UPDATE 1-Speculators pare back long U.S. dollar bets for 2nd straight week-CFTC, Reuters – Reuters

Jan 20 Speculators reduced long bets on the U.S. dollar for a second straight week, as investors continued to pare back overextended positions on the greenback and worried about U.S. President Donald Trump’s trade and currency policies.

The value of the dollar’s net long position was $24.44 billion in the week ended Jan. 17, from $24.95 billion the previous week, according to data from the Commodity Futures Trading Commission released on Friday and calculations by Reuters.

Net short contracts on the Mexican peso, meanwhile, rose in the latest week to 73,321, the largest since early October. (Reporting by Gertrude Chavez-Dreyfuss, editing by G Crosse)

Dollar falls as investors unpack inauguration speech – Reuters

By Dion Rabouin | NEW YORK

The dollar edged down on Friday as investors were underwhelmed by the limited scope of executive actions and the lack of concrete policy reforms in the inauguration speech of newly sworn-in U.S. President Donald Trump.

Investors had been looking to Trump’s first address as president to highlight his plans for fiscal spending, tax cuts and regulatory reforms. Instead, Trump focused his remarks on his “America first” policies that were short on specific proposals.

“To the extent you could read into that, you might think markets were expecting something more optimistic and they heard a little bit of pessimism, a little negativity,” said Chris Zaccarelli, chief investment officer at Cornerstone Financial Partners in Huntersville, North Carolina. “The market is waiting to take its cues from actual policies as opposed to potential or proposed policies.” 

The dollar index .DXY, which tracks the greenback against six major currencies, was little moved immediately following Trump’s remarks, but trudged downward as investors unpacked the speech and saw news of the executive actions.

“Trump’s speech focused on protectionism and the markets rejected the idea that protectionism is going to be the new president’s central focus because protectionism means trade wars, which is not good for the (dollar),” said Kathy Lien, managing director of BK Asset Management.

The dollar index .DXY fell 0.3 percent. It has risen about 3 percent since Trump’s Nov. 8 election victory, but has shed about 1.3 percent so far in January on growing concerns about Trump’s protectionist rhetoric and recent comments about his dissatisfaction with the strong dollar.

Analysts also noted the protests in Washington in which about 90 people were arrested as prompting investor uncertainty.

The dollar fell against the euro EUR=, Japanese yen JPY= and British pound GBP=, touching session lows against each at around 3 p.m. The dollar was lower against each currency for the week as well.

The Mexican peso briefly trimmed early gains during Trump’s speech, but strengthened again after the president did not detail measures that could specifically affect Mexico. The peso rose 1.8 percent against the dollar, its largest one-day percentage gain since November.

The peso has weakened significantly in the new year, touching a new all-time low of 22.03 pesos per dollar on Jan. 11.

(Reporting by Dion Rabouin, additional reporting by Sinead Carew; Editing by Richard Chang and Chizu Nomiyama)

Belgian companies see new commercial opportunities in Nigeria – The Guardian

The Belgian Ambassador to Nigeria, Mr Stephane De Loecker, on Friday said that it was imperative for Nigeria to create a more friendly investment environment to sustain herself as an investment destination.

Loecker told the News Agency of Nigeria (NAN) in Lagos that his government was determined to help its companies come and explore new business frontiers in Nigeria.

The Envoy, however, said that the current choices of Belgian companies’ investment in Nigeria, as determined by the companies,would be ‘strictly commercial’.“Overseas investment is a commercial choice that companies make after noting certain considerations. This means that Nigeria, as an investment destination, must sell itself.

“As for encouraging further investment in Nigeria, Belgium is determined to help her companies find new business frontiers, and Nigeria remains the biggest economy in Africa.

“Unfortunately, the Belgian government cannot ‘make’ more of its companies come and invest in Nigeria as such choices are strictly commercial ones, and up to the companies themselves to decide,’’ he said.

According to him, there is the possibility of Belgian high-level economic missions to Nigeria in the coming years. Loecker said that for more foreign investment to come into Nigeria,the government needed to examine the country’s position in the World Bank’s “Ease of Doing Business’’ publication.

The Ambassador also said that as much as his government supported free market conditions, it believed that FOREX and import controls were not favourable to free market conditions.

He added that Nigeria’s current FOREX and import controls, were affecting both Nigerian and foreign businesses.

The Envoy also said that the signing of the ECOWAS-EU Economic Partnership Agreement would greatly facilitate trade between Nigeria and Belgium, as well as countries of the EU.

Interbank rates, currency to strengthen on expected liquidity – Businessday

Interbank rates, which increased last week, may strengthen while the naira/dollar exchange rate is expected to strengthen on the back of expected liquidity in the financial market. 
Traders foresee interbank rate dropping below the double-digit this week on anticipation of budgetary disbursal to government agencies.
On the side of the foreign exchange, more dollar supply to Bureau De Change (BDC) by the International Money Transfer Operators this week will help shore up the value of naira.
The foreign reserve on Friday rose to $27.44 billion from $27.38 billion as of January 18, 2017, according to data from the Central Bank of Nigeria (CBN).
Last week, the local currency traded at N497 per dollar until Thursday when it depreciated further, losing by N1 to close at N498 per dollar. This represented 0.20 percent compared with N497 it closed the previous day at the parallel market.
Naira also lost N0.25k or 0.08 percent against the US dollar at the interbank spot foreign exchange market. It closed at N305.50 on Thursday and Friday, as against N305.25k on Wednesday, data from the FMDQ revealed.
The weekly movements in most dated forward contracts at the interbank OTC segment suggests future stability of the naira viz-a-viz the US greenback amid an increase in the foreign exchange reserves – external reserves increased week-on-week by 2.29 percent to $27.38 billion as of Wednesday, January 18.
The 1-month, 3-month, 6-month and 12-month forward contracts were stable at N320.18/USD, N330.537/USD, N346.07/USD and N378/USD, respectively. However, despite the $7.5 million intervention sales by CBN to banks during the week, the spot rate depreciated to N305.50/USD.
“We expect further moderation of the naira/USD exchange rate,” analysts at Cowry Asset Management said.
At the money market segment of the financial market, the interbank lending rate rose to close at 11.5 percent on Friday, up from 7 percent last week as payments for bond and treasury bills purchases drained liquidity from the money market. On Wednesday, Nigeria raised N214.95 billion ($704m) from local currency bonds at its first auction this year, with payment for the bonds due on Friday.
Last week, CBN auctioned treasury bills via primary market, viz: 91-day bills worth N36.786 billion (Stop Rate, SR, fell to 13.89 percent from 14%), 182-day bills worth N39.175 billion (SR fell to 17.25% from 17.50%) and 364-day bills worth N193 billion (SR fell to 18.65% from 18.68%). Also in the secondary market, CBN sold bills worth N208.98, viz: 143-day bills worth N27.97 billion and 297-day bills worth N181.01 billion.
The outflows more than offset inflows from maturing bills via primary market, viz: 91-day bills worth N36.786 billion, 182-day bills worth N39.175 billion and 364-day bills worth N120 billion; in addition to maturing 185-day bills worth N33 billion.
Consequently, interbank rates increased across all the tenor buckets amid liquidity strain – NIBOR for overnight funds, 1month, 3 months and 6 months increased w-o-w to 11.63% (from 9.08%), 17.73 percent (from 16.94%), 19.12% (from 17.91%) and 22.21% (from 21.99%) respectively. Meanwhile, Nigerian Interbank Treasury Bills True Yields (NITTY) fell for most of the maturities amid sell offs – yields on 3 months and 6 months maturities fell to 14.38 percent (from 14.47%) and 18.79 percent (from 19.14%) respectively. However, yield on 1-month rose to 17.03% (from 16.47%).
“We expect interbank rates to moderate on the back of anticipated improvement in financial system liquidity from expected FAAC disbursements,” the analysts said.

FAAC: Monthly Allocation Increases By 13 Billion Naira – Channels TV

The federal allocation committee says monthly allocation to the three tiers of government has increased by 13 billion naira from the month of December, 2016.

Speaking with journalists after the monthly Federation Account Allocation Committee (FAAC) meeting in Abuja, the Minister of Finance, Mrs Kemi Adeosun, said that a total of 400 billion naira has been disbursed to the federal, state and local government level for the month of December.

Mrs Adeosun said that the sum of 248 billion naira gross statutory revenue received, is higher by 8 billion naira compared with the 240 billion naira received in the month of November, 2016.

The Minister further explained that there was a revenue decline of 65 million dollars in federation export sales due to a drop in the volume of crude oil export of 1.390 million barrels.

NBS: Nigeria Imported Petroleum Products Worth N2.58tn in 2016 – Reuters

By James Emejo in Abuja

The total value of imported petroleum products for 2016 stood at N2.58 trillion, the National Bureau of Statistics (NBS) stated yesterday.

A breakdown showed 18.8 billion litres of premium motor spirits (PMS), 4.89 billion litres of automotive gas oil 

(AGO) and 713.79 million litres of household kerosene (HHK), valued at N2.01 trillion, N505.8 billion and N70.7 billion respectively, were imported into the country last year.  

Furthermore, petroleum products importation gulped N790.4 billion in the fourth quarter of the year under review (Q4 2016).

The breakdown for the last quarter indicated 4.83 billion litres of PMS; 1.00 million litres of AGO and 182.9 million litres of HHK valued at N629.6 billion; N136.1 billion and N24.7 billion respectively were imported into the country.

According to the Petroleum Products Imports Statistics for 4th Quarter 2016, which was released by the statistical agency, the month of May 2016 recorded the highest volumes of premium motor spirits (PMS) imported at 2.02 billion litres valued at N249.88 billion. 

This coincided with the May 11th, 2016 official announcement by the Federal Government on the deregulation of PMS importation aimed at improving its supply nationwide.

According to the report, State-wide distribution of truck-out volume for Q4 2016 showed that 4.83 billion litres of premium motor spirits 

(PMS), 1.00 billion litres of automotive gas oil (AGO) and 182.95 million litres of household kerosene were distributed nationwide during the period under review.

Meanwhile, the average monthly landing cost of petrol in October N132.6 per litre; N121.7 per litre in November and N136.71 per litre in December with 1.43 billion litres;  1.65 billion litres and 1.74 billion litres respectively imported in Q4.

Farmers seek tracking of Nigeria’s cocoa beans exports – Thisday

By Ife Ogunfuwa

Cocoa farmers under the aegis of Cocoa Association of Nigeria have asked the government to reintroduce the CAN stamp on all cocoa exports. 

This, according to them, will ensure that all cocoa beans originating from the country are tracked and properly certified as Nigerian exports and not any other African country’s.

While suggesting ways through which Nigeria can become Africa’s largest cocoa producer and exporter in Lagos on Friday, the President, CAN, Mr. Sayina Riman, said that most cocoa exporters sold Nigerian cocoa beans through other countries’ ports in order to have unfettered access to their export proceeds.

Riman said a review of the forex policy on the repatriation of export proceeds would discourage this practice.

He added that stakeholders who understood the cocoa production cycle should be allowed to participate in improving farm output.

In a review of the cocoa production ranking by the International Cocoa Organisation, Nigeria dropped to the seventh position from fourth as one of the top cocoa producers globally.

According to the ICCO statistics, in the 2013/2014 season, Nigeria occupied the fourth position based on its estimated production output of 230,000 metric tonnes after Côte d’Ivoire, Ghana and Indonesia.

Riman, who said that the 2015/2016 season yielded about 275,000 metric tonnes for the country, expressed optimism that the new planting season would yield between 280,000 metric tonnes and 300,000 metric tonnes provided the production factors were favourable.

This shows that cocoa production in the country rose by 17 per cent from 235,000 metric tonnes in the 2014/2015 planting season to 275,000 metric tonnes in the 2015/2016 season.

Meanwhile, the Federal Government has pledged to ensure that the country becomes Africa’s largest cocoa producer and exporter.

The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, during the inauguration of the Cocoa Re-launch Committee, pledged that the country would soon take over from Cote D’Ivoire as the largest cocoa producer in the world.

According to him, with the inauguration of the Dr. Olayiwola Oluwole-led committee, Nigeria will leave its current seventh position among the world cocoa producing countries’ ranking.

Firm unveils software to ease insurance industry demand for Forex – The Guardian

An Information Technology and Software Development Company, ATB Techsoft Solutions Limited, has unveiled a unique software called “Ultisure” to bridged gaps in insurance operations and other businesses.

The Chief Executive Officer of ATB Techsoft Solutions Ltd., Mr Abiodun Atobatele, at the unveiling on Friday in Lagos, said the solution would revolutionize insurance operations in the country.

“The software would also place the industry at the same level with its counterparts in other climes,” he said.

He said Ultisure was suite for Insurance Policy Administration, stressing that with the flexibility and robustness, insurers are at liberty to create insurance products irrespective of the complexity and commence operations immediately.

He noted that the software handled core insurance processes and had additional features that complimented these processes and could be decoupled as independent systems.

“We are very proud of what we have achieved with this solution we are releasing to the market.

“It is as a result of seven years of dedication, hard work, research and investment which could not have been achieved without software architects.

“What we have done is to offer software solutions of higher standard and functionality to the market at a much lower cost,” he said.

“This means Nigerian organisations do not have to spend hundreds of thousands of dollars to procure Software abroad,” he said.

Atobatele noted that available data from the National Office for Technology Acquisition and Promotion (NOTAP) showed that organisations in the country spent over 1billion dollars annually to procure Software.

“Our unique solutions are coming at a time to ease Nigerians business demand for forex.

“The only way we can create thousands of technology jobs in Nigeria is when the government enforced existing laws and regulations on Local Content.

“The government should also make it compulsory for companies to buy Software developed in Nigeria by Nigerians.”

According to him, the software is disaster recovery ready, it also provides support for generating quotes and proposals, and converts proposals to policies.

FAAC allocates N400bn to FG, states, LGs – Punch

Ifeanyi Onuba, Abuja

The Federation Account Allocation Committee on Friday allocated the sum of N400bn to the three tiers of government as statutory distribution for the month of December 2016.

The amount, when compared to the N386.87bn shared in the month of November, represents an increase of N13.12bn.

Addressing journalists shortly after the FAAC meeting, which was held at the headquarters of the Federal Ministry of Finance in Abuja, the Minister of Finance, Mrs. Kemi Adeosun, said the N400bn was distributed under four sub-heads.

They are statutory allocations, where the sum of N224.88bn was allocated; Value Added Tax, N79.27bn; exchange gain, N52.84bn; and excess Petroleum Profit Tax, N42.99bn.

From the statutory allocations, the minister said after deducting the cost of collection to the revenue generating agencies, the Federal Government got N105.76bn; the states, N53.64bn; and local government councils, N41.35bn.

In addition, she said the sum of N15.5bn was given to the oil producing states based on the 13 per cent derivation principle.

For VAT allocation, the minister said the Federal Government received N11.4bn; the states, N38bn; while the local government councils got N26.63bn.

Adeosun said during the month, the sum of N248.71bn was generated as gross statutory revenue, adding that this was higher than the N240.1bn received in November by N8.59bn.

The minister stated that the balance in the Excess Crude Account currently stood at $2.45bn.

A communique issued at the end of the meeting stated that the force majeure declared at the Forcados, Qua Iboe and Brass crude oil export terminals affected revenue negatively.

For instance, it stated that there was a revenue decline of $65.4m in federation export sales due to a drop in crude oil export volume by 1.39 million barrels.

The Chairman, FAAC Commissioners’ Forum, Mahmoud Yunusa, said the states would work with the Federal Government to address the current recession in the country.

Yunusa, who is also the Commissioner for Finance in Adamawa State, said that the target of the states now was to generate enough revenue internally to pay salaries.

He gave an assurance that once this was done, whatever allocation received from the Federation Account would be used by the states for capital projects.

Nigeria interbank rate jumps on cash payments for bond purchases – Reuters

LAGOS Jan 20 (Reuters) – Nigeria’s interbank lending rate rose to close at 11.5 percent on Friday, up from 7 percent last week as payments for bond and treasury bills purchases drained liquidity from the money market, traders said.

On Wednesday, Nigeria raised 214.95 billion naira ($704 mln) from local currency bonds at its first auction this year, with payment for the bonds due on Friday. 

Traders said the lending rate jumped on Friday as some banks scrambled for cash to pay for bonds and treasury bills.

The naira weakened slightly at the open in the unofficial market to 498 to the dollar against 497 previously as inadequate greenback supply pressured the local currency.

The local currency, however closed flat at the official interbank window at 305.50 to the dollar, the level it has traded at since August last year.

Travelex, an international money transfer firm, sold around $20 million to 2,500 bureaux de change operators on Thursday at $8,000 each, but the supply was not enough to calm the market, traders said.

The bureau de change operators quoted their official selling rate at 399 to the dollar on Friday.

The government has been pressing retail operators to narrow what it says is a damaging gulf between the naira’s official rate and the unapproved open retail market.

“We see the interbank rate drop below the double-digit next week on anticipation of budgetary disbursal to government agencies,” one trader said.

Traders said the local currency might firm a bit as international money transfer agents plan to sell another round of dollars to the bureau de change operators next Thursday. (Reporting by Oludare Mayowa; Editing by Hugh Lawson)