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Investors’ crave for Nigerian mutual funds heighten with AUM all-time high - BUSINESSDAY

AUGUST 17, 2017

The value of assets under management (AUM) in the Nigerian mutual funds industry hit all-time high as it surged to N322.99 billion as at week-ended July 21 2017, latest data from the Securities and Exchange Commission (SEC) has shown.

The SEC data showed that AUM value rose 11.03 per cent from May 26 2017. Industry stakeholders say that the increase is caused by the increased interest of investors who have been flocking towards Nigerian mutual funds recently.

Analysts hinge the resurgent interest on such factors as the current state of the Nigerian economy, stock market and interest rate fluctuations as well as much improved mutual funds offerings.

This assertion is further backed by a recent report by Quantitative Financial Analytics which estimated that Nigerian mutual funds attracted the sum of N42 billion inflows in the first quarter of 2017 compared to the N49 billion inflows recorded in the entire 2016 fiscal year.

Mutual funds’ assets in Nigeria also grew to N318 billion as at the beginning of the first half of 2017, 42 per cent spike since the beginning of the year. AUM stood at N223.6 billion as at the end of 2016.

It is against this background the Coronation Asset Management Limited (CAM) recently launched its two mutual funds with a view to leveraging its capacity and experience to help investors realise better returns and minimise risks of their investments.

“No one can doubt the capacity and expertise of Coronation Asset Management to deliver competitive returns to investors in the Coronation Mutual Funds,” said Emeka Okolo, senior fund manager and head of Coronation Asset Management at the launch of one of the funds. “The level of professionalism and quality of investments will be difficult to match by other mutual fund managers in Nigeria and the West African sub-region. This, coupled with the proposed investment mix and the fund structures, distinguish these Mutual Funds.”

Okolo noted that active portfolio management by experienced professionals offer investors better prospects on their investments especially in periods of market volatility and economic downturns as is being experienced in Nigeria, making mutual funds an optimal choice.

He said that the recently launched Naira-denominated, open-ended mutual funds by CAM, which witnessed a high subscription rate by individuals, retail and institutional investors, has continued to elicit excitement.

The Mutual Funds, which include the N1.5 billion money market fund, the N400 million fixed income fund, and the N200 million balanced fund, were all offered at par of 1 Naira each.

Tunde Folawiyo, chairman of Coronation Merchant Bank, said that the funds offer all strata of investors, individual and corporate alike, an opportunity to diversify their investment portfolios backed by the strength of the Coronation brand and managed by a team of experienced professionals at CAM.

The money market fund and the fixed income fund have been rated “A- (NG)(f)”  and “AA-/FV4 (NG)(f)”by Agusto & Co, a foremost Nigerian rating agency. The ratings indicate low to medium risk characteristics of the funds.

The initial public offering (IPO) for the funds came on the back of a strong financial year for the premium financial institution.

Coronation Merchant Bank, the parent company of CVAM, had grown its profits by 128 per cent from December 2015 to December 2016. The Group’s financial strength, sound risk management, prudent investment strategies, tradition of excellent value delivery to all stakeholders, attracted investors to the IPO for the mutual funds.

The Coronation mutual funds are being overseen by institutions with strong track records of providing superior financial services. CAM acting is the Fund Manager, Citibank Nigeria is custodian, and United Securities Limited is registrar to all three funds.

Stanbic IBTC Trustees Limited will acts as Trustee to the Balance and Fixed Income Funds while United Capital Trustees will act as Trustee to the Money Market Fund.

 

INNOCENT UNAH

NBS: Roughly N400bn in Bribes Given to Public Officials Annually - THISDAY

AUGUST 17, 2017
  • Says bribery is an established part of administrative procedure in Nigeria
  • Police, judiciary identified as biggest bribe-takers

Ndubuisi Francis in Abuja

An estimated N400 billion, or the equivalent of $4.6 billion in purchasing power parity (PPP), representing 39 per cent of the combined federal and state education budgets in 2016, is paid out as bribes to public officials in Nigeria annually, a new report released by the National Bureau of Statistics (NBS), in collaboration with the United Nations Office on Drugs and Crime (UNODC), has revealed.

The National Corruption Report, which covered the period between June 2015 and May 2016 also showed that almost a third of Nigerian adults (32.3 per cent) who had contact with public officials between June 2015 and May 2016 had to pay, or were requested to pay a bribe to such public officials.

 

According to the report, the magnitude of public sector bribes in Nigeria becomes even more palpable when factoring in the frequency of the payments, adding that the majority of those who paid bribes to public officials did so more than once over the course of the year.

Bribe-payers, it added, pay an average of some six bribes in one year, or roughly one bribe every two months.
“Roughly 400 billion Nigerian Naira is spent on bribes each year. Taking into account the fact that nine out of every ten bribes paid to public officials in Nigeria are paid in cash and the size of the payments made, it is estimated that the total amount of bribes paid to public officials in Nigeria in the 12 months prior to the survey was around 400 billion Nigerian Naira (NGN), the equivalent of $4.6 billion in purchasing power parity (PPP). This sum is equivalent to 39 per cent of the combined federal and state education budgets in 2016,” the report said.

It equally revealed that bribe-payers spend an eighth of their salary on bribes, noting that the average sum paid as cash bribe in the country was approximately N5,300, which is equivalent to roughly $61(PPP).

“This means that every time a Nigerian pays a cash bribe, he or she spends an average of about 28.2 per cent of the average monthly salary of approximately NGN18,900.

“Since bribe-payers in Nigeria pay an average of 5.8 bribes over the course of one year, 92 per cent of which are paid in cash, they spend an average of NGN 28,200 annually on cash bribes—equivalent to 12.5 per cent of the annual average salary,” it added.

The report, which is the first of its kind in the country in terms of scope, said Nigerians consider bribery the third most important problem facing their country.

“The above findings could explain why, after the high cost of living and unemployment, Nigerians consider corruption to be the third most important problem facing their country, well ahead of the state of the country’s infrastructure and health services.

“Public sector bribery is not the only form of corruption affecting Nigeria: the prevalence of bribery in relation to selected employees of private companies is 5.5 per cent, meaning that bribery is also significant in the private sector in Nigeria.

“However, the payment of bribes to public officials is the most familiar and widespread form of corruption directly experienced by the population and the one that most affects the lives of ordinary citizens,” it noted.

Giving an insight into how bribery works in the country, the report said public officials in Nigeria show little hesitation in asking for a bribe, noting that the vast majority of bribery episodes are initiated either directly or indirectly by public officials (85.3 per cent), while almost 70 per cent of bribes are paid before a service is rendered.

It stressed that with such a large portion of public officials initiating bribes, which are paid up-front, it seemed that many public officials show little hesitation in asking for a kickback to carry out their duty, adding that bribery is an established part of the administrative procedure in Nigeria.

“While money is by far the most important form of bribe payment in Nigeria, the survey shows that other forms of bribe payment, such as the provision of food and drink, the handing over of valuables or the exchange of another service or favour, also exist.

“Qualitative research shows that such exchanges may sometimes include sexual services, although the actual extent of that particular form of bribe payment is unknown,” the NBS report said.

The survey showed that a large proportion of bribes in Nigeria (42 per cent) are paid to speed up or finalise an administrative procedure that may otherwise be delayed for long periods or even indefinitely, thus making bribery the most effective option for facilitating that service.

According to the report, the second largest proportion of bribes (18 per cent) is paid to avoid the payment of a fine, a frequent request in citizens’ encounters with the police, while 13 per cent of all bribes are paid to avoid the cancellation of public utility services, an indication that the provision of the most basic amenities, including water and sanitation, can be subject to abuse of power by public officials in Nigeria.

On the categories of public servants indulging in bribery, the report said law enforcement and the judiciary were areas of particular concern.

“Police officers are the type of public official to whom bribes are most commonly paid in Nigeria. Of all adult Nigerians who had direct contact with a police officer in the 12 months prior to the survey, almost half (46.4 per cent) paid that officer at least one bribe, and in many cases more than one, since police officers are also among the three types of public officials to whom bribes are paid most frequently (5.3 bribes per bribe-payer over the course of 12 months) in Nigeria. At the same time, the average bribe paid to police officers is somewhat below the average bribe size.

“Although fewer people come into contact with judiciary officials than with police officers over the course of the year, when they do, the risk of bribery is considerable: at 33 per cent, the prevalence of bribery in relation to prosecutors is the second highest, closely followed by judges and magistrates, at 31.5 per cent.

“The experience of corruption in encounters with public officials whose duty it is to uphold the rule of law can lead to the erosion of trust in public authority,” it said.

The report put the prevalence rate of corruption in the public sector at 32.3 per cent, and the average number of bribes paid to public officials by bribe-payers at 5.8.

The total number of bribes paid to public officials in Nigeria in the 12-month period also stands at 82.3 million, while per capita number of bribes paid to public officials by the adult population was 0.9 per cent.

The contact rate with public officials in the review period was 52.2 per cent; the prevalence rate in the rural setting was 31.0 per cent while 34.8 per cent was posted in the urban setting

On the average number of bribes paid to public officials by adult Nigerians in the period, by zone, the North-west recorded 0.86 per cent; North-east 0.78 per cent; North-Central 1.1 per cent; South-West 1.13 per cent; South-South 1.05 per cent; and South-east 0.60 per cent.

The NBS said the data presented in the report was collected in the National Survey on the Quality and Integrity of Public Services, otherwise known as the Nigerian Corruption Survey, a project funded by the European Union and implemented by the UNODC in collaboration with the National Bureau of Statistics of Nigeria (NBS).

The statistical agency noted that Nigerian Corruption Survey was designed as a large-scale household survey, representative at the level of the Nigerian states, with the aim of collecting baseline information.

The report is the first comprehensive nationwide household survey on corruption to be conducted in Nigeria and in Africa at large, and covers all states of the federation, including the Federal Capital Territory.

According to the NBS, the report provides very valuable and reliable information, which will support the national efforts at reducing the corruption menace, as well as blocking loopholes in public services.

Nigeria’s bogus auto policy pushes car prices up 200% - BUSINESSDAY

AUGUST 17, 2017

Prices of brand new vehicles sold in Nigeria have risen by more than 200 percent between 2014 and 2017 and are now out of the reach most individuals and corporate buyers who need them for their business.
The significant rise in the prices of brand new vehicles has been blamed largely on the bogus auto policy, which raised import duty on cars to 35 percent in addition to a 35 percent levy, amounting to 70 percent, as well as a weaker naira.
Analysts say the policy automatically raises the prices of cars by 70 percent, pricing out the middle-class and other low income earners in need of mobility.
Added to this, is the weaker exchange rate of the naira that is compounded by the increase in duties and levies on imported new vehicles.
According to industry watchers, the 70 percent increase in taxes on imported new vehicles, along with the 86 percent fall in exchange rate of the naira from N196 to the dollar, to relative stability at N365 in recent times, including other incidental expenses at the ports and company overhead costs, have combined to force prices of vehicles northwards.
Many individuals who can no longer afford the new cars have resorted to maintaining their old cars for extended periods of time, even as prospects of workable financing schemes remain unavailable.
Many banks accustomed to changing cars for top executives every four years, have suspended the practice, due to high cost of procuring the new vehicles.

The impact has been seen in a sharp drop in the sale of new vehicles in the country, resulting in the closure of many car dealerships and the consequent loss of jobs.
The Federal Government had in 2013 increased the duties and levies on imported new vehicles, to encourage local auto assemblers through some incentives under the 2013-2023 National Automotive Industrial Development Plan (NAIDP) as supervised by the National Automotive Design and Development Council (NADDC).
A sample list of car prices from the Koreans, Japanese and German manufacturers, which come in various engine capacities across model ranges, exclusively obtained by BusinessDay, showed that prices have more than doubled between 2014 and 2017.
In 2014, a brand new Kia Cerato 1.6 litre automatic transmission saloon car sold for N3.96 million but now costs N9.54 million in 2017, while a Kia Picanto 1-liter engine capacity, which cost N2.25m three years ago, is now sold for N4.95 million in 2017.
Toyota Corolla 1.6 liter GLI automatic transmission fabric sold for N4.45 million three years ago, now costs N18.9 million.
In the same period, a Mercedes-Benz C200 luxury sedan, which was sold with a dealership price tag of N10.5 million, costs N25 million in 2017, while a Mercedes G63AMG model which previously sold at N50 million, presently wears a price tag of N78 million.

This shows a price jump of over 100 percent and this applies to other brands of vehicles in the market, apart from those manufactured in Korea, Japan or Germany.
According to Kunle Ade-Ojo, Managing Director/CEO, Toyota Nigeria Limited, the rise in vehicle prices is majorly due to the unfavourable exchange rate of the naira.
Ade-Ojo explained that as the dollar is scarce, so also is the naira pretty much scarce and that bank’s interest rates have gone up.
“Even though the exchange rate has moderated from a high of about N520 to the dollar at a very critical period and trading at about N366 to the dollar and below, from the end of 2016 to 2017, it is still not available.”
Ade-Ojo estimated that the country’s auto industry is expected to import and sell between 8,000 and 10,000 new vehicles this year, which is lower than the 15,000 projected at the end of last year.
The forecast, Ade-Ojo said, was based on the industry’s performance in the first quarter of 2017, adding that at the end of the first quarter of 2017, total import figures in the nation’s automobile industry, from the nation’s ports, came to about 350 units, compared to about 3,500 units that came in at the same period last year.
He said with this statistics, “imports dropped by about 90 percent between 2016 and 2017 first quarter.

“In terms of retail sales, we are estimating, based on the information we have, that the auto market did about 2,000 vehicles, compared to about 5,000 vehicles that was done in first quarter of 2015, a drop of over 50 percent in retail sales.
“Passenger cars reduced more than commercial cars and of course, when you look at the duties on passenger cars also at 70 percent, compared to 35 percent for commercial, the impact is more on passenger vehicles.”
Retail sales went from about 32,000 in 2015 to about 18,000 last year, representing a market drop of about 42 percent.
While giving the status of the implementation report of the NAIDP between October 2013 and June 2017 at a recent stakeholders meeting involving local auto assemblers and other stakeholders in Lagos recently, Luqman Mamudu, Director of Policy & Planning, National Automotive Design & Development Council (NADDC) revealed that the automotive policy is seeing tremendous progress, despite doubts in some quarters and that soon, Nigerians will begin to see positive result.
He disclosed that at the inception of the automotive policy in 2013, the number of approved local assemblers by the NADDC was 11 companies and grew to 53 companies in 2017.

Production capacity rose from 108,380 units in 2013 to 408,870 units in 2017. Actual production size increased from 1665 in 2013; 4776 in 2014; 11,332 in 2015 and started witnessing a drop from to 11, 332 in 2015 to 10,673 in 2016 and 8,473 in 2017.
Reacting on the astronomical jump in prices of new vehicles, Olawale Jimoh, Marketing Manager, Kia Motors Nigeria Limited, stated that for over two years now, the steady increase in the prices of cars in Nigeria has been misconstrued by some industry followers.
He argued that the local assembly of cars will invariably bring a new dawn that will result in affordable “Made in Nigeria” cars.

That expectation should ideally not be out of place, if Nigeria’s economy over the years has been stable.

He lamented that with the fast depreciation in the value of the naira, prices of cars have increased by more than 100 percent, which may still not totally compensate for the drop in the value of the naira.

Jimoh lamented that at this stage of the country’s auto development, assembly plants still import SKD kits to assemble, on account of the dearth of component manufacturers in the country, among the interplay of other factors.

 

MIKE OCHONMA

Abokifx looks at various countries foreign reserves in comparison to Nigeria's foreign reserve - abokifx

JULY 15, 2017

With Nigeria's population at 190 million, Nigeria's foreign reserve needs to be about $100bn to eliminate any pressures on the naira. The chart and table below show why this is necessary.   -    abokiFX research

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YEAR TO DATE FOREIGN RESERVE MOVEMENT IN USD :CHART - abokiFX

JULY 13, 2017

  • The Naira has been trading below N400/$ for the past four months as the foreign reserves hover above $30bn. 
  • There is the risk of crude oil falling below $40 a barrel which could see the reserves dip below the $30bn threshold. 
  • The chart above shows that a foreign reserve below $30bn will put pressure on the naira, making it slip back above N400/$ in the parallel market.

Aviation Sector Stable amidst Challenges - THISDAY

JUNE 02, 2017

Although Nigerian airlines faced daunting challenges in the last two years of Muhammadu Buhari’s administration, there was some measure of stability in the sector despite the hiccups, writes Chinedu Eze

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There were two key incidents that defined the aviation sector in the last two years. One was the protracted scarcity of aviation fuel, known as Jet A1, which price rose as high as N280.00 per litre and the second was the resurfacing of the runway of the Nnamdi Azikiwe International Airport, Abuja, which forced the relocation of air operations in the capital city to Kaduna airport for six weeks.

While the rehabilitation of Abuja airport runway was a big plus for the Buhari administration; it received heavy knocks for the scarcity and high cost of aviation fuel.

 

But beyond what the administration could do or could not do, the domestic airlines lost over N2.3 billion during the peak Christmas season last year when hundreds of flights were cancelled at different airports in the country due to harmattan haze.

Forex Scarcity
The high price of aviation fuel was caused by the low value of the naira. As the dollar began to rise in value against the naira, prices of imported goods and services spiralled. This was what caused the scarcity and high price of aviation fuel. Marketers faced difficulty sources foreign exchange at lower price below the parallel market price to import the product.

The airlines faced further challenges because they could not source the scarce dollar to import spares, send their pilots to simulator training overseas and even take their aircraft overseas for routine maintenance checks.

But after a long outcry by the airlines to the federal government to give them access to FX, the Central Bank of Nigeria (CBN) created a special window for them and manufacturing concerns to access FX. But the modalities were still cumbersome and the airlines could not withstand the long wait as airline business is critical about time. An aircraft engine that suffered bird strike cannot wait for three months before the engine could be replaced and for the aircraft to become airborne again. The airline would suffer heavy financial losses and may not be able to meet its flight schedules and financial obligations when one aircraft is left as aircraft on ground (AOG).

In late 2016, the Managing Director and CEO of Medview Airline, Alhaji Muneer Bankole summed the CBN policy on FX to the airlines thus: “The CBN came out with a design which they call future, forward, spot; what it means is that you put your money for the next two months, three months, four months and you will be given allocation. In doing that you commit all your operational cash so everything has to cease until that two months; that is what it means. But we are hoping that things will improve. So when you look at the business of aviation it is all in dollars and I believe we are now looking at government to tell them what to do. Somebody right there needs to advise them to see aviation as a priority.”

Things really improved by 2017, when government began to supply dollars to ease the tension on the naira. But the airlines still faced problem sourcing the dollar at a good price.

Abuja Airport
When in March the federal government closed the nation’s busiest airport, the Nnamdi Azikiwe International Airport, Abuja for the repair of its runway, which had become a death trap, many Nigerians were not happy about it because they believed that there could be an alternative to closing the airport, as examples began to emanate where airport runways were rehabilitated while they were still in service.

The closure of the airport led to loss of economic activities in the Federal Capital Territory but the runway rehabilitation saved lives and improved the safety of flight operations to the capital city. Above all, what made the rehabilitation of the runway memorable was the fact that government delivered as promised. The Minister of State, Aviation, Senator Hadi Sirika kept to his promise and etched his promise that he would resign his job if the airport was not reopened at the targeted date in the memory of many Nigerians. The airport was closed on March 8 and reopened officially on April 19, 2017.

To prepare Kaduna airport as an alternative to Abuja for the six weeks the closure of the later would last, government had to upgrade many facilities at Kaduna airport at huge costs. That became a win-win situation because the obsolete facilities at the airport and uncompleted passenger terminal, which the six weeks relocation of Abuja flight operations facilitated their completion, was akin to killing two birds with one stone.

“It is no longer news that the federal government made considerable financial provision to ensure that the Kaduna airport was adequately prepared to play this alternate role including the provision of adequate aids and other relevant infrastructure that the airport did not have. The Minister of State, Aviation, who has been in the forefront of driving this difficult transition, met with initial challenges associated with the movement, but one after another, those challenges were dealt with appropriately in the last four weeks,” said an official of the Federal Airports Authority of Nigeria (FAAN).

Airport Terminals
In the last two years, the federal government has continued to work on the new terminals, which were started under the past administration, at the five international airports in the country, including Lagos, Kano, Port Harcourt, Abuja and Enugu and some of them are over 80 percent completed. In fact, almost all of them would be made operational before end of this year.
The government also introduced a policy mandating Aviation Security (AVSEC) of FAAN to carry arms in order to improve security at the airports. It also reinforced the policy on waiver of Customs duties on aircraft parts and efforts are being made to cut down the prices of aviation fuel despite the fact that the product is still being imported.

Arik Take Over
The major upheaval that has taken place in the aviation industry in the last two years was the takeover of Arik Air by the Asset Management Corporation of Nigeria (AMCON) for its failure to service its debts. Since after the takeover, the new management of the airline seems to be at crossroads about how to turn the airline around amid the challenges of paucity of funds and low passenger traffic occasioned by the current recession. The workers are also in a dilemma about tomorrow, while government is yet to make definite pronouncement on the future of the airline.

But the new management of the airline has brought back some of the aircraft in the fleet on AOG to operations, just as the workers who feared at the beginning of the takeover have continued to retain their jobs.

Airports Concessions
There are three cardinal things this government said it would achieve in aviation in the four-year tenure. One is establishing a national carrier; two is building Maintenance, Repair and Overhaul (MRO) facility and the third is concession major airports.
In the last two years, none of these set objectives had been accomplished. However, the government has initiated steps to actualise them through the establishment of transaction advisers. But government explained that the airports would remain underperforming with obsolete facilities until the private sector injects and modernises these airports.
The Minister of State, Aviation, Senator Sirika recently noted that concession might be the only choice government has now to modernise nation’s airports.

“I think the ultimate solution to all of these is to concession these airports. I have maintained this because I don’t know any other way we can go about it. That is the only way to go because government does not have the resources to continue to invest in these airports. We want to make sure that all the things at the Abuja airport are fixed and the airport returns to normal operation.
However, I think that the ultimate end and solution to all of these is the concession of these airports. I have maintained this. It is the only solution, I don’t know any other way we can do it because government no longer have the resources to continue to invest in these airports,” Sirika said.
However, many industry observers are sceptical about the actualisation of these goals, as no concrete action has been taken two years into the four years administration.

Questionable Appointments
The appointment of new directors for the Nigerian Civil Aviation Authority (NCAA) and the Federal Airports Authority of Nigeria (FAAN), early this year, had been greeted with severe criticism by the labour unions.
The unions excoriated government for appointing outsiders without experience to do jobs that would be effectively done some people in the industry who have better experience and knowledge of the sector.
But the government was earlier commended for appointing professionals in the industry to head the aviation agencies, including the Nigerian Airspace Management Agency (NAMA), the Accident Investigation Bureau (AIB), the College of Aviation Technology (NCAT), Zaria and the Nigeria Meteorological Agency (NIMET).

Funding Challenges
Reviewing the two years of the Buhari administration, a former Commandant of the Lagos airport and the Secretary of Aviation Round Table (ART), Group Captain John Ojikutu (retd) said: “It has opened the decays and the decadence in the sector which for too long have been shielded from the public view. We have come to know that a lot of the private operators have been living on bank loans and government intervention funds yet they remained in acute debts to the services providers. They get concession on Customs duties on aircraft importation and spares and on foreign exchange rate, yet they are indebted to banks, insurance, staff salaries in multiple arrears.
“In all these, they sell tickets on cash basis and not on credit; the question to ask is, what do these airlines do with their earnings?”

Ojikutu said in spite of the indebtedness of these airlines to the government services providers, and invariably the low revenue accrued to government, it has been able to sustain operations in the sector, noting that Abuja that accounts for about 35 percent of air and passengers traffic, whose runway that needed to have been repaired seven years ago was repaired within six weeks. Similarly, many navigational aids and runway approach aids that needed calibration and had exceeded their tolerance emergency were calibrated and have been kept serviceable to sustain operations.

Ojikutu however, did not talk about the high charges levelled on the airlines, the lack of airfield lighting in many airports, which force airlines to operate only six hours and the high cost of aviation fuel, but on airport concession he said: “My advice to government on this path is to concession only the non aeronautical facilities and infrastructure such as the passengers and cargo terminal buildings; aircraft aprons, car parks and toll gates.

“These have little concerns to the International Civil Aviation Organisation (ICAO). However, government must retain the aeronautical services and facilities including airport security. Others will include air traffic control and information services, runways and taxiways, perimeter and security fences, emergency and rescue services, etc. These are the concerns of ICAO and these are the State’s obligations to the Chicago convention in all its 19 Annexes.”

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WEEKAHEAD-Nigerian naira expected to be stable due to dollar flows - REUTERS

JUNE 02, 2017

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The Nigerian naira is expected to be stable in the coming week while the Zambian kwacha could come under pressure.

 

NIGERIA

The Nigerian naira is seen stable across the board in the near term on increased dollar supply to both the official interbank window and the black market.

It has been trading around 382 to the dollar on the black market in the last two weeks, while at the interbank market the naira was trading at around 305.40 per dollar.

The central bank has been intervening on the official market to try to narrow the spread between the official interbank and black markets. It has sold over $4 billion since February, improving dollar supply and providing support for the naira.

 

KENYA

The Kenyan shilling could gain ground against the dollar in the coming week with dwindling end month importer demand giving way to foreign exchange inflows from charities and exporters, traders said.

At 0850 GMT on Wednesday, commercial banks quoted the shilling at 103.35/45 per dollar, compared with 103.25/45 at last Thursday's close. Thursday was a public holiday.

"End of month demand is taking it's course, I expect it to gain maybe slightly," said a trader from a commercial bank.

 

ZAMBIA

The Zambian kwacha is likely to come under pressure in the coming week due to increasing demand for dollars from importers at the start of the new month.

At 0740 GMT on Thursday, commercial banks quoted the currency at 9.2500 per dollar, stronger than 9.3300 a week ago.

"Dollar supply continues to wane while demand persists. Higher levels will attract exporters to provide resistance," one senior commercial bank trader said.

 

UGANDA

The Ugandan shilling is seen posting marginal gains in the coming week, boosted by flagging appetite for hard currency as commercial banks stay on the sidelines ahead of 2017/18 fiscal year budget reading.

At 1100 GMT, commercial banks quoted the shilling on 3,590/3,600, stronger than last Thursday's close of 3,600/3,610.

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"In the days ahead of the budget players tend to go slow on taking positions and this is what we're likely to see," said a trader at a leading commercial bank.

The budget for the next July-June fiscal year is due to be read on June 8.

 

GHANA

Ghana's cedi is seen stable next week on expected offshore portfolio inflows on the heels of a three-year local bond and central bank dollar sales, traders said.

The local unit, which has been fairly stable most part of the year, weakened 2.8 percent in the month of May on a mid-month corporate dollar demand surge. It was trading at 4.3275 to the greenback by mid-morning on Thursday, compared with 4.3200 a month ago.

"We see a bullish outlook for the cedi in the days ahead as we expect portfolio inflows and central bank support to offer the currency some stability," analyst Joseph Biggles Amponsah of Accra-based Dortis Research said.

 

TANZANIA

The Tanzanian shilling could come under pressure in the coming days due to demand for hard currency from the oil sector. Commercial banks quoted the shilling at 2,238/2,243 to the dollar on Thursday from 2,234/2,244 a week ago. "There is pressure on the local currency coming from the oil sector, despite month-end dollar inflows from corporates. The shilling could trade in a tight range next week," said a trader at CRDB Bank. (Reporting by Oludare Mayowa, John Ndiso, Chris Mfula, Elias Biryabarema, Kwasi Kpodo and Fumbuka Ng'wanakilala Editing by Jeremy Gaunt)

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UPDATE 3-Oil prices drop amid glut concerns, U.S. withdrawal from climate deal - REUTERS

JUNE 02, 2017

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* U.S. President Trump says to walk away from Paris climate accord

* That could spark "drilling free for all" in the U.S. - analyst

* Rising U.S. output has been blunting OPEC efforts to clear glut

* Market can stabilise if all producers cut output - Rosneft CEO (Adds Russia's Rosneft CEO comments, updates prices)

By Jane Chung

SEOUL, June 2 (Reuters) - Oil prices tumbled below $50 on Friday amid worries that U.S. President Donald Trump's decision to abandon a global climate pact could spark more crude drilling in the United States, stoking a persistent glut in global supply.

Global benchmark Brent crude futures was down 1.7 percent, or 80 cents, at $49.75 a barrel, as of 0725 GMT.

U.S. West Texas Intermediate crude futures dropped 87 cents, or 1.81 percent, to $47.46 per barrel.

Commodity markets were absorbing news the United States would withdraw from the landmark 2015 global agreement to fight climate change, a move that fulfilled a major campaign pledge but drew condemnation from U.S. allies.

"This could lead to a drilling free-for-all in the U.S. and also see other signatories waver in their commitments," said Jeffrey Halley, senior market analyst, OANDA.

"This outcome could increase the supply-side equation from the United States and complicate OPEC's forward projections. A scenario that would not be favourable to oil prices."

Surging U.S. production has put a strain on OPEC members' efforts to curb production to drain a global crude supply overhang.

A week ago, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC members met in Vienna to roll over an output cut deal to reduce 1.8 million barrels per day (bpd) until the end of next March.

Russian Deputy Prime Minister Arkady Dvorkovich said on Friday he did not think that the global output cut agreement would be altered should prices go lower.

Russia's Rosneft CEO Igor Sechin also said the market cannot stabilise unless all producers cut output.

Oil prices are down some 7.5 percent since OPEC's May 25 decision to extend the cuts.

Faced with lingering glut woes, the oil cartel also discussed last week reducing output by a further 1 to 1.5 percent, and could revisit the proposal should inventories remain high, according to sources.

But oil markets were offered some support by official data that showed crude inventories in the United States, the world's top oil consumer, fell sharply last week as refining and exports surged to record highs.

Crude stockpiles were down by 6.4 million barrels in the week to May 26, beating analyst expectations for a decrease of 2.5 million barrels.

However, U.S. crude production rose to 9.34 million bpd last week, up nearly 500,000 bpd from a year ago.

"We may or may not see more huge draws. But crude production is slowly but surely going to neutralize the (OPEC-led)production cut," said Sukrit Vijayakar, director of energy consultancy Trifecta.

Rising output from Nigeria and Libya, which are exempted from the deal, is also undercutting oil producers' attempt to limit production. (Reporting by Jane Chung; Additional reporting by Jessica Jaganathan and Henning Gloystein in SINGAPORE; Editing by Joseph Radford and Sherry Jacob-Phillips)

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Oil prices slide nearly 1 pct on persistent glut concerns - REUTERS

JUNE 02, 2017

By Jane Chung

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SEOUL, June 2 (Reuters) - Oil prices dropped nearly 1 percent in early Asian trade on Friday, dragged down by ongoing concerns over a global glut in crude supply despite a bigger-than-expected draw in U.S. crude inventories.

Global benchmark Brent crude futures were down 39 cents, or 0.77 percent, at $50.25 a barrel at 0039 GMT.

U.S. West Texas Intermediate crude futures dropped 45 cents, or 0.93 percent, to $47.91 per barrel.

Official data showed crude inventories in the United States, the world's top oil consumer, fell sharply last week as refining and exports surged to record highs.

Crude stockpiles were down to 6.4 million barrels in the week to May 26, beating analyst expectations for a decrease of 2.5 million barrels.

Although a sharp fall of U.S. crude inventories could be seen as a supportive factor to oil prices, U.S. crude production rose to 9.35 million bpd last week, up nearly 500,000 bpd from a year ago.

Surging U.S. production has put a strain on OPEC members' efforts to curb production cuts in a bid to drain a global crude supply overhang and to prop up prices.

A week ago, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC members met in Vienna to roll over the output cut deal to reduce 1.8 million barrels per day (bpd) until the end of next March.

Faced with lingering glut woes, the oil cartel discussed last week reducing output by a further 1 to 1.5 percent, and could revisit the proposal should inventories remain high, according to sources.

Rising output from Nigeria and Libya is further undercutting the oil producers' attempt to limit oil production. Nigeria and Libya are exempted from curbing output as they seek to restore supplies hurt by internal conflicts.

Libya's oil production has risen to 827,000 bpd after technical problems were resolved at the Sharara field. That was above a three-year peak of 800,000 bpd reached earlier in May.

Some commodity markets were also absorbing news that President Donald Trump said he would withdraw the United States from the landmark 2015 global agreement to fight climate change, a move that fulfilled a major campaign pledge but drew condemnation from U.S. allies and business leaders.

But Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance, said the U.S. decision to walk away from the climate agreement was not likely to impact oil markets.

“I see the little connection between oil markets and the Paris accord," Barratt said.

"I think the market is looking for swing factors like an increase in demand from China,” he said.

(Reporting by Jane Chung; Editing by Joseph Radford)

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Foreign participation in Egypt T-bill auctions at $368 mln -finance ministry - REUTERS

JUNE 02, 2017

CAIRO, June 1 (Reuters) - Foreign participation in Egypt's Thursday treasury bill auctions amounted to 6.6 billion Egyptian pounds ($368 million), the head of public debt at the Finance Ministry, Sami Khallaf, told Reuters.

Egypt on Thursday auctioned six-month and one-year treasury bills.

($1 = 17.9500 Egyptian pounds) (Reporting by Eric Knecht; Editing by Ahmed Aboulenein)

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