E-Financial
Rising Covid-19 Cases Keep Risk Assets Under Pressure
By Hussein Sayed, Chief Market Strategist at FXTM
Equity markets kicked off Monday on the back foot following three weeks of consecutive declines in US stocks, which marked the longest weekly losing streak since 2019. Investors are becoming increasingly worried about the momentum in the economic recovery given the resurgent numbers of global Covid-19 cases and lack of progress on a new US stimulus package.
Although President Trump signaled his readiness to back a bigger stimulus bill last week, the Supreme Court’s empty seat left by the passing of Ruth Bader Ginsburg is likely to complicate the matter. The fight between the President and Congressional Democrats on whether to fill the vacant seat now or wait until after the election is expected to lead to more delays in reaching a middle ground on a new fiscal package. Hence, we would expect that the much-needed stimulus will be pushed back until after the US elections.
Given that the list of uncertainties is growing, especially on the pandemic front, risk is now skewed to the downside. We have US elections just around the corner, hefty valuations in growth sectors despite the recent correction and the high stakes of possible national lockdowns in the UK and elsewhere all pointing to waning momentum in the economic recovery. All these factors indicate more volatile times for the next several weeks.
Datawise, investors need to keep a close eye on September’s flash PMIs coming out of Germany, France and the UK this week for further indications on how the big European economies are faring following the strong rebound in early Q3. Signs of weakness here will be a strong signal that the economic recovery is indeed losing its way and further action is needed from fiscal and monetary policymakers.
Currency markets are not yet reflecting the risk aversion seen in equities. The Dollar is trading slightly lower against its major peers, with the DXY -0.15% at the time of writing. The Fed is clearly the winner among other central banks in providing the most accommodative monetary policy, which means the long-term projections for the Dollar remain to the downside. However, if the selloff in US equities accelerates this week, expect the greenback to regain some support.
In commodity markets, Brent fell by 1% after trading slightly higher in early Asian trade. The battle between the bulls and bears is keeping prices rangebound between $40 and $45. At this stage, the demand outlook is far more important than the supply side. That’s why oil traders need to keep a close eye on the trajectory of the virus, especially if it’s going to lead to renewed lockdowns. Gold is also another commodity stuck in a narrow range as traders await new clues on the Fed’s policy approach towards inflation. This could happen later this week as Chairman Jerome Powell may provide new hints when he appears before the Congress on Tuesday.
E-Financial
Banks Lose N10Bn to Cyber Fraud in 2023’
Stakeholders in the banking and financial ecosystem, yesterday, decried the surge in cyber fraud as Deposit Money Banks (DMBs) lost N10 billion in the second quarter of 2023, representing almost 300 per cent year-on-year compared to the previous year.
At a Mastercard forum convened to tackle fraud and cybersecurity threats in the financial sector, Kari Tukur, vice president, Customer Solutions Centre, East and West Africa at Mastercard, said despite the massive awareness and innovations aimed at combating cybersecurity, the amount lost last year by DBMs was “staggering”.
She said, “With Nigeria’s rapidly growing economic expansion, we are starting to see an increase in the adoption of digital financial services, and the financial landscape is also evolving at an astronomical speed.
“What was staggering for me was in spite of the huge investment around innovation, funding in the cyber space, DBMs lost almost N10bn in Q2 last year, and that was almost 300 per cent growth year-on-year when compared to the previous year.”
She noted that there was the need for collaboration among stakeholders “to combat this rising sophistication of cyber security threat.”
Tukur further stated that Mastercard was deeply committed to cyber security and fraud prevention within the payment industry, disclosing that the company invested $250m “to assist small businesses in addressing their cyber security needs.”
She disclosed that Mastercard payment portals incorporated multiple layers of security such as tokenisation technology, encryption and biometrical to stay ahead of cyber attackers.
She added that, “The sector continues to struggle with the aforementioned challenges, necessitating vigilance, proactive action and comprehensive security strategy, and Mastercard remains committed to providing safe, secure and seamless payment services and experiences for our partners and customers in Nigeria and beyond.”
Celestina Appeal, chairman, Committee of e-Business Industry Heads (CeBIH), stated that the total loss to the banking industry in the last couple of years totalled hundreds of billions of naira while Nigeria’s Consumer Awareness and Financial Enlightenment Initiative had projected a $6trn loss by 2030 to cybercrime within and outside Nigeria.
Represented by Mr Temitope Onibaniyi, secretary of the committee, she stated that the committee was ever-willing to collaborate with industry stakeholders to fight against the perpetrators who “constantly rob banks and other stakeholders in the payments industry of their hard-earned money.”
She said the need for collaboration could not be overemphasised as no individual organisation was immune to cyber security attacks.
E-Financial
Tinubu Rejigs SEC Board, Makes New Appointments
President Bola Tinubu has approved the appointment of some Nigerian professionals to the Board of the Securities and Exchange Commission (SEC).
This is contained in a statement issued by Ajuri Ngelale, special adviser to the President on Media and Publicity.
Tinubu appointed Mr. Mairiga Aliyu Katuka as the Chairman of the board of SEC, while Mr. Emomotimi Agama has been appointed as the Director-General of the board.
The president also appointed Frana Chukwuogor as Executive Commissioner (Legal and Enforcement) of the board.
Tinubu further appointed Mr. Bola Ajomale as the Executive Commissioner (Operations) of the board, while Mrs. Samiya Hassan Usman is the Executive Commissioner (Corporate Services) of the board.
Also appointed into the board are Mr. Lekan Belo as Non-Executive Commissioner and Mr. Kasimu Garba Kurfi as Non-Executive Commissioner.
According to Ngelale, the president anticipated that “all members of the Board of this critical commission will bring to bear their wealth of experience and competence in advancing the commission’s core mandate of developing and regulating a capital market that is dynamic, fair, transparent, and efficient, to bolster investor confidence and contribute immeasurably to the nation’s economic development.”
E-Financial
Ecobank Repays $500m Eurobond
Ecobank has announced the successful repayment of its $500 million five-year Eurobond issued in 2019. According to a statement filed on the Nigerian Exchange Limited (NGX), the Eurobond garnered considerable interest from a diverse range of global investors, including long-term development partners such as FMO and Proparco, who served as anchor investors.
Commenting on this achievement, Ecobank Group Financial Officer, Ayo Adepoju, said: “The bond was listed on the main market of the London Stock Exchange with a coupon rate of 9.5 per cent. The principal and interest repayment, totalling $524 million, was distributed to bondholders through the transaction agent on the bond maturity date of April 18, 2024.
“This inaugural bond we are retiring today was critical in introducing our firm to a wider array of global investors and contributed to the increased visibility of our brand in the capital markets.”
Against the backdrop of challenges posed by the global operating environment, including disruptions in the world supply chain and financial markets, Adepoju highlighted the Group’s resilience. He cited strong liquidity, a robust balance sheet, and a solid leadership team as key factors enabling Ecobank’s success.
He added that the successful repayment of the Eurobond underscores Ecobank’s commitment to financial stability and investor confidence, positioning the firm for continued growth and success in the global market.
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