Oil prices sank yesterday by about three percent after the United States (U.S.) President Donald Trump told the Organisation of Petroleum Exporting Countries (OPEC) prices were on the high side.
WTI Crude was down 2.58 percent at $55.78, and Brent Crude was trading down 2.39 percent at $65.64.
But foremost investment bank, Goldman Sachs, said Brent crude oil prices could reach between $70 and $75 a barrel in the near term, with an upside potential of exceeding the $67.50 a barrel forecast.
Nigeria’s budget 2019 has $60 per barrel as the benchmark.
As the oil market continues to tighten significantly, sustained rise in Africa’s largest oil producer is good as it will make cash available to fund the heavy capital component of the budget easy.
A member of OPEC, President Muhammadu Buhari had said the country would offer to cut daily production to guarantee good price.
The outlook for the oil market through the end of June this year is modestly bullish, Reuters quoted the bank as saying in a research note yesterday.
Yet, Goldman Sachs sees a possible Brent Crude jump into the $70s as fleeting, because United States (U.S.) oil exports and a possible easing of OPEC’s production cuts in the second half of the year could cap the bullish sentiment.
“The oil market will likely continue to tighten significantly this March and April,” Bloomberg quoted Goldman’s note as saying.
OPEC’s cuts and possible acceleration of Venezuela’s supply disruptions will support oil prices in the coming months, Goldman Sachs said.
“While prices could easily trade in a $70-$75 a barrel trading range, we believe such an environment would likely prove fleeting,” said Goldman’s analysts, who kept their end-of-the-year Brent Crude forecast at $60 a barrel.
Last week, oil prices hit fresh highs this year, driven by optimism that the U.S. and China will forge a trade deal and that OPEC’s resolve to rebalance the market will outweigh soaring U.S. oil production.
At the beginning of this week, oil prices fell somewhat after President Trump, once again, asked OPEC not to take too much crude off the markets.
Why we suspended election in Rivers – INEC
The Independent National Electoral Commission, INEC, has given insight into why the electoral process in Rivers State was suspended.
INEC had declared the election in the state inconclusive after suspending the collation of results for Saturday’s governorship and State Assembly elections due to electoral malpractice in the state.
However, INEC explained that the electoral process in the state was called off due to violence and threat to life.
The explanation was contained in a statement signed by the Chief Press Secretary to INEC Chairman, Mahmoud Yakubu, Rotimi Oyekanmi.
The statement reads partly: “In Rivers, the Commission was forced to suspend the election due to violence and threats to life, as a result of which it constituted a Fact Finding Committee to assess the situation and report back within 48 hours.
“In a couple of other states where a declaration was not immediately made, the elections did not meet the threshold required for such a declaration.
“The Commission will take the appropriate action prescribed by the law and make a declaration.”
CBN: $42.5b foreign reserves cover 13-month imports
The $42.5 billion foreign reserves as at December last year is enough to guarantee 13-month import cover for the country, a report by the Central Bank of Nigeria (CBN) has shown.
The stock of external reserves as at end-December 2018 stood at $42.5 billion, indicating a depletion of 0.03 percent when compared with the level in the preceding quarter. However, when compared with the corresponding period of 2017, it indicated an accretion of 8.2 percent.
According to the CBN, the level of external reserves could finance approximately 13 months of imports, compared with 10.3 and 15.6 months of imports cover recorded in the preceding quarter and the corresponding period of 2017, respectively. These were, however, above the West African Monetary Zone (WAMZ) and global benchmarks of six and three months, respectively.
It said portfolio investments inflow to the economy decreased significantly to $1.38 billion in the fourth quarter of 2018 from $1.79 trillion and $3.78 trillion in the preceding quarter and the corresponding period of 2017, respectively. However, other investment liabilities increased to $1.42 trillion when compared with a reversal of $3.07 trillion recorded in the preceding quarter.
Direct Investments inflow decreased by 28.3 percent to $314.44 million when compared with the preceding quarter of 2018. It however, indicated a decline of 67.2 per cent when compared to the corresponding period of 2017.
Provisional fourth quarter 2018 Balance of Payment estimates for the Financial Ac- count showed a overturn from a net incurrence of financial liabilities of $4,615.17 million recorded in third quarter 2018 to a net acquisition of financial assets of $2327.91 million in the review period. This is also significantly lower than the net acquisition of financial assets of $3,528.62 million recorded in the corresponding period of 2017.
Net out-payments for services during the review period increased by 16.5 percent to a deficit of $8,287.57 million when compared with the level recorded in third quarter 2018. When compared with the corresponding period of 2017, it indicated a much higher increase of about 76.9 per cent.
However, the deficit in the income account (net) decreased by 10.8 per cent to $3,713.84 million in the review period from a deficit of $4,161.76 million recorded in the preceding quarter. When compared with the level in the corresponding period of 2017 it indicated an increase of about 24.5 percent.
MTN to list on NSE
Africa’s telecoms giant, MTN Group, yesterday said it would list on the Nigerian Stock Exchange (NSE) in the first half of this year.
This is coming on the heels of its recording very positive trade numbers in the 2018 fiscal year. MTN Group’s balance sheet showed total revenue of 37.971billion South African Rand (the equivalent of about N965.3billion), a statement from the firm indicated.
It said: “MTN plans to list by the introduction on The Nigerian Stock Exchange during the first half of 2019 and is looking to simplify the capital structure ahead of this listing.
“The company’s listing on the Exchange will create a new telecoms asset class for investors and provide an opportunity for a wider group of Nigerians to participate in our investment story.
“This will be achieved via a listing by an introduction and will be followed by a public offer once market conditions are conducive. Over time, and subject to market conditions, we anticipate that the participation of Nigerians in the ownership of the business will increase from around 20 percent to 35 percent.”
The telecom giant also announced a $1 billion divestment programme over the next three years that will slim down its operation and refocus it on high-growth markets on the continent and in the Middle East.
Shares in the company surged 15 percent to 87.39 rands, on course for their biggest one-day rise in since 2008.
During the year under review, MTN Nigeria increased its mobile subscriber base by another six million people, bringing its tally to 58 million subscribers nationwide.
CEO, MTN Nigeria, Ferdi Moolman, said: “In 2018 we rebuilt the base; adding another six million Nigerians to our network, giving a total of 58 million people access to worldwide communication services.
“This growth was built on our sustained focus on customer-centric delivery – ensuring that customers get much more value for their money.
“This included the deployment of proactive interventions to improve customer experience, together with the enhancement of network quality and coverage, and the optimization of our services portfolio.
“We also enabled an additional 8 million people to access the possibilities that the internet provides, bringing our total data subscriber base to 44 million, of which 18.7 million use more than five megabytes per month.
EFCC, CBN collaborate on anti-graft
Officials of the Central Bank of Nigeria (CBN) and their counterparts from the Economic and Financial Crimes Commission (EFCC) Thursday met with the aim of strengthening the fight against economic crimes.
The CBN Governor, Mr. Godwin Emefiele, had a few weeks ago revealed that both institutions would be collaborating to expose banks, importers or organizations that collude with corrupt individuals to flout its policy on the restriction of foreign exchange (forex) to 43 items.
The meeting, which took place in Abuja, according to a statement issued yesterday by the apex bank’s Director of Corporate Communications, Mr. Isaac Okorafor, provided an opportunity for the two entities to share experiences and peculiar challenges in the fight against economic-related crimes.
It said: “The two agencies adopted strategies aimed at curtailing the unwholesome activities of economic saboteurs, which include smuggling of commodities like rice, textile materials, fertilizer, wheat and other items on the prohibition list for accessing foreign exchange through an official window, as well as tracking illicit financial flows.
“Other areas which the two agencies are collaborating include anti-money laundry and the monitoring of politically exposed persons in the country.”
According to the statement, the inter-agency meeting, chaired by the Director, Governors’ Department of the CBN, Mr. Jeremiah Abue, also agreed to improve the level of information-sharing and surveillance of the financial sector.
Emefiele had pointed out that given the remarkable success that had been achieved in stimulating domestic production of goods such as rice, cassava and maize, as a result of the restrictions placed on access to forex for the 43 items, the central bank intends to vigorously ensure that the policy remains in place.
He said additional efforts would be made to block any attempts by unscrupulous parties (both individuals and corporate) that intend to find other avenues of accessing forex, in order to import these items into Nigeria.
He warned: “The CBN’s Economic intelligence and Banking Supervision Departments will work very closely with the EFCC to expose and sanction any bank, company and or its directors or forex operator who colludes with unscrupulous individuals/companies to undermine the policy on 41 items.
“Such sanctions will include, but not limited to prohibiting all the banks in Nigeria from maintaining any bank accounts for any such institutions or persons in Nigeria.
“If you are caught as an individual or a company, we are saying that, that bank, that company and the individuals, that the central bank would prohibit all the Nigerian banks at the same time, from maintaining any bank account for you.”