Fidelity bank card banner Emerald Energy Institute Camano banner

Buhari’s govt. not yet functioning —Bloomberg

By News Express on 07/07/2015

Gmail icon

Views: 3,166


Nigeria’s new government under President Muhammadu Buhari is not yet functioning, Bloomberg, a leading global source of economic intelligence, has said.

 According to Bloomberg.com in a story yesterday entitled ‘A Nigeria Without Chiefs Makes Top Paying Bonds Less Attractive’: ‘Nigeria has attractive bond yields and a fast growing economy with a young population. For investors, it’s missing a key ingredient: a functioning government.’

The report said: “More than a month since taking charge of Africa’s largest economy, President Muhammadu Buhari is yet to choose ministers; an announcement the 72-year-old former military ruler said he may postpone until September. That’s left the continent’s biggest oil producer and most populous nation without a finance chief to steer a Treasury he said is ‘virtually empty’ amid calls for a currency devaluation.

‘Investors’ actions in the capital markets are an answer to that political void. An index of naira bonds declined 2.6 percent in dollar terms over the past month.”

According to Barclays Plc and Rand Merchant Bank, “That compares with average losses of 0.2 percent across 31 emerging markets. And while Nigerian rates of 14.9 percent are the highest among those nations, foreigners are staying clear until they know Buhari’s plans for the exchange rate and budget.”

 “You can’t ignore the yields on offer in Nigeria, except for when there’s a lack of clarity on policy,” Ridle Markus, an analyst at Barclays, said by phone from Johannesburg on July 2, adding “It creates further uncertainty as to what the cabinet will look like, what decisions the finance minister will take.”

Nigerian stocks dropped 9.3 percent since Buhari’s April 2 win over Goodluck Jonathan in a March presidential election, the sixth-worst performers globally among 93 primary indexes tracked by Bloomberg. He was sworn in on May 29 following a campaign in which he promised to crush Boko Haram’s insurgency in the north east and clamp down on corruption.

The new government suffered the deadliest week since taking office last week after attacks in the Borno State claimed at least 150 lives.

“So far he has articulated few ideas on how to revive an economy ravaged by an almost 45 percent drop in Brent crude prices over the past year, Angus Downie, Head of economic research at Ecobank Transnational Inc., said by phone from London on July 2.

Nigeria’s government relies on oil for roughly two-thirds of its revenue. Growth will decelerate to 4.8 percent in 2015, about half the average of the past decade, according to the International Monetary Fund. That’s still faster than the global average of 3.5 percent and 4.3 percent for developing nations.

‘Some Nominations

‘The naira fell 21 percent between the end of June 2014 and Feb. 12, when it dropped to a record low of 206.32 against the dollar. That prompted the central bank to extend foreign-exchange trading curbs to prop up the currency. While those have steadied the naira at an average of 199.03 since March, they have left it overvalued, according to investors, including Investec Asset Management and BlackRock Inc.

The naira weakened 0.1 percent to 199.20 per dollar as of 11:43 a.m. in Lagos on Monday.

Still, Nigeria’s population, where 44 percent of its 177 million are under the age of 15, according to data compiled by Bloomberg, augurs well for long-term growth. In the euro region, less than 16 percent of people are under 15, while in the U.S. the figure is 20 percent.

A delay in naming a finance minister means it may take longer for investors to find out whether currency restrictions will be removed, according to Joseph Rohm, a money manager at Investec Asset Management, which oversees about $110 billion.

 “We need a devaluation and strong appointees in the government for the market to go up,” Rohm said by phone from Cape Town last month.

‘Bonds and equities surged after Jonathan conceded defeat to Buhari, easing investors’ concerns about a disputed result in a country that had never seen a peaceful change of power from one party to another. Yet, as well as plans for the currency, investors now want to know whether the government will remove gasoline subsidies and how it will diversify the economy from oil.

 “We’re still sitting in the dark,” Zoran Milojevic, a trader at New York-based brokerage Auerbach Grayson & Co., said by phone. “The only positive thing is that Nigeria didn’t spiral into a civil war. That’s not enough to push the market.”

Average bond yields have climbed almost 100 basis points from 13.91 percent since May 14.

There probably won’t be a rally until Buhari outlines how he will improve Nigeria’s economy, says Ronak Gopaldas, an analyst at Rand Merchant Bank, a unit of FirstRand Ltd., Africa’s biggest bank by market value.

 “People thought by now they’d have some kind of clarity,” Johannesburg-based Gopaldas said by phone on July 1.

He added, “They’re looking for a decisive message about what Buhari’s going to do to arrest the economic decline. It’s something that needs to be done sooner rather than later.” ’

Photo shows President Buhari.

 

Source News Express

Posted 07/07/2015 03:42:53 AM

 

 

CLASSIFIED ADS

 

You may also like...
WANEP expresses deep concern over rising conflicts in...

NIMASA D-G calls for peace, security in Niger...

Doctors discover 526 teeth in boy’s mouth

ALGON chiefs chased out of office

10 Chibok schoolgirls stranded in America

Clearing agents protest planned eviction from office by...

HURIWA berates FG for romancing violent Fulani herdsmen...

Parties kick as INEC announces Edo governorship election...

Tinubu vs AIT: Court adjourns till April 1...

Offa Robbery: Absence of witnesses stalls suspects’ trial...

Contempt: Court asks IGP to produce Zamfara CP,...

Warri-Abuja rail line to gulp N1.4 trillion —...

 

Latest News Khafi evicted from #BBNaija reality show Boko Haram now stronger, well armed - New York Times Notorious Lagos cultist, rapist arrested Visiting family friend ‘drugs, rapes’ teenager 43 arrested over illegal activities in Lagos Shipwreck: Police confirms 36 people missing Akwa Ibom first lady discloses plan to expose rapists Budget 2020: Hard times beckon as oil prices drop IPOB alleges genocide plot in Kanu’s home Wonder Bank defrauds Sapele residents over N20m 95 per cent of properties in Edo don’t have C of Os – Official Nigeria’s Muhammad-Bande set to resume as president of UN General Assembly

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (540,112 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (442,766 views) Shameless Genevieve Nnaji exposes breasts in public (389,034 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (326,496 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (294,456 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (253,535 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (249,576 views) 10 cars more expensive than Jets (238,186 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (231,338 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (217,322 views) Lagos plane crash: Journalist releases victims’ names (195,727 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (193,337 views)

 

CBN milk production

CBN banner advert

UBA Wise Savers Promo

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (102) Business & Economy (4,443) Business Verdict (80) Columnists (1,108) Complaints & Requests (96) Enterprise & Opportunities (215) Entertainment (664) Features (809) Global Business Monitor (441) ICT Monitor (63) International (3,948) Interview (203) Live Commentary (30) Love Matters (170) Maggie's Blog (410) News (51,318) Opinion (1,357) Pidgin (17) Politics (11,439) Religion (1,102) Sports (2,166) Stock Watch (39) AMA & Al Jazeera Global Update

 

 

 

 

 

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera