CAPITALDIGEST, DAILY NEWS 4TH OCTOBER 2021

MONDAY 20/9/2021 – CRUDE OIL PRICE TO HIT $90 PER BARREL IN 3 MONTHS — EXPERTS As the prices of crude continue to leap, due mainly to shortages in the United States and recovery from the coronavirus pandemic, experts have predicted further rise to $90 per barrel, from $78 in the global market. An energy analyst with Goldman Sach Group, Damien Courvalin, said: “While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts. “Brent could hit $90 a barrel by year-end as the market is in a bigger deficit than many realise. “This deficit will not be reversed in coming months, in our view, as its scale will overwhelm both the willingness and ability of Organisation of Petroleum Exporting Countries, OPEC+ to ramp up.” Also, an energy expert Dr Bala Zaka, said: “With the successful vaccination and other initiatives against the coronavirus pandemic, there are indications that the demand for crude oil would continue to increase, thus causing prices to rise. “Consequently, I am optimistic that the market would witness much stability, even as OPEC+ continues to find lasting solutions to issues affecting the market.” However, in its September 2021 Monthly Oil Market Report, MOMR, OPEC, stated: “World oil demand growth in 2021 remains unchanged from last month’s assessment, showing growth of 6.0 mb/d despite some offsetting revisions. “Oil demand in 3Q21 has proved to be resilient, supported by rising mobility and travelling activities, particularly in the OECD.   TUESDAY 28/9/2021 – STOCK TRADING VOLUME CRASHES BY 78%, INVESTORS LOSE N51BN Stock market activities on Monday declined as trading volume and value of shares dropped by 77.99 per cent and 73.49 per cent respectively, with investors losing N51.03bn as trading ended. The Nigerian Exchange Limited, formerly Nigerian Stock Exchange All-Share index dropped by 0.25 per cent to close at 38,864.33 basis points from 38,962.28bps. The market capitalisation of stocks also dropped from N20.30tn the previous trading day to N20.25tn. The volume of shares traded on the exchange was 139.45 million shares valued at N1.71bn in 3,539 deals compared to 633.52 million shares worth N6.45bn in 3,2228 deals. The NGX Industrial and Insurance indices decreased by 1.10 per cent and 2.34 per cent respectively while other sectoral indices gained. Sovereign Trust Insurance Plc topped the traded stocks in terms of volume, accounting for 13.68 per cent of the total volume of trades while MTN Nigeria Plc was the most traded stock in value terms occupying 27.15 per cent of the total value of trades on the exchange. Market sentiment as measured by market breadth was positive as 20 equities appreciated in price while 12 companies saw losses at the end of trading on the floor of the NGX. University Press Plc led the gainers as it rose by 9.80 per cent o N1.12 per share. Transcorp Hotels Plc followed closely with a 9.70 per cent gain to N5.43 per share.   WEDNESDAY 29/9/2021 DIGITAL CURRENCIES WILL REDUCE CROSS-BORDER PAYMENT COSTS –BIS The Bank for International Settlements has said digital currencies will reduce the cost of cross-border payments. BIS said this in a report titled ‘Inthanon-LionRock to mBridge: Building a multi CBDC platform for international payments’. According to the BIS, CBBCs can reduce the process speed of cross-border payments from three to five working days to only a few seconds. The bank made this claim as part of the conclusion it drew from phase two of Project Inthanon-LionRock involving the central banks of China, the United Arab Emirates, and the Hong Kong Monetary Authority. BIS said, “The prototype demonstrates a substantial increase in cross-border transfer speed from days to seconds, as well as the potential to reduce several of the core cost components of correspondent banking.”   THURSDAY 30/9/2021 – FOREX SCARCITY: BDCS FEAR N300BN LOSS, JOB CUTS More than two months after the Central Bank of Nigeria stopped the sale of forex to its licensed Bureau de Change operators, workers in the sector are being laid off over scarcity of forex, findings have revealed. Operators in the sector have also estimated that their losses could hit N300bn if the situation deteriorate further. To salvage the deteriorating situation, the operators are seeking other means of survival by seeking permission to get involved in diaspora remittances business. The President, Association of Bureaux De Change Operators of Nigeria, Alhaji Aminu Gwadabe, confirmed the crisis in the BDC sector to our correspondent. He said, “The majority of the licensed BDCs are in dire zero of supply sources since the CBN policy on the discontinuation of sales of forex with the attendant consequences of job losses in several thousands of both direct and indirect employment with a capitalisation value of N300bn to fade away. “This is indeed worrisome and the reason for the consistent advocacy of ABCON for CBN to include BDCs in remittances.” The CBN was supplying $10,000 to each BDC twice a week before the forex supply cut. The CBN declared its decision after expressing disappointment that the BDCs had defeated their purpose of existence to provide forex to retail users, but instead, had become wholesale and illegal dealers. However, since then, the naira had fallen by about a margin of about 40 to the dollar as it was bought and sold for N575 and N580 on Tuesday in the parallel market.   FRIDAY 1/10/2021 – CBN SHIFTS ENAIRA LAUNCH, SAYS NO CAUSE FOR ALARM The Central Bank of Nigeria on Thursday announced the postponement of the planned unveiling of the country’s digital currency, e-Naira. The Spokesman of the CBN, Mr Osita Nwanisobi, announced this in a statement on Thursday titled ‘CBN defers eNaira launch to mark independence anniversary’. Nwanisobi explained that the CBN took the decision to postpone the launch, which had been initially planned to coincide with the independence anniversary, in deference to the mood of national rededication to the collective dream of one Nigeria. While assuring that there was no cause for alarm, he said the CBN and other partners were working round the clock to ensure a seamless process that would be for the overall benefit of the customer, particularly those in the rural areas and the unbanked population. Highlighting the benefits of the eNaira, Nwanisobi said that Nigerians would be able to carry out peer-to-peer transfer to another person’s eNaira wallet as well as pay for goods and services at selected merchants. He added that the eNaira would also help reduce the use of cash and ensure stability of the Nigerian economy. On the readiness of banks and other financial institutions in the financial ecosystem for the launch of the eNaira, he said the eNaira was a journey, and that not all bank customers were expected to commence transaction on the day of the launch. He, however, assured that financial institutions in Nigeria remained key actors and were a critical part of the CBDC. Nwanisobi also noted that the CBN was mindful of concerns expressed about the eNaira, being among the first CBDCs in the world. According to him, the bank had put a structure in place to promptly address any issue that might arise from the pilot implementation of the eNaira.