By Lukman Otunuga, Senior Research Analyst, FXTM
A ‘risk-on’ vibe is sweeping across financial markets after the US Trade administration (USTR) announced that it will remove some items from its target list and delay the 10% tariffs on certain Chinese goods until December.
This unexpected development is stimulating risk appetite while reviving hopes that the two largest economies in the world will eventually find some middle ground on trade. Asian stocks rallied on Wednesday thanks to the improving market mood and this positivity should support European shares.
While this burst of positivity and renewed optimism over China and the United States resuming trade talks in two weeks is good news for global sentiment, investors should remain cautious. It is worth keeping in mind that the US is still moving forward with 10% tariffs on much of the $300 billion in Chinese imports first disclosed in May. Global equity bears can still make an unwelcome return if tensions arise before the scheduled talks in two weeks, especially if geopolitical risks and global growth concerns dent investor confidence.
Chinese Yuan roars back to life
A return of risk appetite sent the offshore Yuan marching to a fresh one-week high against the Dollar on Tuesday.
The USDCNH tumbled below the 7.00 level as easing trade tensions boosted investor appetite for the Chinese Yuan. However, appetite towards the currency was later dampened on Wednesday by disappointing retail sales figures and industrial output figures, which fell to its slowest rate in 17 years in July. Nevertheless, the offshore Yuan still has potential to extend gains against the Dollar as easing tensions sweeten appetite for emerging market currencies. The USDCNH has scope to test 7.00 should 7.05 prove to be reliable resistance.
Oil rides higher on easing trade tensions
Oil bulls wasted no time in shifting to a higher gear on Tuesday following the Trump administration’s unexpected pull-back from a hardline stance on Chinese trade.
Oil prices have scope to push higher as easing trade tensions reduce fears over slowing global growth and faltering demand for Crude. The improving market mood should also support WTI Crude with prices trading around $56.35 as of writing. The daily close above $56.50 should encourage a move higher towards $57.43.
Commodity spotlight – Gold
Gold lost some of its allure on Tuesday, depreciating almost $50 from a 6-year high at $1535 after the United States surprised markets by delaying tariffs on some Chinese goods.
While Gold is seen extending losses in the near term amid the risk-on mood, the precious metal remains shielded by various core market themes. For as long as geopolitical tensions, Brexit uncertainty, global growth concerns and central banks easing monetary policy remain key themes, Gold bulls are in control.
Technical traders will continue to monitor how prices behave above the $1485 level. A breakdown below this point may open a path back towards $1470.
Stanbic IBTC Bank Disowns Lagos ATM Fraudster
Stanbic IBTC Bank PLC has disowned Tope Olajide, 22-year-old fraudster arraigned for theft of customers deposits.
The Bank said this in a statement on Wednesday.
The statement said: “The attention of the management of Stanbic IBTC Bank PLC has been drawn to news currently circulating in the media, about the alleged arraignment of staff of the Bank on charges bordering on the theft of customers deposits.
“The Bank would like to clarify that the defendant, a 22-year-old Tope Olajide, IS NOT, and was at no point in time an employee of Stanbic IBTC Bank PLC.
“The alleged culprit was apprehended around 7:30 am, on Thursday, 27 August 2020, by security operatives after he was exposed by CCTV footage using ATM cards he had allegedly stolen and converted, to make withdrawals from the accounts tied to the stolen ATMs.
“The CCTV footage also showed the alleged culprit pretending to assist customers at ATMs whilst also attempting to fraudulently dispossess the customers of their ATMs.
“He was subsequently arraigned before an Ikeja Magistrate Court on Monday, 14 September, for stealing the debit cards of two customers and using them to unlawfully withdraw the sum of N427,000.
“The Bank would also like to implore members of the public to be security conscious when conducting transactions at ATMs. Customers are advised to report any suspicious actions around them to security operatives who are usually stationed around the Bank’s ATMs, when carrying out transactions at any of our ATM locations.
“As an organisation, we hold dear the values of integrity, and we will continue to prioritise the safety of our customers effectively.”
Buhari Okays Establishment of CBN-Led Infraco
President Muhammadu Buhari has approved the establishment of an Infrastructure Company (Infraco) to be driven by the Central Bank of Nigeria (CBN) in partnership with the African Finance Corporation (AFC) and the Nigerian Sovereign Investment Authority (NSIA).
This is coming on the heels of the foreign reserves’ slump to $36 billion following a cocktail of monetary policy interventions by the apex bank to cushion the scathing effects of the COVID-19 pandemic on the economy.
Mr Godwin Emefiele, CBN governor, made these disclosures in Abuja at the annual conference of the Chartered Institute of Bankers of Nigeria (CIBN) with the theme: Facilitating a Sustainable Future: The role of Banking and Finance.
According to him, Infraco would enable the use of private and public capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.
“This entity would also be able to raise funds from the capital markets and mobilise long term finance to address some of our infrastructure needs, while providing reasonable returns to investors. “We believe this well-structured fund can act as a catalyst for growth in the medium and the long run. The support of the banking community will be important in achieving this objective.
“A well-built infrastructure system, comprising hard infrastructure such as roads and ports, and soft infrastructure such as broadband penetration, can have a multiplier effect on growth by enabling the expansion of business activities in the country”, he explained.
On foreign reserves, Emefiele attributed its crash to the decline in foreign exchange earnings and subsequent adjustments in the value of the naira to the dollar.
Amana Bank signs Comprehensive Software Deal with Path Solutions
Amana Bank, a leading Islamic bank in Somalia has announced that it has selected iMAL, the AAOIFI-certified core banking platform from Path Solutions to replace its legacy IT system and deploy a single, cloud-based digital banking platform to underpin its banking operations.
This is Path Solutions’ third win in Somalia after Premier Bank and MyBank Ltd. The company went through a lengthy competitive bidding to which all international suppliers were invited, before being selected as Amana Bank’s preferred technology partner.
According to a statement following the signing, Path Solutions will supply and install its flagship Islamic core banking platform iMAL in addition to its comprehensive digital suite at Amana Bank Somalia. The new digital software will provide instant 24/7 service availability with fast, inexpensive, easy and convenient online banking, frictionless payments and transfers, personalization, engagement and retention.
Abdirizak Hussein Malin, Chairman of Amana Bank Somalia commented, “As part of our strategy, Amana Bank has instituted a digital transformation plan that will help us meet the emerging needs of our customers and the increasing demands of innovation.
“Consequently, we required a partner with open and agile technology that will drive powerful change. We have chosen Path Solutions for its ability to deliver vital digital financial solutions at this critical time with its depth of experience supporting Islamic banks in Africa.
“The company has differentiated itself from other vendors in its unique ability to combine core Islamic values with modern digital banking solutions, and to fully comply with Sharia and banking regulations.
“We are confident that the new technology, proven to significantly improve levels of customer fulfilment, will transform our operations by driving incredible efficiency gains while also reducing risk, lowering overall IT costs via higher automation and lower maintenance spending”.
The new iMAL platform leverages artificial intelligence and machine learning to help financial institutions get predictive insights for better data-driven decision making. It will also help strengthen customer loyalty through enhanced security transactions.
“We are delighted to partner with a leading Islamic bank in Somalia on a project that will set a new standard in digital banking for the country. Today, every financial institution has an incredible opportunity to apply advances in cloud computing to redefine every aspect of its business”, said Mohammed Kateeb, Path Solutions’ Group Chairman & CEO.
“Somalia’s Amana Bank is a good example of this transformation to drive innovation forward and ensure much more secure banking experience, enabling customers to enjoy the nuances of non-stop banking with cloud-based services.
The bank will also benefit from the full Islamic coverage which bridges the gap between modern customer requirements and intrinsic Islamic values. Our multi-award winning Islamic core banking platform will support the delivery of innovative digital products that are both Sharia-compliant and specialized for Amana Bank’s retail and corporate customers”.
The new agreement was signed by Amana Bank’s Chairman Abdirizak Hussein Malin and Path Solutions’ Group Chairman & CEO Mohammed Kateeb on Sunday 6 September at Path Solutions’ Dubai office. The implementation will be delivered 100% in the cloud and 100% remotely amidst the COVID-19 lockdown.
NCC Threatens Illegal Users of GSM Boosters with Arrest, Prosecution
FG Launches Central Database for Stolen Asset Tracing
NCC Holds First Virtual Bi-Annual Meeting with Telcos
Ericsson Launches Integrated Packet Core Firewall to Boost 5G Core Security
Anambra Indicates Interest to Host NITDA’s South-East Zonal Office
Senate Alleges Multi-Billion Naira Fraud in NTA, Startimes Deal
IHS Holding Mulls Africa’s Biggest IPO worth $7Bn in US
New Regulatory Agency Coming for Nigeria Postal Sector
Pantami Excited as ICT’s Contribution to Nigeria’s GDP Increases to 17.83%
Chinese Phones with Built-in Malware Sold in Africa
- News2 days ago
Beware of COVID-19 Infected Poultry Smuggled into Nigeria- Customs
- E-Business2 days ago
Global Tech Giants Converge in Nigeria as TD Africa Births Tech Experience Centre
- News2 days ago
79% of Nigerian Parents do not Track their Children’s Location
- Broadcasting2 days ago
Lagos Traffic Radio Launches Live Report Motorcycles
- E-Financial2 days ago
Banker Dragged to Court over Alleged N25m Theft
- E-Business2 days ago
CWG Expands Offerings for HMOs with HealthExchange Platform
- E-Financial2 days ago
Paxful Aims To Offer Easy and Affordable Global Payment Solutions
- Telecom2 days ago
HMD Global Rolls out Android 10 Update for Nokia 2.1 Users in Nigeria