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U.S.-China trade war ends 1 million U.S. jobs promise – Jack Ma

By Business Desk,

Alibaba Chairman, Jack Ma said the company can no longer meet its promise to create 1 million jobs in the United States due to U.S.-China trade tensions, Chinese news agency Xinhua reported on Wednesday.

Ma has already warned that the trade war between the world’s two largest economies could last decades and that China should focus exports on the “Silk Road” trade route, citing Africa, Southeast Asia and Europe.

Ma met U.S. President Donald Trump two years ago and laid out the Chinese e-commerce giant’s plan to bring one million small U.S. businesses onto its platform to sell to Chinese consumers over the next five years.

“This commitment is based on friendly China-U.S. cooperation and the rational and objective premise of bilateral trade,” Ma told Xinhua on Wednesday.

“The current situation has already destroyed the original premise. There is no way to deliver the promise.”

While Ma had not detailed how he would add those jobs, he has said that he wanted to encourage American small businesses to sell on Alibaba marketplace Tmall and Taobao, reasoning that every new business that joined the platform would have to hire a person to manage the extra sales.

Investors seemed unfazed by Ma’s comments, with Alibaba shares closing up 3.8 percent on Wednesday. They have declined 5.7 percent so far this year, including those gains.

Trump on Monday imposed 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated.

China responded a day later with tariffs on about $60 billion worth of U.S. goods as planned, but reduced the level of tariffs it will collect on the products.

Ma’s latest comments come on top of others he recently made about the escalating trade skirmish and show his support for Beijing’s stance on how additional tariffs will affect businesses and the country’s cornerstone One Belt One Road foreign policy initiative.

“The U.S. like competition, China likes harmony, they’re two different cultures,” Ma said at an investor conference in Shanghai on Tuesday.

Nigeria records first strong GDP growth after recession

By News Desk,

The Nigerian Bureau of Statistics (NBS) has reported that for the first time since Nigeria’s exit from recession, the Gross Domestic Product (GDP) has recorded growth.

Driven by the non-oil sector, GDP which grew by 2.05 per cent in the second quarters of 2018 represented the strongest growth in non-oil GDP since fourth quarter of 2015.

“Non-oil GDP growth was -0.18% in Q1 2016, -0.38% in Q2 2016, 0.03% in Q3 2016, -0.33% in Q4 2016, 0.72% in Q1 2017, 0.45% in Q2 2017, -0.76% in Q3 2017, 1.45% in Q4 2017and 0.76% Q1 2018.

“GDP grew strongly in Q2 2018 by 2.05%. Non-oil growth was driven by transportation which grew by 21.76% supported by growth in construction which grew by 7.66% and electricity which grew by 7.59%.

“Other non-oil sectors that drove growth in Q2 2018 include telecommunication which grew by 11.51%, water supply and sewage which grew by 11.98% and broadcasting which grew by 21.92%.’’

The non-oil sector performance was however constrained by agriculture that grew by 1.3% compared to 3.00% in Q1 2018 and 3.01% in Q2 2017.

Q2 2018 GDP growth was also constrained by oil GDP with crude oil and gas production contracting by -3.95% compared to 14.77% in Q1 2018 and 3.53% in Q2 2017

Services GDP recorded its best performance in 9 quarters, growing by 2.12% in Q2 2018 compared to -0.47% in Q1 2018 and -0.85% in Q2 2017.

Statistician General and Chief Executive Officer of National Bureau of Statistics (NBS), Dr. Yemi Kale, last week denied reports quoting that Nigerian economy had yet to recover from recession.

Kale categorically said that Nigeria was out of recession and that at no time did he suggest otherwise.

His denial was contained in a statement released on Monday by the Bureau’s Public Relations Officer, Mr. J. Ichedi.

NBS said that it reported in the second quarter of 2017 that the country was out of recession as the country recorded the first positive growth in Gross Domestic Product (GDP) following five quarters of contradiction.

He said that economic growth as measured by GDP has remained positive ever since with 0.72% in second quarter of 2017; 1.17% in third quarter of 2017; 2.11% in fourth quarter; and 1.95% in first quarter of 2018.

Ichedi said that NBS had continued to explain that there would be economic recovery after the recession.

The economic after recession moves gradually towards sustainable strong growth which “is the stage we are now’’.

This is the position which the CEO told Arise Television in an interview, he said.

The CEO, he said, told the television that the economy was in the second state of recovery and heading toward sustainable growth which is the last stage’’.

“This should not be wrongly interpreted as the economy is still in recession,’’ Ichedi said.

According to a report by a local newspaper on Monday, the Statistician-General was quoted to have lamented the performance of the nation’s economy in the second quarter of the year.

Nigerian banks are hiring more staff

By News Desk,

Nigerian banks are hiring more staff, indicating that the sector is booming.

The National Bureau of Statistics revealed in its latest report that the number of bank staff in the second quarter that ended in June, increased by 13.67 per cent, from 89,608 in first quarter to 101,861.’’

The NBS also said a total volume of 509,668,433 transactions valued at N32.90trn was recorded in the banking sector during the second quarter.

The NBS made this known  in its “Selected Banking Sector Data: Sectorial Breakdown of Credit, ePayment Channels and Staff Strength (Q2 2018)’’ report released in Abuja.

According to the report, Automated Teller Machine (ATM) transactions dominated the volume of transactions recorded.

It said 217,417,961 volume of ATM transactions valued at N1.6 trillion was recorded in the period under review.

“In terms of credit to private sector, the total value of credit allocated by the bank stood at N15.34trillion as at the second quarter.

“Oil and Gas and Manufacturing sectors got credit allocation of N3.45trillion and N2.02trillion to record the highest credit allocation as at the period under review.

Ethiopian Airlines leads bids for Nigeria Air

By Business Desk,

Ethiopian Airlines already has contracts for maintenance work with two Nigeria-based carriers, Arik Air and Medview Airline, he said.

In May, Tewolde told Reuters that the airline was in talks with Chad, Djibouti, Equatorial Guinea and Guinea to set up carriers through joint ventures. It aimed to create a new airline in Mozambique that it will fully own, the chief executive said at the time.

In June Ethiopia said it would open Ethiopian Airlines and other companies including the telecoms monopoly up to private domestic and foreign investment, but details have not yet been made public.

Tewolde also said that net profit in the 2017/18 financial year rose to $233 million from $229 million the previous year. Ethiopia’s 2017/18 financial year ended last month.

The airline’s operating revenue rose by 43 percent to $3.7 billion in the 2017/18 financial year.

FG, BoI launches direct traders empowerment initiative in Lagos, plan for 2M Nigerians

By Abdulwaheed Usamah

As part of measure  addressing level of poverty in Nigeria, the Federal Government (FG) and Bank of Industry (BoI) have launched an empowerment program, solely designed to assist petty traders boot their businesses, with aim to ensure two million Nigerians directly benefit from the initiative.

Specifically, representatives of both FG and BoI said that the initiative, tagged ‘Traders Moni’, was created to support traders and also address issued non accessibility of average Nigerians to load.

They disclosed that no fewer than hundreds of traders, particularly market women, received N10,000 loan respectively, in Lagos State, where it had kicked off and that it would soon spread across the country in due time.

The Executive Director, Bank of Industry, Toyin Adeniji, indicated that the launched initiative was a demonstration that the bank was not relenting on measure that would make Nigerians have access to loan irrespective of status or level of education.

Briefing journalists at unveiling of ‘Trader Moni’ initiative at Ojuwoye market in Mushin, Lagos on Tuesday,  Adeniji said that the programme which kicked off nationwide,  would support 2 million Nigerians to grow their business.

She informed that the goal of the scheme was to take financial inclusion down to the grass root whereby pure water seller, bead seller, food seller, okada rider among others can access loan to expand their business without any collateral.

The bank’s head claimed that President Muhammadu Buhari led administration recognised contribution of petty traders to economic development and that presidency had concluded to ensure market people enjoy dividend of democracy since it knew they may lack requirements for bank loans.

“The government identified the fact that some of them may not have what the commercial banks may required to grant loan, so he support this initiative to help them grow their business”.

“This ‘Trader Moni’ initiative is a mobile phone driven, after your details have been captured by agent and send to BOI system for validation, within 48 hours you will get cash notification in your mobile wallet account. You can either transfer the cash to your bank account or cash it out in any mobile money agent around.

“At the beginning you can access N10,000 and pay back N10,250 to qualified for N15,000. Once you payback N15,375 you will qualify for N20,000 loan, when you pay back N21,000 you will get N50,000. All these stages have duration of six months interval to pay back.”

“If you wish you can pay back before six month grace elapsed and access bigger loan. To pay back, just entered some of the backs we have partnered with such as Fidelity, Wema Bank, Gt Bank, UBA, Heritage Bank, Stanbic Bank, Sterling Bank, Union Bank Jaiz Bank, tell them that you want to pay BOI-GEEP loan for PayDirect.

Besides, Chief Operating Officer, Government Enterprise and Empowerment Programme, GEEP,  Uzoma Nwagba, noted that GEEP has three product, including that of ‘farmer Moni’, meant for farmers which avail them opportunity to access up to N300,000 loan each.

“We have ‘Market Moni’ which target market women, traders and artisans that are little bigger and more structured, they get between N50,000 and N100,000. The whole initiative is available across the country.

Nwagba urged beneficiaries to ensure they pay back to avail other opportunity to benefit, “All this initiative aimed to expand financial inclusion because we have over 23 million Nigerians that are financially excluded, this administration aimed to reach them so that they can grow their businesses.

China cuts banks’ reserve requirements to boost lending, as trade war looms

By News Desk, with Agency Report,

China’s central bank said on Sunday it would cut the amount of cash that some banks must hold as reserves by 50 basis points (bps), releasing $108 billion in liquidity, to accelerate the pace of debt-for-equity swaps and spur lending to smaller firms.

The reserve reduction, the third by the central bank this year, had been widely anticipated by investors amid concerns over market liquidity and a potential economic drag from a trade dispute with the United States.

But the 700 billion yuan ($107.65 billion) in liquidity that the central bank said will result from the reduction in reserves was bigger than expected.

Expectations of a cut had risen after the State Council, or cabinet, said on Wednesday monetary policy tools including targeted cuts in banks’ reserve requirement ratios will be deployed to strengthen credit flows to small firms and keep economic growth in a reasonable range.

Economists are not ruling out further reserve requirement reductions for the rest of the year as borrowing costs rise due to Beijing’s clamp-down on leverage in the financial system, a campaign now in its third year, while uncertainty over Sino-U.S. trade ties persists.

The People’s Bank of China (PBOC) said on Sunday that the latest targeted cut in some banks’ reserve requirement ratios (RRRs) – currently 16 percent for large banks and 14 percent for smaller banks – will take effect on July 5.

The PBOC said the cut will release about 500 billion yuan ($77 billion) for the country’s five large state banks and 12 national joint-stock commercial banks. Lenders are encouraged to use the money to conduct debt-for-equity swaps.

China’s policymakers have been pushing for debt-for-equity swaps since late 2016 to ease pressure on firms struggling with their debts.

The country’s top banks, controlled by the government, have rushed to sign deals with state-owned enterprises to ease their debt burden and give them time to turn around their business and improve their creditworthiness.

The latest RRR cuts will also release about 200 billion yuan in funding for mid-sized and small banks to increase lending to credit-strapped small businesses, the PBOC said.

The combined 700 billion yuan liquidity injection exceeded market expectations of 400 billion yuan. In the PBOC’s last targeted RRR cut in April, 400 billion yuan of net liquidity was released.

“The intensity of the move exceeded market expectations,” said Wang Jun, Beijing-based chief economist at Zhongyuan Bank.

“This move will help support the real economy and stabilize financial markets. We’ve seen rising debt defaults and funding strains on small firms, as well as a sharp adjustment in the capital market.”

But the latest reserve cut signals a “policy fine-tuning,” not a policy reversal, Wang said.

The central bank said on Sunday it will keep monetary policy prudent and neutral.

Sunday’s announcement followed the worst weekly loss in the Chinese stock market since early February as fears of a full-blown trade war with the United States weighed.

The Chinese yuan on Friday also fell to its lowest versus the dollar in more than five months, though it has remained firm against a basket of trading partners’ currencies, and a sharp depreciation is not in the cards.

TRADE WAR

The latest RRR cut is set to take effect a day before the United States and China are expected to begin collecting increased tariffs on respective lists of goods.

Fears of a full-scale trade war with Washington have magnified concerns about the outlook for the world’s second-largest economy, following weaker-than-expected Chinese growth data for May and as Beijing’s financial regulatory crackdown starts to weigh on business activity.

Net exports overall were already a drag on growth in the first quarter after giving an added boost to the Chinese economy last year, highlighting the need for sustained strength in domestic demand if significant new U.S. tariffs are imposed.

Beijing is also likely to backtrack on efforts to reduce its reliance on debt if the dispute escalates into an all-out trade war, some economists say.

Beijing’s financial risk clamp-down has already slowly pushed up borrowing costs, and is restricting alternative, murkier funding sources for companies such as shadow banking.

Strained liquidity conditions have caused a growing number of credit defaults with private companies facing mounting refinancing risks. Latest official surveys also showed tight funding has hit smaller manufacturers.

The weighted average lending rate for non-financial firms, a key indicator reflecting corporate funding costs, rose 22 basis points in the first quarter to 5.96 percent, PBOC data showed. That compared with a total of 47 basis points in 2017.

Policymakers have been trying to strike a delicate balance between the need for tougher supervision and reforms and ensuring the stability of the financial system, while keeping economic growth on track.

ANZ Research said on Sunday that it still expects another 50 bps RRR cut in October.

Economists still expect China’s economic growth to slow to 6.5 percent this year from 6.9 percent in 2017, citing rising borrowing costs, tougher limits on industrial pollution and an ongoing crackdown on local governments’ spending to keep their debt levels in check.

($1 = 6.5027 Chinese yuan renminbi)

Minister of Finance, Kemi Adeosun

Oil sector 2018 Q1 performance still below 10% GDP

By NewsDesk,

A report released by National Bureau of Statistic on performance of oil sector’s contribution to Nigeria’s Gross Domestic Product, has indicated that industry remains below 10 per cent in Q1 figures of the nation’s GDP .

However, the office reported on Monday that the nation’s GDP grew by 1.95 per cent year-on-year- in real terms in the first quarter of 2018, but that the nation recorded some growth in the oil sector during the period, the contribution formed only 9.61 per cent of the total, with the non- oil sector accounting for the rest.

It said that the development had an increase in the daily oil production to an average of 2.0 million barrels per day (mbpd), higher than the 1.95 mbpd in the fourth quarter of 2017.

As gathered from report,  real growth of the oil sector was 14.77 per cent (year-on-year) in first quarter of 2018, representing an increase of 30.37 per cent points relative to rate recorded in the corresponding quarter of 2017.

According to the NBC, quarter-on-Quarter, the oil sector grew by 13.24 per cent in first quarter, 2018 and the growth was up from 8.53 per cent in the first quarter and 7.35 per cent in the fourth quarter recorded in 2017.

“In comparison, non-oil sector grew by 0.76 per cent in real terms during the quarter under review.This was higher by 0.04 per cent point compared to the rate recorded same quarter of 2017 and 0.70 per cent point lower than the fourth quarter of 2017”.

The report showed that the sector’s growth was driven mainly by agriculture (Crop production), financial institutions and insurance, manufacturing, transportation and storage as well as information and Communication.

In it,  the Non-Oil sector contributed 90.39 per cent to the nation’s GDP, lower than 91.47 per cent recorded in the first quarter of 2017 and 92.65 per cent recorded in the fourth quarter of 2017, while in overall, the Nigerian Gross Domestic Product (GDP) grew by 1.95% (year-on-year) in real terms in the first quarter of 2018.

The bureau stated that the figure revealed that a stronger growth compared with the first quarter of 2017, which recorded a growth of –0.91 per cent indicating an increase of 2.87 per cent points, and that compared to the preceding quarter, there was a decline of -0.16% points from 2.11%, NBS said.

It related that quarter on quarter, real GDP growth was -13.40% as oil production estimates for the third and fourth quarters of 2017 have been revised and oil GDP for those quarters have been adjusted accordingly.

According to NBS figures, aggregate GDP for the first quarter stood at N28.4 trillion in nominal terms.

“This performance is higher when compared to the first quarter of 2017 which recorded a nominal GDP aggregate of N26.028 trillion thus, presenting a positive year on year nominal growth rate of 9.36%. This rate of growth is however lower relative to growth recorded in Q1 2017 by -7.70% points at 17.06% but higher than the proceeding quarter by 2.14% points at 7.22%.

NNPC proposes petroleum licenses split, prospecting, production

By NewsDesk,

Pre-planning and proper projection of activities within oil and gas sector, to foresee unprecedented, are the only ways to go, the precaution of which may have led to Nigerian National Petroleum Corporation (NNPC) proposal of splitting of petroleum licences into two components for prospecting and production phases under draft Petroleum Industry Administrative legislation currently before the National Assembly.

Specifically, the proposed split, as aimed, would prevent a situation where operators would sit perpetually on oil acreages and NNPC’s recommendation under PIAB seeks a break up of Petroleum Licence into Petroleum Exploration Licence (PEL) – to prospect for petroleum, while the second component to be known as Petroleum Lease (PL), should be created to cover the production phase to search for, win, work, carry way and dispose of petroleum.

The Group Managing Director, NNPC, Dr. Maikanti Baru, discloed that aside of the posposed split, corporation also pushed for a re-think on duration of licences as recommneded in the PIAB which stipulates initial duration of 25 years for onshore and shallow water petroleum licence and 30 years for deep water and frontier acreages.

At a Public Hearing organized by House of Representatives Committee on the Petroleum Industry Administrative Bill (PIAB), Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Industry Host Community Bill (PIHCB),  NNPC, Baru also proposed five years prospecting licence for onshore and shallow fields and a duration of 10 years for deep offshore and frontier basins.

He also recommended 20 years production lease for onshore and shallow fields as well as deep offshore and frontier basins. The corporation noted that only the production lease period should be renewed for a period not exceeding 20 years.

On the PIFB version of the proposed oil industry law, the NNPC’s boss recommended a three-stage licences regime consisting of: Exploration Licence (EL) – to explore for petroleum on a non-exclusive basis; Petroleum Exploration Licence (PEL) – to prospect for petroleum on exclusive basis; and Petroleum Lease (PL) – to search for, win, work, carry away and dispose of petroleum.

Beyond the clause by clause recommendations, the corporation also advocated for the simplification of the fiscal system for ease of implementation and to ensure progressivity.

It called for expunging all regulatory issues out of the draft legislation to empower the Commission to regulate the industry effectively.

NNPC highlighted the need to introduce and provide clauses that will ensure easy review of provisions of the bill in response to economic, technical and other considerations, while disallowing legislation on issues bordering on contracts.

Chairman of the House Committee, Honorable Abdulrazak Namdas, thanked the NNPC for its contribution, noting that the committee would sift through all the submissions by stakeholders before taken informed decisions on the issues.

Nigerian Q1 importation capital hits over $6M

By NewsDesk,

Despite political pressure mounting across nooks and crannies of Nigeria as 2019 election draw near, the National Bureau of Statistics (NBS) has disclosed that against all odds, Nigeria’s capital importation in first quarter of 2018 was fair for the economy, with $6,303.63 million been recorded for the period.

Through Nigerian Capital Importation for First Quarter for 2018 reported released on Friday in Abuja, the office hinted that the value of capital imported in the quarter recorded an increase of 594.03 per cent, year-on-year and a 17.11 per cent growth over the figure reported in the previous quarter.

It added that the quarter saw a continuous growth in total Capital Importation into the country, making it the fourth consecutive quarterly increase since the second quarter of 2017.

The report indicated that the increase in capital inflow in the quarter under review was driven mainly by Portfolio Investment.

According to the bureau, Portfolio investment grew from 3,477.53 million dollars in the previous quarter to 4,565.09 million dollars.

The report said the amount recorded by portfolio investment accounted for 72.42 per cent of the total Capital Importation during the quarter and that capital importation made up of three main investment types: Foreign Direct Investment (FDI), Portfolio Investment and Other Investments.

It informed that since the second quarter of 2017, Portfolio Investment had been expanding faster than the other two categories, adding that, that Porfolio Investment was the largest component of the capital imported in the first quarter of 2018 at 35 per cent of total capital imported.

“Foreign Direct Investment and Other Investment accounted for 3.91 per cent and 23.67 per cent of total Capital Importation into the country in the quarter under review”.

The bureau reported that FDI stood at 246.62 million dollars, falling by 34.83 per cent from the figure reported in the previous quarter, and growing by 16.67 per cent on a year-on-year basis and that Foreign Direct Investment in Nigeria was still weak when compared to Portfolio Investment and Other Investment, representing only 3.9 per cent of total capital imported.

The office noted that Equity Investment, a sub-category under FDI contributed 246.61 million dollars or 99.9 per cent of FDI during the quarter, while Other Capital under FDI contributed less than 0.001 per cent.

Meanwhile, the report maintained that Portfolio Investment remained the largest component of total capital inflow into Nigeria in the first quarter of 2018, just as it explained total value of Portfolio Investment was 4.565.1 million dollars, which was 1,355.66 per cent growth compared to first quarter, 2017 and 31.27 per cent growth compared to the figure reported in fourth quarter, 2017.

As recorded,  the strong growth of Portfolio Investment was mainly due to the increase in Money Market Instruments which recorded a figure of 3.527.60 million dollars and the development accounted for 77.27 per cent of total Portfolio Investments in the first quarter.

Nestle tops NSE gainers table, Forte oil, others follow suit

By NewsDesk,

The Nigerian Stock Exchange (NSE) table has indicated Nestle was leading gainers’ with N71.10, to close at N1, 493.60 per share.

Besides, Forte Oil followed with a gain of N4 to close at N43.30, while Zenith International Bank added 70k to close at N27.90 per share.

Dangote Sugar was not exempted from the table, with 45k increase to close at N21, while Dangote Flour grew by 35k to close at N13.70 per share.

While the five companies top gainers table, Nigerian Breweries appeared to be losers’ leader by topping chart with a loss of N4.70 to close at N125 per share, against Conoil that trailed with a loss of N1.65 to close at N31.80, while Julius Berger declined by N1.35 to close at N25.65 per share.

After the two companies, GlaxosmithKine depreciated by N1.20 to close at N23.30, while Stanbic IBTC shed N1.10 to close at N48.90 per share and Transcorp drove the activity chart with an exchange of 35.38 million shares worth N66.22 million.

Zenith Bank followed with an account of 24.57 million shares valued at N682.21 million, while Caverton traded 19.39 million worth N52.35 million.

FBN Holdings exchanged 19.39 million shares valued at N259.29 million, while Guaranty Trust Bank sold 18.52 million shares worth N805.26 million.

Also, transactions at the exchange rose marginally with indices increasing by 0.10 per cent.

Market capitalisation rose by N14 billion or 0.10 per cent to close at N14.738 trillion against N14.724 trillion on Monday.

All-Share Index which opened at 40,763.93 rose to 38.85 points or 0.10 per cent to close at 40,802.78 following Nestle gain.

In all, the volume of shares traded closed lower with a total of 246.58 million shares valued at N3.22 billion transacted in 4,918 deals.

This was in contrast with 530.22 million shares worth N7.77 billion traded by investors in 4,567 deals on Monday.