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Oil Drops Below $70 as China Faces New COVID-19 Outbreak

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crude oil

By Adedapo Adesanya

The price of crude oil dropped below $70 per barrel on Monday as the international oil market got a shock after the world’s top crude importer, China, imposed more travel restrictions to fight what it sees as the worst outbreak since the original viral outbreak in Wuhan.

As a result, the Brent crude traded at $69.24 per barrel after losing $1.41 or 1.99 per cent, while the United States West Texas Intermediate (WTI) recorded a $1.44 or 2.11 per cent loss to trade at $66.64 per barrel.

China reported 125 new COVID-19 cases on Monday, up from 96 a day earlier and has started testing millions of people. It has suspended airline and long-haul bus trips from cities with reported COVID cases in an attempt to eradicate early the Delta variant outbreak in the country.

The capital Beijing is also tightening travel restrictions, adding to the already growing concerns about fuel demand in the top oil importer in the world.

This is coming at a time when data has shown a decline in economic data. The Asian giant’s export growth slowed more than expected in July after outbreaks of COVID-19 cases and floods, while import growth was also weaker than expected.

This is further dampened as China’s crude oil imports fell in July and were down sharply from the record levels of June 2020. It imported 9.7 million barrels per day in July, the fourth straight month below 10 million barrels per day.

Meanwhile, fuel demand in the world’s third-largest importer, India, rose in July to its highest since April as pandemic restrictions and lockdowns were unwound in most states, boosting industrial activity and mobility.

Oil also fell as the US Dollar rallied to a four-month high against the Euro after Friday’s stronger-than-expected US jobs report spurred bets that the Federal Reserve may move more quickly to tighten its monetary policy.

A stronger US Dollar makes oil more expensive for holders of other currencies.

Analysts said the oil market was looking for direction from monthly data due this week – the US Energy Information Administration on Tuesday, and the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) on Thursday.

With the latest development, the Organization of the Petroleum Exporting Countries and allies (OPEC+) will make monthly supply hikes of 400,000 barrels per day from August and continue until all of its pandemic-related output reduction is reversed as there are expectations that the market will be able to absorb the additional barrels as demand accelerates.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Economy

Popoola Advocates Increase in Long-term Sustainable Finance

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Sustainable Finance Market

By Aduragbemi Omiyale

To achieve the Sustainable Development Goals (SDGs) in Sub-Saharan Africa, there must be an increase in long-term sustainable finance.

This is the submission of the Chief Executive Officer of the Nigerian Exchange (NGX) Limited, Mr Temi Popoola, at the CEO Breakfast Roundtable hosted by United Nations Global Compact Network Nigeria.

He said the NGX has always provided its platform for the growth of sustainable finance in Nigeria by developing the nation’s green bond market.

“The NGX has over the years played a leading role in developing financial instruments that address sustainable development and promote financial inclusion in the Nigerian capital market.

“In recognition of Nigeria’s climate finance needs and the urgent action required to combat climate change as enshrined in the Paris Agreement on Climate Change, the exchange, in 2016, championed efforts along with government and industry stakeholders that culminated in the issuance of the maiden N10.69 billion (c. $25.8 million) 13.48% 5-year green bond in 2017.

“The exchange also played a leading role in promoting the development and issuance of the Federal Government of Nigeria (FGN) Ijarah Sukuk which has proven to be a highly attractive instrument that supports inclusion from Nigeria’s ethical investors and sharia-compliant investors who have a stronger preference for non-interest-based instruments,” Mr Popoola stated.

He further disclosed that the bourse is collaborating with other organisations like the International Finance Corporation (IFC) to build the capacity of potential green bond issuers in Nigeria.

“NGX has partnered with IFC to train issuers and market operators on the issuance of sustainable financial instruments.

“Through the training, NGX and IFC shared best practices in sustainable finance issuance, and educated potential issuers on the unique characteristics of green social and sustainable bonds, the specific advantages of each instrument, as well as the detailed step-by-step process for issuing these instruments,” the capital market expert said.

He said the NGX remains “committed to fostering the growth of sustainable financial products that integrate the financial risks and help issuers leverage the opportunities associated with the SDGs, the fight against climate change.”

Mr Popoola commended the United Nations Global Compact on the recent launch of the Africa Strategy and encouraged private sector leaders to support the initiative.

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Economy

FG to Announce New Date for Postponed FAAC Meeting for May 2022

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FAAC meeting allocation

By Aduragbemi Omiyale

The federal government has said it would announce a new date for the Federation Account Allocation Committee (FAAC) meeting for this month, which was shelved in a circular on Wednesday.

On Wednesday, the Ministry of Finance, Budget and National Planning released a statement to announce the postponement of the FAAC Meeting for May 2022 over certain circumstances connected with the arrest of the Accountant General of the Federation (AGF), Mr Ahmed Idris.

Mr Idris, who is a key member of the FAAC team, is cooling off in the custody of the agency over an alleged N80 billion fraud. He is helping the EFCC in its investigation into the issue.

As a result of his arrest and suspension from office by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, the meeting for this month was shelved.

In the circular signed by the Director of Home Finance at the Ministry, Mr Stephen Okon, the federal government assured that “the new date for the meetings will be forwarded to you in due course.”

The gathering, which is held to share revenue generated by the country in the previous month to the three tiers of government; federal, states and local governments, was earlier slated to take place this month on Wednesday, May 18 and Thursday, May 19, 2022.

But Mr Okon stated in the notice that, “I am directed to inform you that the Federation Account Allocation Committee (FAAC) meetings earlier scheduled to hold virtually on the 18th and 19th May 2022 have been postponed due to certain circumstances.”

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Economy

Bulls Return to Unlisted Securities Market on 0.21% Growth

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Unlisted Securities Market

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange welcomed the bulls back into its fold on Thursday following a 0.21 per cent growth at the close of business.

The bulls were at the unlisted securities market yesterday at the invitation of Niger Delta Exploration and Production (NDEP) and Food Concepts Plc, which recorded price appreciations during the session.

NDEP Plc gained N10 or 4.6 per cent to close at N220.00 per share as against the N210.00 it closed at the last session, while Food Concepts Plc appreciated by 6 kobo or 6.5 per cent to close at 93 kobo per unit compared with 87 kobo per unit of the previous session.

The gains reported by the duo expanded the NASD unlisted securities index (NSI) by 1.66 points to 808.79 points from 807.12 points and equally increased the market capitalisation by N2.17 billion to N1.06 trillion from N1.05 billion.

At the market yesterday, the trading volume rose by 17,545.7 per cent as a total of 20.0 million units of shares exchanged hands compared with the 113,500 units of shares transacted on Wednesday.

In the same vein, the trading value rose by 749.3 per cent to N24.4 million from the previous day’s N2.9 million, while the number of trades went down by 28.6 per cent to five deals from seven deals.

AG Mortgage Bank Plc remained the most traded stock by volume on a year-to-date basis with 2.3 billion units valued at N1.2 billion, Central Securities Clearing System (CSCS) Plc stood in second place with 661.7 million units worth N13.9 billion, while Food Concepts Plc was in third place with 134.0 million units valued at N114.9 million.

In the same vein, CSCS Plc ended the session as the most active stock by value on a year-to-date basis with 661.7 million units worth N13.9 billion, VFD Group was in second place with 9.4 million units valued at N2.9 billion, while AG Mortgage Bank Plc in third place has transacted 2.3 billion units valued at N1.2 billion.

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