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George Soros explains why devaluation is on the cards for emerging markets like Nigeria

Billionaire Investor, George Soros has said that the strong dollar and the termination of the Iran Nuclear deal by the United States, is a major global threat to the European Union and to emerging markets like Nigeria.

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George Soros

Billionaire Investor, George Soros has said that the strong dollar and the termination of the Iran Nuclear deal by the United States, is a major global threat to the European Union and to emerging markets like Nigeria.

George Soros

George Soros

Here are 10 actions that can make you a successful investor(Opens in a new browser tab)

According to a Bloomberg report, Soros remarked that “We may be heading for another major financial crisis.”

Market/Economic Insight: The Weekly Brief (October 15th – 19th 2018)(Opens in a new browser tab)

Soros opined that America’s withdrawal in the nuclear deal with Iran and President Trump’s decision to pull out of the transatlantic trade deal with the EU is “bound to have a negative effect on the European economy and cause other dislocations, including a devaluing of emerging-market currencies.”

Three reasons why the naira is depreciating(Opens in a new browser tab)

Why this matters

  • A stronger dollar has recently led to currency pressures in emerging markets like Argentina, Brazil, and Turkey.
  • The combination of higher interest rates and a strong dollar typically leads to capital flight, resulting in higher portfolio outflows out of the country.
  • Information from the Investor Exporter window suggests there is a $1 billion demand for forex outflows out of the country. This significant demand is said to be unnerving the CBN.
  • The CBN has also recently issued warnings to banks and the BDC to ensure forex supply is available to business and leisure travelers as we approach the summer.
  • This indicates the CBN is already bracing up for another round of forex hoarding.

Nigerians Stocks showing signs

  • Stocks are a bellwether for what is likely to take place in the economy and if we are to rely on latest trading sessions, the message is loud and clear.
  • The Nigerian Stock market has been experiencing a sell-off lately recording about 8 straight days of losses as the bears dominate trading sessions.
  • Nigerian Stocks are likely to close negative in May only the 4th time in over 30 years.
  • The last time stocks recorded these streak of losses was in March this year. If the latest losing streak is as a result of higher portfolio outflows then we might be in for a very long ride.

Check Bloomberg

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@Nairametrics

Nairametrics

Ugo Obi-chukwu "Ugodre" is a chartered accountant with over 16 years experience in financial management, corporate finance and financial analysis. He is also a retail investor and a personal finance advocate with over a decade experience investing in the Nigerian stock market.Ugo is the founder/Publisher of Nairametrics and blogs regularly on the website.

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    Business

    FG explains why Lagos-Ibadan rail line was not linked to the sea

    The government in its explanation said that the delay was due to disruption by trucks going in and out of the port complex.

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    FG needs $656 million to complete Lagos-Ibadan railway project – Amaechi, Nigeria loses N150 billion annually to shipping tariffs, Ibadan to Kano rail construction

    The Federal Government has stated why the China Civil Engineering Construction Company (CCECC) Nigeria Limited could not link the final part of the Lagos-Ibadan rail line to the sea.

    The government in its explanation said that it was due to disruption by trucks going in and out of the port complex.

    According to a press statement signed by the Director, Press and Public Relations of the Federal Ministry of Transportation, Eric Ojiekwe, this disclosure was made by the Minister of Transportation, Rotimi Amaechi, while on a routine tour of the Lagos-Ibadan rail line project on Saturday, April 10, 2021.

    The Minister pointed out that the original blueprint for the Lagos-Ibadan rail line project was not adhered to by CCECC Nigeria Limited and TEAM consortium and therefore warned that the master plan of the soon to commence Ibadan-Kano rail line project should not be changed.

    The statement from the ministry partly reads, “The Nigerian Government has restated its commitment to connect the whole country by rail with the soon to commence Ibadan-Kano Standard Gauge Rail project.”

    Amaechi forewarned that the master plan of the soon to commence project should not be changed as the original blueprint for the Lagos-Ibadan wasn’t adhered to by Messrs CCECC Nigeria and TEAM consortium. The Minister who rode the train from Ebute-Meta to the 8.72 km Apapa Port Spur line, informed the media that the inability of Messrs CCECC Nigeria to link the final part of the rail line down to the sea is rather due to disruption by trucks going in and out of the port complex.’’

    The Minister had noted that the Federal Government has paid its share of the counterpart funding of the Ibadan-Kano rail line project and is waiting for China-Exim bank to ratify its side of the agreement for the project to commence.

    He also advised the Nigerian Railway Corporation (NRC) to acquire more land around the train stations and the rail tracks for future development adding that this will be near impossible to do in the future as whatever space available now would have been taken over by businesses attracted to the rail line.

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    In case you missed it

    It can be recalled that full commercial train services commenced on the Lagos-Ibadan rail line after train operations commenced on December 7, 2020, with only Lagos, Ibadan and Abeokuta residents enjoying the train services.

    This is because other minor and major stations along that route were yet to be completed.

     

    Stanbic 728 x 90
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    Manufacturing

    Industrial Index loses -12.39 points, as BUA and Lafarge Cement shares top losers list

    The NSE Industrials index lost 12.39 index points in the first trading week in the month of April.

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    Manufacturing: Activity levels pick up albeit readings still below water

    The Nigerian Stock Exchange Industrial Index at the close of trading activities for the first week in the month of April closed on a bearish note, following a 0.66% decrease in the shares of BUA CEMENT and Lafarge.

    At the close of trading activities on the Nigerian Stock Exchange on the 9th of April 2021, the industrial index depreciated by 55.01 index points, to close lower at 1,928.18 index points for the week.

    When compared to the overall performance of the market, the NSE Industrial index underperformed, noting that the NSE All-Share Index and Market Capitalization depreciated by 0.66% to close the week at 38,866.39 and N20.3350 trillion respectively.

    READ: COVID-19, VAT, FX scarcity adversely impacted our operations in 2020 – Nigerian Breweries boss says

    What you should know

    The NSE Industrial Index was designed to provide an investable benchmark to capture the performance of the Industrial Sector. It comprises the most capitalized and liquid companies in the industrial sector and is based on the market capitalization methodology.

    The index tracks the performance of ten industrial companies on the Nigerian Stock Exchange which includes Dangote, BUA, and Lafarge Cement.

    The overall performance of the companies for the week was bearish, as the index closed on a negative note driven by the decrease in the share price of BUA Cement and Lafarge.

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    MEYER (19.51) was the only gainer for the week, while BUACEMENT (-1.09%) and LAFARGE WAPCO (-3.00%) were the only losers for the week.

    GAINER

    • MEYER up by19.51% to close at N0.49.

    LOSER

    • WAPCO down by -3.00% to close at N21.00.
    • BUACEMENT down by -1.09% to close at N72.70.

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