MarketWatch

[wanaj0]

Originally Posted by citizen

The yet to be announced 2009 budget is in for early controversy with the 36 state governors’ adoption of $50 benchmark to the $45 projected by the Federal Government.
This development is a rehash of the contention between the executive and the parliament in the run up to 2008 budget thus delaying its passage till March this year.
The executive in the 2008 budget proposal to the National Assembly in November 2007 benchmarked the fiscal policy on $53.83 but was later jerked up to $59. This increased expenditure and pushed the deficit from N468 billion to N554 billion.
Outcome of this is increase liquidity which pushes inflation to its current level of 13 percent as at September 2008.
The adoption was among the unanimous decisions of the 36 state governors at their meeting Monday night in Abuja where issues such as Niger Delta, 1999 constitution review, and the review of the revenue formula amongst others were deliberated.
The governors’ position on the benchmark seems in tandem with the National Assembly who though supports the Federal Government on it noted they might increase the 2009 budget benchmark from the projection.

Don't know why they make noise about this. Apart from using it to set how much goes to the excess crude oil account, you can set your bechmark at whatever you like. It is not as if they will be consulted before international traders buy the oil. Let them put whatever figure they like in the budget proposal. Reality will hit them when actual price start to determine their income.

[citizen]

Bailout Price Tag: $3.5T So Far, But 'Real' Cost May Be Much Higher
Posted Nov 12, 2008 10:16am EST by Aaron Task in Newsmakers, Recession, Banking
Related: AIG, FNM, FRE, XLF, ^DJI, ^GSPC, C
While the government is clearly spending a lot of taxpayers' money to bail out financial firms, the tally is even bigger than most Americans (economists and pundits included) are probably aware or willing to admit.

The bailout bonanza has gotten so big and happened so fast it's the true cost often gets lost in the discussion. Maybe Hank Paulson and Ben Bernanke prefer it that way because the tally so far is nearly $3.5 trillion, and that's before a likely handout for the auto industry.

Yes, $3.45 trillion has already been spent, as Bailoutsleuth.com details:

$2T Emergency Fed Loans (the ones the Fed won't discuss, as detailed here)
$700B TARP (designed to buy bad debt, the fund is rapidly transforming as we'll discuss in an upcoming segment)
$300B Hope Now (the government's year-old attempt at mortgage workouts)
$200B Fannie/Freddie
$140B Tax Breaks for Banks (WaPo has the details)
$110B: AIG (with it's new deal this week, the big insurer got $40B of TARP money, plus $110B in other relief)
Tallying up the "true" cost of the bailout is difficult, and won't be known for months if not years. But considering $3.5 trillion is about 25% of the U.S. economy ($13.8 trillion in 2007) and the U.S. deficit may hit $1 trillion in fiscal 2009, hyperinflation and/or sharply higher interest rates seem likely outcomes down the road.

At the very least, the possibility of the U.S. losing its vaunted Aaa credit rating -- which determines the Treasury's borrowing costs -- cannot be discounted.

Moody's has already said it's not in jeopardy of being lowered. But we really can't put much stock in what Moody's -- or S&P or Fitch -- say after the subprime debacle, can we? More importantly, the price of credit default swaps on U.S. government debt has been on the rise since the bailout train got rolling, as Barron's reports.

[citizen]

Oil futures settled in the red Wednesday as markets were inundated with mixed reports on the future of the global energy supply and demand.

The benchmark oil contract plunged $3.17, or 5.3%, to settle at $56.16 a barrel. This is the first time oil has closed at this price since January 2007.

Oil extended its decline in electronic trading on the New York Mercantile Exchange, breaking through the $56 level shortly after the close of floor trading. According to Alaron Trading Vice President Phil Flynn, that level represents an important technical barrier; now that it's broken -- oil could head significantly lower toward the $50 a barrel level.

Despite recent reports showing weakening in global energy demand, the International Energy Administration warned today that energy supplies won’t keep up with growth without substantial infrastructure investment.

“We cannot let the financial and economic crisis delay the policy action that is urgently needed to ensure secure energy supplies,” the IEA said in a release. "The credit squeeze could delay spending, potentially setting up a supply crunch that could choke economic recovery.”

According to the IEA, even though energy prices are presently trending lower, this supply squeeze can push energy prices dramatically higher in the long-run.

“While market imbalances will feed volatility, the era of cheap oil is over,” the release said.

In the short run, however, the data are more bearish. Indeed, numerous major energy consuming countries reported sharply lower economic growth expectations amid wide-spread financial turmoil.

The Energy Information Administration [EIA] corroborated these concerns in its Short-Term Energy Outlook report released today.

"The recent dramatic deterioration in the outlook for economic growth in the United States and the rest of the world has led to a significant reduction in [the EIA's] assumptions for world economic growth and projections of energy demand and prices," the report said.

The EIA also slashed its projection for the the average price of crude oil in 2009 to $63.50 a barrel, which would represent a 37% drop from 2008.

As wholesale energy prices slide, retail energy prices have slowly followed. Drivers paid $2.20 per gallon on average for regular gas nationwide, which is down from $3.21 last month, according to AAA's Daily Fuel Gauge Report.

Other energy markets were also lower:

Wholesale gasoline sunk six cents to settle at $1.25 per gallon -- the lowest level in exchange history;

Heating oil was lower bynine cents to settle at $1.84 per gallon;

Natural gas fell 30 cents to settle at $6.41 per million British Thermal Units.

Metal markets were mixed:

Gold was lower by $14.30 to $717.70 per troy ounce;

Silver traded lower by 33 cents to $9.48 per troy ounce;

Copper was up one cent to $1.65 per pound.

[citizen]

Dimon: Recession Could Trump Market Crisis
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SEND Associated PressBuzz up!Digg It StumbleUpon Reddit NEW YORK --The economy's downturn could end up being worse than the recent crisis in the financial markets, JPMorgan Chase & Co. (JPM: 34.57, -1.78, -4.89%) CEO Jamie Dimon said Wednesday at a banking conference.

"We think (the recession) could be deep; we don't know how deep," Dimon said. "We think the economy could be worse than the capital markets crisis."

He said the government's actions to pump cash into the financial system have been "powerful medicine" to help fix the dislocated financial markets. But even an eventual normalization in the markets "may not stop us from having a deep recession," Dimon said.

Many people still can't get financing, he said. And the troubles are so widespread that companies all over the world are stuck with bad investments on their hands and running for cover. Referring to billionaire investor Warren Buffett's adage about finding out who's been swimming naked when the tide goes out, Dimon said: "There are people swimming naked everywhere."

Financial institutions around the world have been slammed by both deteriorating consumer credit and turbulent financial markets.

JPMorgan Chase on Wednesday ratcheted up its expectations for losses from deteriorating home equity loans. The bank's home equity loan losses could rise as high as $850 million over the next several quarters, Dimon said. That was up from last month's forecast of losses of as much as $800 million in the coming quarters.

Expectations for losses from other loans -- credit cards, subprime mortgages and prime mortgages -- were the same as on Oct. 15, when JPMorgan reported an 84 percent drop in third-quarter earnings.

The bank anticipates credit card loss rates of about 5 percent in the fourth quarter, 6 percent at the beginning of 2009, and 7 percent by the end of 2009. It also expects subprime mortgage quarterly losses as high as $425 million in early 2009, and prime mortgage quarterly losses as high as $300 million.

"We have tightened consumer lending considerably," Dimon said at Merrill Lynch's banking and financial services

conference in New York. He added, though, "We're still lending. We're still in business."

JPMorgan Chase shares fell $1.78, or 4.9 percent, to close at $34.57 Wednesday

[citizen]

Guys I Am Highlighting These Grim Us Economic Forecasts And Commodity Prices For Two Reasons:-
1) Could Our Recent Bull Run Be Artificial And May Soon Run Out Of Steam And Should We Wait For The Peak Of The Rally And Sell Off To Maximise Our Investments?
Or
2) Looking At The New Exchange Rates Of Pound, Euro E.t.c. To The Naira; Are Some Investors Shifting Focus To Oushares E.g. Nigerians In The U.s. Escaping From Economic Turmoil There And Thus Giving Us An Impetus To Still Hold On To Our Stocks For Further Gains?

Anyway Thank God Cheap Intenational Air Fares Await Us All For Next Summer---who Says There Is No Silver Lining In Economic Clouds

[citizen]

Financial crisis: Economic progress in Africa to suffer - AFDB
Friday Ekeoba, Lagos - 13.11.2008

The prevailing global financial crisis around the world, is likely to diminish the considerable economic progress made in Africa over the last decade, the African Development Bank (AFDB) Group President, Donald Kaberuka, has said.


Addressing African ministers of finance, central bank governors and experts at the opening of a day-long Ministerial conference on the global financial crisis and its potential impacts on African economies in Tunis on Wednesday, Mr. Kaberuka emphasised that although African countries had, so far, not witnessed losses, he noted that the problem required a global solution.


“It is clear that the global slowdown will lead to a general contraction of the private sector and business closures, especially in sectors that depend on international demand.


“That cannot, but affect the health of the banking sector as defaults build up. Before the crisis, our continent’s economies were set to grow on average 6.5 per cent. Our current estimate is now revised downwards to 5 per cent,” he noted in an opening statement titled “Managing an uncertain economic landscape - The search for a global and inclusive solution

[hispy99]

NSE inaugurates trading floor in Abeokuta
By Ademola Oni, Abeokuta
Published: Thursday, 13 Nov 2008
Business activities are expected to receive a boost in Ogun State as a trading floor of the Nigerian Stock Exchange opens in Abeokuta, the state capital, on Monday, November 17.

The Director-General, NSE, Prof. Ndi Okereke-Onyiuke, is expected to inaugurate the trading floor at the premises of the South-West Resource Center, Oke-Mosan.

A statement by the Group Managing Director, Gateway Holdings Limited, Mr. Gboyega Isiaka, in Abeokuta on Wednesday, said the inauguration would swell the number of the automated trading floors of the NSE to 12 across the country.

Isiaka added that the inauguration of the floor would enhance the mobilisation of funds for capital development within the public and private sectors of the economy.

Though the inauguration holds at the South-West Resource Center, it was learnt on Wednesday that the 12-storey corporate headquarters of GHL, whose foundation would be laid on Monday by the Ogun State Governor, Otunba Gbenga Daniel, would eventually house the permanent floor of the NSE completion.

The Abeokuta floor of the NSE will be second in the South West, after Ibadan and is expected to facilitate on-line real time trading in quoted companies‘ stock, securities and financial instruments by stockbrokers and allied investors.

Meanwhile, the immediate past Chairman, Abeokuta Chambers of Commerce, Industry, Mines and Agriculture, Alhaji Tunji Labode, has described the conception and actualisation of the Abeokuta floor as a dream come true.

[hispy99]

SEC probes defaulting banks over private placement
From John-Abba Ogbodo, Abuja

THE Security and Exchange Commission (SEC) has begun investigations into the activities of some Nigerian banks particularly in the area of private placement with a view to sanctioning them.

The Director-General of the Commission, Alhaji Musa Al-Faki, disclosed this yesterday at an interactive session with the House of Representatives Committee on Capital Market which insisted that the Nigerian Stock Exchange (NSE) must be listed to participate in transactions like other operators.

Addressing members of the committee led by the chairman, Ahmed Aliyu Wadada, Al-Faki disclosed that the commission was worried by private placement by banks because it was illegal. He disclosed that to address the matter, SEC was collaborating with the Central Bank of Nigeria (CBN) and other relevant agencies with a view to identifying the affected banks and dealing with them.

"The CBN and Nigerian Deposit Insurance Corporation (NDIC) are giving us information and we are going to deal with all those involved in private placement," he said.

Speaking on the issue of demutualisation, Al-Faki said there was not much SEC could do, adding that the whole issue has to do with the NSE.

At this point, Wadada said there was no way NSE would not be demutualised, stressing that it could not continue to shrink the stock market in the country by remaining a private company. He cited the instances of London and New York exchanges, insisting that the country must embrace global practice.

His words: "Demutualisation will assist the market. NSE must be listed and quoted like the London and American exchanges. We will ensure compliance with the rules of the market. Every sector of the polity must be democratic. NSE is limited company and therefore small in ownership. The system is not as open as it should be. Since NSE is the engine of quoted companies, it must be listed and quoted as a Plc. We are putting in place the legal frame-work to facilitate that."

Meanwhile, Federal Inland Revenue Service (FIRS) yesterday said it was yet to receive the sum of N117.9 million paid as Value Added Tax (VAT) for the N2.3 billion vehicles purchased for members of House of Representatives by the management of the National Assembly.

Lagos-based lawyer, Festus Keyamo, had alleged that the management of National Assembly paid VAT twice for the vehicles.

At the resumed hearing of the House Committee on Ethics and Privileges yesterday, the Co-ordinating Director, Support Services Group of FIRS, Kabir Mashi, said FIRS was yet to receive the money from Peugeot Automobile of Nigeria (PAN).

"We are yet to receive any VAT payment from the National Assembly in respect to the transaction. What we received was Withholding Tax, that any contract for supply should include VAT and Withholding Tax, but we received that of Withholding Tax and are yet to receive VAT," he said.

National Assembly Clerk Nasir Arab, in his testimony last week, had said that VAT, which was five per cent of the transaction, was built into the cost of the vehicles.

The Acting General Manager, Commercial Division of PAN, Umar Kaita who also appeared last week agreed with Arab.

"The total figure paid was N2, 359,486,500 less five per cent that was deducted as tax (withholding tax). The offer was inclusive of the VAT," he told the committee.

[hispy99]

Professionals charge CBN, NSE on financial meltdown
From Abosede Musari, Abuja

THE Nigerian Institute of Management (NIM) has called on the Central Bank of Nigeria (CBN), the Nigerian Stock Exchange and the Securities and Exchange Commission (SEC) to intervene in the meltdown in the value of investments on the Stock Exchange being experienced by shareholders in order to prevent a system failure, which may prove too expensive to correct in the future.

President of the Institution, Sir Peter Oseghale Edeoghon, made this call at a press conference in Abuja recently.

He explained that there are likelihoods that the problem would affect Nigeria eventually since our banks operate across borders and even as far as London and New York, where they have branches and as well, maintain relationships with foreign banks.

"What affects the banks in the advanced economies must be applicable to the foreign branches or affiliates of our big banks and by implication, our local environment", he said.

He added that currently, international portfolio investors in Nigerian banks and the capital market are pulling out substantial portion of their funds from Nigeria, thereby daily-depleting shareholders' funds. This, he said, poses threats to the strength of the banks, which went through the recapitalisation and consolidation process few years ago.

"Owing to the withdrawal of funds from the banks by foreign portfolio investors, Nigerian banks are no longer taking risks in lending, thus further threatening their end of year profit base line", he said, adding that the resulting lack of credit will starve the industrial sector, thereby creating unemployment which is a consequence of the reduction in production capacity or outright shutdown of those industries.

The NIM president cited other instances such as the inability of borrowers to repay loans and the reduction of market capitalisation from N12 trillion to N9 trillion as pointers to the fact that Nigeria may eventually be affected by the global problem.

"The CBN, NSE and SEC must intervene soon enough to prevent a system failure that might prove too expensive to correct", he urged.

Edeoghon, who used the occasion of the press conference to announce the upcoming international conference of the Institute which will come up in Abuja between November 16th and 18th, said the current drop in price of crude oil also contributes to aggravating Nigeria's economic situation.

He then advised the managers of the economy to device means of exerting strict fiscal measures to ameliorate the consequential drop in the oil revenue by radically redirecting efforts towards the non-oil sectors.

[hispy99]

Originally Posted by olusolakemmy

well trust KOD
hispy i know u have got a long term horizon hence am not sure u will be interested in the january harvest season

if na sure banker harvest, why i go say no?

[hispy99]

Market rebounds as stockbrokers seek review of margin funds
Thursday, 13 November 2008 00:20 ABDUL IMOYO

The stock market seemed to have successfully crossed to the bulls territory going by latest trend. At the close of trading Tuesday, market capitalization had moved from a low of N7.4 trillion as at last week Wednesday to close at N7.8 trillion while the Nigerian Stock Exchange (NSE) All Share Index moved from 33,754.11 to 35,738.02. In addition, we have continued to see excellent performance by quoted companies and the market seemed to be reacting to the results. Analysts observed that it might be a good idea to buy stocks at this time but caution should be taken at the type of stocks to buy and long term should be a good objective.

However, the market turnaround happened simultaneously with the stockbrokers request to the Central Bank of Nigeria (CBN) to allow banks restructure all margin loans to them and other investors into a five-year discountable instruments in order to increase liquidity in the stock market. Although the banks had initially agreed to spread the existing loans between 6months to one year in addition to the existing terms of loans already given.

The president of Chartered Institute of Stockbrokers (CIS), Oladipo Williams, explained to journalists in Lagos that the restructuring of the loans will allow banks a reasonable time to adjust their position and resolve the illiquidity problem in the stock market.

He explained if banks are allowed restructure those credits into five years, they will no longer be under pressure and will not put debtors under pressure to flood the market with shares to sell and repay those loans within one year.
The brokers also recommended that the over-hang offers in the market should be swept into a temporary purchase account to be managed by the Central Securities Clearing System Limited (CSCS). The purchase, they said should be funded by some selected fund providers, mostly banks.

Ironically, it is not certain how long the current bullish trend would last in view of the fact that stocks generally go down at this time of the year when investors are wont to sell their shares for yuletide spending.

Analysts observed that in view of the level of undervaluation in the market, one may be inclined to believe that the appreciation in the share prices of some highly capitalized company that returned to the market last Thursday would be sustained this week. “In our view, there may be some profit taking activities on some stocks during the mid-week trading session. This may cause another round of panic sales in the market but the market should trend up” said analysts at FSDH. They advised investors in the market to maintain medium to long term view.

“In addition, we expect shrewd investors to take advantage of the current undervaluation for strategic position in some stocks that have good fundamentals and have prospect for growth in the medium and long term

[ayemco]

Originally Posted by Job

I think I will agree with you, because I place an other to buy First bank and GT Bank, but to my surprise my broker said they could not see them to buy, I was wandering why because I checked the cscs daily market position there was high volume of transaction everyday with these two companies. So it is possible they are doing Crossing. It means if what you want to buy is not among what they have they will tell you it is very scarce in the market.

This is absolutely crazy and dishonest on the part of the brokers. We cannot continue like this. Everytime I ask the brokers to sell good stocks they say no buyer. The I have to pull the rug from them and tell them not to sell beyond an amount. where the hell are honest brokers??? Crazy, just simply mad

[cashrules]

Originally Posted by ayemco

This is absolutely crazy and dishonest on the part of the brokers. We cannot continue like this. Everytime I ask the brokers to sell good stocks they say no buyer. The I have to pull the rug from them and tell them not to sell beyond an amount. where the hell are honest brokers??? Crazy, just simply mad

ABSOLUTELY SPOT ON!!! BUT I WOULD SAY i HAVE BEEN VRY LUCKY THIS TIME.. MAYBE ITS BECAUSE I THREATENED TO MOVE MY CUSTOM AWAY... ALL MY ORDERS HAVE BEEN DEALT WITH AT THE RIGHT TIME.... I THINK THEY ARE HONEST WHEN U ARE HARD ON THEM..

[despi_dynasty]

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