Business
Yen Slumps to Lowest in Four Years on BOJ Easing
TOKYO – The yen fell to a four-year low against the euro and weakened past 101 per dollar as Japan’s central bank kept its pledge to expand the monetary base as part of the government’s strategy to end 15 years of deflation.
The euro gained for a second week as a rise in German business confidence fueled optimism the economic recovery is gaining momentum. Australia’s dollar fell on bets the central bank will intervene to weaken the currency. Yields on U.S. debt rose to the highest in two months relative to Japan’s as the Federal Reserve signaled reduced asset purchases “in coming months.” U.S. consumer confidence is forecast to climb in November after plunging last month amid the government shutdown.
“The yen was among the under-performers in the Group of 10 this week,” Valentin Marinov, head of European G-10 currency strategy at Citigroup Inc. in London, said in an e-mail. “The dollar could remain supported against the yen from the upcoming U.S. data, as well as more signals from the Fed about the timing of tapering.”
The yen fell 1.5 percent this week to 137.28 per euro after touching 137.35, the weakest level since October 2009. The Japanese currency slipped 1.1 percent to 101.27 per dollar after reaching 101.35, the least since July 8. The shared currency rose 0.5 percent to $1.3558.
The Bloomberg U.S. Dollar Index, which tracks the currency against 10 major counterparts, rose 0.2 percent to 1,018.56.
Winners, Losers
Brazil’s real rallied the most against the greenback among its 16 most-traded currencies tracked by Bloomberg as companies made winning bids worth $9.1 billion to operate two of the nation’s busiest airports, more than three times the minimum amounts set by the government.
The real climbed 1.5 percent over the past five days to 2.2794 per U.S. dollar, its first weekly advance since Oct. 18.
The Aussie fell for a fifth week against the dollar, the longest losing streak in more than five months, after Reserve Bank of Australia Governor Glenn Stevens said in a speech on Nov. 21 that foreign-exchange intervention can be effective as long as it’s “judiciously used in the right circumstances.”
“The Aussie is looking very vulnerable,” said Ian Stannard, head of European foreign-exchange strategy at Morgan Stanley in London. “The RBA has once again focused in on the currency, citing it as overvalued. There are domestic and international reasons to be negative and we are looking for the move to continue.”
The Aussie fell 2 percent to 91.83 U.S. cents this week after touching 91.44 yesterday, the weakest since Sept. 6. The currency traded touched NZ$1.1170, the lowest versus the New Zealand dollar since October 2008.
Argentine Peso
The Argentine peso, which is regulated by the nation’s central bank, fell the most among emerging-market currencies in the last five days amid cabinet changes that included the central bank president and economy minister.
The likelihood Argentina will designate exchange rates that differ based on the transaction has jumped with the promotion of Axel Kicillof, who as deputy economy minister supported President Cristina Fernandez de Kirchner’s ban on dollar purchases for savings and import restrictions, according to HSBC Holdings Plc.
The peso slumped 1.5 percent to 6.0827 per dollar, the biggest weekly drop since March 2009. In a market used to wager on future currency values, peso non-deliverable forwards tumbled 4.7 percent to 7.1300.
Central Banks
Minutes of the Fed’s Oct. 29-30 meeting showed policy makers “generally expected” improvement in employment data that would “warrant trimming the pace of purchases in coming months.” The central bank buys $85 billion of Treasuries and mortgage-backed securities a month. The Fed next meets on Dec. 17-18.
U.S. consumer confidence rose to 72.2 this month, according to the median estimate of 58 economists in a Bloomberg survey, from 71.2 in October, the weakest reading in six months. The partial closure of federal agencies for half the month pushed consumer expectations to a seven-month low.
Japan’s central bank kept its pledge to expand the monetary base by as much as 70 trillion yen ($69 billion) a year at its Nov. 21 meeting. Nineteen of 37 economists surveyed by Bloomberg said policy makers will add stimulus in the second quarter of 2014 after a planned increase in sales tax, with seven saying it will ease in the July-September period.
‘Key Driver’
The extra yield that U.S. 10-year Treasuries offer over similar-maturity Japanese bonds expanded to 2.19 percentage points on Nov. 20, the widest level since Sept. 12 based on closing prices. It was at 2.12 percent today.
“The yield differential is a key driver of dollar-yen,” Brian Daingerfield, a Stamford, Connecticut-based currency strategist at Royal Bank of Scotland Group Plc’s RBS Securities unit, said in a phone interview. “The dollar, reacting positively towards the possibility of an earlier taper and yields moving higher, is pushing dollar-yen higher.”
Futures traders increased their bets that the yen will decline against the dollar to the most since July 2007, figures from the Washington-based Commodity Futures Trading Commission show.
The difference in the number of wagers by hedge funds and other large speculators on a decline in the yen compared with those on a gain so-called net shorts was 112,216 on Nov. 19, compared with net shorts of 95,107 a week earlier.
German Confidence
The Ifo institute’s German business climate index, based on a survey of 7,000 executives, increased to 109.3 from 107.4 in October. That was the highest reading since April 2012. Economists surveyed by Bloomberg forecast a gain to 107.7.
“This should help the euro to go higher,” said Neil Jones, head of European hedge-fund sales at Mizuho Bank Ltd. in London, referring to the German report. “Data continues to encourage, which is indicative of an improving economic trend throughout the euro zone.”
The Bundesbank said this week that the German economy remains on a “solid growth path.” Investor confidence rose to the highest level in four years in November, unemployment remained near a two-decade low in October and factory orders climbed more than economists predicted in September.
The yen has tumbled 13 percent this year, the worst performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar strengthened 3.7 percent and the euro advanced 6.9 percent.
– 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.”
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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.
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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.
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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.
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