Nigeria’s foreign exchange crunch worsen as inflows slow - Business News Report The Central Bank of Nigeria reported a decline in foreign exchange inflow to $72.4 billion in 2022, compared to $94.3 billion in 2021 and $115.6 billion in 2020. Capital importation decreased by 20.5% to $5.33 billion, with FDI dropping by 33% and portfolio investment declining by 27.9%.
Nine DMBs Failed to Meet CBN’s 65% LDR Requirement in 2022 - This Day Leading banks in Nigeria, including Access Holdings, GTCO, UBA, and Zenith Bank, failed to meet the CBN's 65% Loans-to-Deposit Ratio (LDR) in 2022. The LDR policy aims to boost lending to the real sector, but banks have faced challenges due to macroeconomic issues and non-performing loans.
Weakened naira pushing up Nigeria’s public debt – IMF - Punch Sub-Saharan African currencies, including Nigeria's, are weakening and increasing public debts, says the IMF. With an average depreciation of nine percent since January 2022, these currencies face inflationary pressures due to higher import prices. External factors and global market conditions drive the currency depreciation.
Analysts Foresee Further Increase in MPR as Inflation Soars - This Day Nigeria's inflation has hit a record high of 22.22%, leading analysts to predict a further increase in the Monetary Policy Rate (MPR). Food prices, particularly tomatoes, have surged, contributing to the inflationary trend. Analysts expect a 25 basis points hike in the MPR at the next meeting. The food demand-supply gap is expected to keep inflation figures trending upwards.
Net FX inflow declined to $72bn in 2022 –CBN – The Sun Nigeria's 2022 net FX inflows amounted to $72.4 billion, a 23.3% decline. The decrease resulted from halted sales to BDC operators, leading to a drop in external reserves to $37.1 billion. Nigeria faces challenges with FX inflows, impacting the local currency. The CBN remains optimistic about economic growth but acknowledges global demand contraction and security issues as headwinds.
Manufacturers threaten shutdown over excise duty hike - Punch
MAN warns that the excise duty increase for beverages and tobacco will lead to factory closures, job losses, and reduced exports. President Francis Meshioye criticizes the government for breaking its promise and implementing an additional hike. The manufacturing sector, already facing challenges like naira scarcity and limited forex access, has seen a significant decline in profit and turnover in the brewing sector.
Global
After back-to-back months of declines, US retail sales rebounded in April, albeit less so than expectations.
Consumer spending accounts for roughly 2/3 of GDP.
Sales increased 0.4% on the month (vs. 0.8% expected) as consumer spending holds steady despite rising prices and high interest rates.
Seven out of 13 categories saw growth.
On an inflation-adjusted basis, however, retail sales have been flat for ~2 years.
BofA released its latest Global Fund Manager Survey - here are some highlights:
65% expect a weaker economy ahead.
Long big tech and short US banks is considered the most crowded trade.
Most respondents are underweight US equities.
They are most overweight bonds, staples, and cash.
Bond allocations are now at their highest since 2009.
The International Energy Administration (IEA) raised its global oil demand forecast to 102 million barrels per day.
The agency points to a strong recovery in Chinese demand as the leading factor for the increase.
Recent industrial output and retail sales data in the region, however, have fallen short of expectations.
Meanwhile, US inventories of crude oil increased by ~3.7 million barrels last week.
UBS expects $17 billion hit from Credit Suisse rescue, flags hasty due diligence - CNBC
UBS expects a financial impact of approximately $17 billion due to its emergency takeover of Credit Suisse, according to a regulatory filing. The rushed deal may have affected the due diligence process, the filing stated. UBS disclosed a negative impact of around $13 billion in fair value adjustments for the combined entity's assets and liabilities, as well as a potential $4 billion impact from litigation and regulatory expenses.
Venture-Fund Returns Show Worst Slump in More Than a Decade - WSJ
The languishing performance of venture-capital funds is denting results for university endowments, pensions and other investors that increased their tech exposure during the bull market.
The U.S. now spends more money on servicing its debt than national defense.
Weekly Investment Watchlist
The Week Ahead:
Monday: US NY Empire manufacturing comes in at -31.8; est: -4.0.
Tuesday: Retail sales, industrial & manufacturing production, business inventories, NAHB housing market index
Wednesday: Building permits, housing starts
Thursday: Initial jobless claims, Philly Fed manufacturing, existing home sales, CB leading index
Friday: Powell speech
Investment Tip of The Day
Having a cash reserve can be a valuable risk management tool, as it gives you the flexibility to weather short-term market fluctuations or unexpected expenses without having to sell your investments at a loss. Aim to have enough cash on hand to cover 3-6 months' worth of living expenses.
Meme of the Day
Disclaimer: The information contained in this report is intended for informational purposes only and should not be considered as investment advice. The information is obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.
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