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Oil Hits $72 as US Dashes Hopes of Lifting Iranian Sanctions

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Iranian Oil

By Adedapo Adesanya

Oil prices edged higher on Tuesday after the United States said if it reaches a nuclear deal with Iran, many of its sanctions would not be lifted, calming fears of additional supply to the market.

Brent crude futures closed 23 cents or 0.32 per cent up at $72.45 per barrel while the US West Texas Intermediate (WTI) crude futures gained 25 cents or 0.36 per cent to trade at $70.30 per barrel.

The positive outcome came on the back of US Secretary of State, Mr Antony Blinken, disclosing that even if talks were successful to revive a 2015 nuclear deal, the country would not remove sanctions placed on the Middle East county.

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He said, “I would anticipate that even in the event of a return to compliance with the JCPOA (Joint Comprehensive Plan of Action), hundreds of sanctions will remain in place, including sanctions imposed by the Trump administration.”

*If they are not inconsistent with the JCPOA, they will remain unless and until Iran’s behaviour changes,” he added.

The discussions in Vienna, brokered by European diplomats, have been locked in dispute on which sanctions to lift.

This boosted confidence and also eased pressure that an additional one or two million barrels could be injected into the market.

Crude prices have risen in recent weeks, with Brent up by nearly 40 per cent this year and WTI gaining even more, amid expectations of demand returning as some countries succeed in vaccinating populations against COVID-19.

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However, even as overall global demand keeps improving, the COVID-19 comeback in Asia and parts of South America continue to create a bumpy recovery for the market in general.

While consumption improves, the Organization of Petroleum Exporting Countries and its allies (OPEC+) are returning some stalled supply to the market.

The group had been looking at prospects for demand growth later this year and the potential lifting of US sanctions on Iranian oil before deciding on output policy beyond July.

Adding to the bullish sentiment, the American Petroleum Institute (API) on Tuesday reported a draw in crude oil inventories of 2.108-million barrels for the week ending June 4.

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Analysts had predicted a draw of 2.036 million barrels for the week.

In the previous week, the API reported a draw in oil inventories of 5.36 million barrels after analysts had predicted a draw half that size of 2.114 million barrels.

Crude oil inventories have fallen by more than 14 million barrels since the start of 2021, according to API data, but are still up 43 million barrels since January 2020.

Data from the Energy Information Administration (EIA) will be released later on Wednesday to confirm the projection made by the API.

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

SEC Introduces Regulatory Incubation Program for Fintechs

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fintechs

By Modupe Gbadeyanka

A regulatory incubation (RI) program for financial technology (fintech) companies operating or seeking to operate in Nigeria has been introduced by the Securities and Exchange Commission (SEC).

A circular issued by SEC disclosed that this framework would be officially launched in the third quarter of 2021 and will operate by admitting identified Fintech business models and processes in cohorts for a one-year period.

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Participation in the RI program will encompass an Initial Assessment Phase and the Regulatory Incubation Phase.

The categories to be admitted into each cohort will be determined based on submissions received through the Fintech Assessment Form and communicated ahead of each take-off date.

SEC explained that the scheme was designed to address the needs of new business models and processes that require regulatory authorisation to continue carrying out full or ancillary technology-driven capital market activities.

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The RI Program has thus been conceived as an interim measure to aid the evolution of effective regulation which accommodates the innovation by fintechs without compromising market integrity and within limits that ensure investor protection.

It was disclosed that review of completed Fintech Assessment Forms will continue on an ongoing basis and those who consider that there is no specific regulation governing their business models or who require clarity on the appropriate regulatory regime for seeking the authorisation of the commission, are encouraged to complete the Fintech Assessment Form.

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Economy

NGX Suspends Trading on GTBank Shares Ahead of Delisting

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GTBank Branch

By Dipo Olowookere

In preparation for the eventual delisting of shares of Guaranty Trust Bank (GTBank) Plc from its trading platform, the Nigerian Exchange (NGX) Limited on Friday, June 18, 2021, placed the banking stock on a full suspension.

GTBank, a tier-one lender trading its equities on the exchange, intends to transform into a financial holding company (Holdco) so as to offer a wide range of services it is restricted to do.

Some years ago, the Central Bank of Nigeria (CBN) directed banks in the country to offload their subsidiaries not performing core lending services.

This was after many deposit money banks (DMBs) were delving into different business ventures, including insurance, stockbroking, asset management, amongst others.

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For the CBN, which regulates the banking industry in Nigeria, most of these banks were losing focus and were not supporting businesses that need funds to grow and then stimulate the economy in the process.

To address this issue, the apex bank asked banks to sell off their non-banking assets and this forced many of them to offload their companies not offering core banking services.

However, there was an opening for banks to still delve into other sectors within the financial and capital markets and this was by operating as a Holdco.

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A few of them towed this path, including FBN Holdings, Stanbic IBTC Holdings and FCMB Group.

Not wanting to be left out, GTBank is joining the party and to achieve this, it is delisting its banking arm, which is the popular GTBank from the stock exchange.

GTBank will now operate as a private company, while the new Holdco, Guaranty Trust Holding Company Plc, will now be a public company. The shares of this new firm will be listed on the NGX after the delisting of GTBank.

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Last Friday, the stock exchange informed the investing community of the latest development, announcing the suspension of trading on GTBank shares.

In the circular sighted by Business Post, the NGX explained that the rationale behind placing GTBank stocks on full suspension is to “prevent trading in the shares of the bank” in preparation of its “eventual delisting”

Before trading on its stocks was suspended on Friday, GTBank closed at N28.55 on Thursday after appreciating by 50 kobo or 1.78 per cent.

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Economy

DLM Capital Remains Best Structured Finance & Securitization Team in West Africa

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DLM Capital

A prominent developmental investment bank, DLM Capital Group, has emerged winner at the Capital Finance International (CFI) 2021 awards as the best-structured finance and securitization team in West Africa.

This award has been won consecutively in three years and affirms the group’s strong performance as a leading investment institution and asset manager.

CFI awards seek to identify the contributions of individuals and organizations that contribute significantly to the advancement of economies and truly add value for all stakeholders.

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DLM Capital Group creates bespoke business solutions for alternative financing and harnessing funds for growth.

The group focuses on four key sectors — consumer credit, agriculture, microfinance, and education with a mandate to reduce poverty and improve living conditions for Africans while mobilizing resources for the continent’s economic and social development.

“In the past three years, our portfolio management team’s performance has remained consistent, and our clients have benefited immensely from exposure to our solutions, including the NMRC securitization deal and the DLM Primero BRT Securitization,” said Head of Corporate Communications and Marketing, DLM Capital Group, Ms Chinwendu Ohakpougwu.

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“We are positioned to provide services to an expansive client base of retail, high net-worth and institutional customers.

“DLM Capital Group remains committed to constantly providing financial solutions that will enable our clients to make a difference, and we are honoured to be recognized once again as a reflection of the quality of support offered to our clients,” she added.

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DLM has won recognition in West African capital markets, acting as a sole arranger to over 80 per cent of structured finance transactions in Nigeria — and all the securitization transactions. It provides deal structuring, advisory execution and capital raising services across the Nigerian capital market.

The institution recently launched an asset financing scheme and is preparing a venture into digital banking under its subsidiary, Sofri.

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