging market consumers.
London copper slipped to a near two-month low and gold edged lower, also hit by the weak data from China.
Oil however, steadied, with Brent holding around $108 a barrel, as cold weather across the northern Hemisphere boosted demand.
– REUTERS
The World Bank has uncovered $32 million in unaccounted funds linked to a water infrastructure project in Nigeria, raising concerns about financial mismanagement in donor-funded initiatives.
The discovery was highlighted in the bank’s recently published FY2024 Sanctions System Annual Report, which revealed significant discrepancies in the project’s financial records.
READ MORE: #OndoDecides2024: Police Chief Tours Polling Units, Collation Centres
The missing funds were earmarked to bolster Nigeria’s water infrastructure, but irregularities in accounting prompted an investigation by the World Bank’s Integrity Vice Presidency (INT).
“INT followed up on risks identified regarding a project in Nigeria’s water sector and flagged to operations the risk, which was associated with $32 million of unaccounted funds,” the report noted.
In response, the World Bank engaged with key stakeholders, including the project’s task team leader, operations manager, and financial management specialist, to recover the funds and safeguard the project’s integrity.
As part of the resolution, the Central Bank of Nigeria has been requested to reimburse $22 million. Meanwhile, $6 million remains in the project’s account to cover ongoing operational costs.
The findings underscore the importance of transparency and robust financial oversight in large-scale infrastructure projects, particularly those funded by international institutions.
The Central Bank of Nigeria (CBN) has issued a stern warning to Deposit Money Banks (DMBs) over the illegal sale of mint Naira notes to currency hawkers.
The apex bank, in a circular signed by the Acting Director of Currency Operations, Mr. Solaja Olayemi, on Friday, emphasized that erring banks would face stringent penalties.
READ ALSO: Ogun State’s Abandoned 250-Bed Hospital To Open In 2025 – Gov Abiodun
As part of its efforts to curb the abuse of the national currency, the CBN announced plans to conduct nationwide checks to seize mint notes sold by hawkers.
Banks found to have released such notes will be required to pay a fine of 10% of the value of the affected cash withdrawn from the CBN on the date in question.
Subsequent violations will attract an additional penalty incrementally increased by 5%.
The CBN also reiterated its commitment to enforcing the Clean Notes Policy, warning that banks involved in hoarding, diversion, or any actions that disrupt efficient cash distribution would face appropriate sanctions.
With the festive season fast approaching, the apex bank urged DMBs to enhance internal controls to ensure transparent cash distribution.
It highlighted the need for proper utilization of Automated Teller Machines (ATMs) to ensure easy access to new notes by the public.
Furthermore, the CBN disclosed plans to intensify its mystery shopping and spot checks, working closely with law enforcement agencies to clamp down on any practices that undermine the integrity of the Naira.
Nigeria’s inflation rate surged to 33.88% in October 2024, up from 32.7% in September, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS) on Friday.
The month-on-month increase of 1.18 percentage points marks yet another strain on the nation’s economy, with transportation and food costs cited as the main drivers of inflation.
READ MORE: Rivers, Anambra Judges Suspended As NJC Takes Disciplinary Action
Steep Year-on-Year Increase
Compared to October 2023, when the inflation rate stood at 27.33%, the October 2024 figure reflects a significant rise of 6.55 percentage points. This sustained upward trend highlights the worsening cost-of-living crisis for Nigerians.
Month-on-Month Breakdown
Inflation on a month-on-month basis also showed an uptick, rising to 2.64% in October 2024 from 2.52% in September. The faster rate of price increases further underscores the growing economic pressure on households.
Food Inflation Soars to 39.16%
Food inflation, a major component of the headline rate, reached 39.16% in October 2024, up from 31.52% in the same month last year.
The increase was driven by higher prices of staple items, including: Cereals and Tubers: Guinea Corn, Rice, Maize Grains, Yam, Water Yam, and Coco Yam. Oils and Fats: Palm Oil and Vegetable Oil. Beverages: Milo, Lipton, and Bourvita.
On a month-on-month basis, food inflation rose by 0.30 percentage points to 2.94% in October, up from 2.64% in September.
Price hikes in Palm Oil, Vegetable Oil, Fish, Meat, and Bread categories were major contributors.
Annual Food Inflation Hits 38.12%
The average annual food inflation rate over the past 12 months climbed to 38.12%, a sharp increase of 11.79 percentage points from the 26.33% recorded in October 2023.
The consistent rise in inflation, particularly food and transportation costs, continues to erode the purchasing power of Nigerians.
Nigeria’s Water Project Under Fire As World Bank Reports Missing Funds
Miss Universe 2024: Nigeria’s Adetshina Finishes Strong As First Runner-Up
#OndoDecides2024: Police Chief Tours Polling Units, Collation Centres
#OndoDecides2024: Lawmaker Applauds Peaceful Election
#OndoDecides2024: Police Seize Motorcycles, Vehicles Violating Restriction Order
#OndoDecides2024: BVAS Challenges Mar Ondo State Election
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
Oando opens ultra-modern petrol station in Lagos
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
