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BAC.N) and Citigroup Inc(C.N) expect weaker trading revenue in the fourth quarter, according to presentations they made at an investor conference in New York.
BofA said its sales and trading revenue was expected to fall from both the third quarter and a year earlier, slides shown at the conference and available on the bank's website showed.
No numbers for the quarter were provided in the BofA slides, which were prepared for presentation at the Goldman Sachs U.S. Financial Services Conference on Tuesday.
Citigroup's market revenue will fall about 5 percent, Chief Executive Mike Corbat said at the conference.
Fixed-income trading has been on a declining trend since 2009, largely due to new rules that discourage banks from taking unnecessary risks.
Several big banks have already scaled back their trading operations or quit the business altogether, and there are doubts about whether the industry will ever truly rebound.
Still, most big U.S. banks reported better-than-expected trading revenue in the third quarter when upbeat U.S. economic data, stimulus steps in Europe, and the shock exit of trading superstar Bill Gross from bond trading giant Pimco gave the market a shot in the arm.
Bank of America's shares were down 1.9 percent at $17.32 in late morning trading on the New York Stock Exchange. Citigroup's shares were down 2.4 percent at $54.99.
Some Stakeholders in the Micro Finance Sub-sector have called for the extension of duration of Rural Finance Institution Building (RUFIN) programme by two years.
They made the call in separate interviews with newsmen on the sidelines of the 9th supervision mission of the programme holding in Lagos.
They said the extension would enable the rural poor to benefit more from it.
RUFIN is being implemented in 12 states across the six geo-political zones of the country, with two states from each zone.
The states include: Lagos, Anambra, Edo, Bauchi, Zamfara, Oyo, Akwa Ibom, Adamawa and Katsina.
The programme enjoys financial assistance from the International Fund for Agricultural Development (IFAD), a UN agency.
It is being implemented over a seven-year period and specifically targets marginalised groups such as women, young people and those with physical disabilities.
The objective of the programme is to strengthen micro finance institutions and establish linkages between them and formal financial institutions.
It lays the foundation for the long-term development of a sustainable rural financial system that would eventually operate throughout the country.
By reaching out to the rural poor, the programme ensures that they gain access to financial services and can invest in improving productivity in agriculture and small businesses.
Mr Godbless Afor, the Executive Secretary of the Association of Non-Bank Micro Finance Institutions of Nigeria (AMFIN), said RUFIN had provided training and capacity building programmes, logistics and technical support to the association.
He said though RUFIN programme would be completed in 2016, there was need to extend it to consolidate structures it had put in place.
“RUFIN has done so well, but I think it is not time for RUFIN to go; if the impact is to be fully felt, two years should be added to the project duration.
“They will be able to handhold AMFIN and take it to a level that it would deliver improved quality to the Micro Finance sector,” Afor said.
Also speaking, Mr Matthew Olayinka, Coordinator, Marketing and Credit department, Bowen Micro Finance Bank (MFB), Ikorodu, said they were working with seven groups mentored by RUFIN.
He said RUFIN was doing a great job.I don’t want RUFIN to go because of the mutual benefit of the work they are doing.
The growing trend of Fashion Weeks across the African continent challenges the notion that global fashion starts in the northern hemisphere
The lights dim on the catwalk as a capacity crowd quiets in anticipation. A pounding drum rhythm builds suspense as, backstage, stylists swarm the waiting models, applying last-minute dabs of foundation, glittering lip-gloss and bursts of hair spray. Next to the catwalk, professional photographers jostle for space with fashion bloggers preparing to snap candids with raised iPhones.
The scene could come from any of Europe or America’s frenzied fashion shows, but for two key differences: the models are mostly black and the designers all African. Welcome to Fashion Week Africa in Johannesburg, an annual event that offers a sharp rebuttal to the idea that international fashion begins and ends in the northern hemisphere. “When it comes to fashion design, Africa is the next frontier,” says Precious Moloi-Motsepe, a women’s health doctor and wife of South African billionaire Patrice Motsepe who founded African Fashion International, which organizes the event, in 2007.
Now in its sixth year, Fashion Week Africa—which recently picked up Mercedes Benz’s sponsorship in a sign of its growing prominence (the company also sponsors fashion weeks in Australia, Russia and Mexico)—is a showcase for Africa’s top designers. Headlining designer David Tlale of South Africa makes regular appearances at New York’s fashion week, while Mozambican Taibo Bacar and South African Hendrik Vermeulen wowed audiences in Milan and Rome earlier this year.
The message from Johannesburg is clear: Africa is no longer just a source for ethnic inspiration and fashion shoots, but a fount of original talent that may just give the established global brands a fresh dose of creativity, Tlale tells TIME. “The industry needs fresh blood. Armani is tired. Galliano is trying to resuscitate himself. McQueen is gone. Gucci is failing to reinvigorate and Prada needs a new creative team. It’s time for the big fashion investors to start looking to Africa. Not appropriating our themes, but taking on our design talent.”
The first obstacle may be overcoming expectations. When Tlale, arguably Africa’s best-known designer, first showed in Paris in 2007, reviewers needled him about his line’s lack of leopard print. It still happens today. “There is so much more happening in Africa than animal prints,” he groans. “The time for showcasing the big five is over.” He is talking about the big five safari animals, but he could just as easily be referencing Africa’s big five fashion clichés: Mandela shirts, animal skins, vibrant Ghanaian fabrics, Ndebele beadwork and the red plaid and beaded collars of the Maasai.
Take the clothes on the catwalk in Johannesburg on Oct. 29 to Nov. 2: from diaphanous trench coats to daring hotpants, they have nary a whiff of the African stereotype. Tribal motifs made an appearance, but they were translated into muted knitwear that could almost pass as Nordic.
As much as international fashion design could use a jolt of African creativity, Africa, which has become dependent on imported fashion, needs the economic stimulus of domestic production. In South Africa, the clothing manufacturing sector used to be the country’s biggest employer, even more than mining, according to Anita Stanbury, of the South African Fashion Council. But in the early 2000s changes in the law allowed Chinese imports to take over, and the industry all but collapsed. South Africa’s fashion weeks, of which there are six year round, are one way to encourage interest, and investment, in local production. South African fashion retailers only buy 25% of their product locally, says Stanbury. If they bought 40%, the number of clothing manufacturing jobs in South Africa would nearly double, from 80,000 to 150,000. “That is a huge reason why we should support the domestic fashion scene,” says Stanbury. “It gives us the opportunity to pull people out of poverty, and make them consumers in the market.”
The domestic economic benefit is one of the main reasons Moloi-Motsepe started with fashion, but pride plays a part as well. She believes it’s time for African fashion to take its place in the spotlight. “We see ourselves as global fashion players,” says Moloi-Motsepe. Just as she pairs Prada with creations by local designers, she is waiting for the day she spots a Londoner mixing Stella McCartney with Tlale. Global fashion, she says, would be better for the cross-pollination.
BT Group Plc (BT/A) is in talks to buy Telefonica SA (TEF)’s O2 unit or another mobile-phone company to expand its wireless offering in the U.K. and complement its broadband network, the largest in the country.
EE, the wireless carrier co-owned by Orange SA (ORA) and Deutsche Telekom AG (DTE), is the other company in talks with BT, a person familiar with the matter said, asking not to be named because the negotiations are private. BT said it’s in preliminary talks for two companies and only identified O2 as a target. EE and O2 are each valued at more than $15 billion by Macquarie Group.
BT would probably offer a stake in itself to fund the deal, another person with knowledge of the matter said. Either company would give London-based BT the customer base and network of one of the top three U.K. wireless providers, strengthening BT’s position as companies in the market move toward selling bundles of TV, Internet and phone services.
A deal would make BT the largest phone carrier in the U.K. that can offer both wireless and fixed-line services without having to rent network capacity from someone else.
“You need infrastructure,” said Guy Peddy, an analyst at Macquarie in London. Buying access to other networks isn’t “sustainable in the long term.”
Photographer: Simon Dawson/Bloomberg
BT Group Plc Chief Executive Officer Gavin Patterson. BT is starting its own consumer...Read More
BT shares rose 3.7 percent to 394.20 pence at 2:20 p.m. in London. Telefonica added 1.3 percent to 12.64 euros in Madrid. Deutsche Telekom gained 1 percent to 13.29 euros in Frankfurt and Orange increased 1 percent to 13.84 euros in Paris.
Deal Price
The discussions are at a “highly preliminary stage and there can be no certainty that any transaction will occur,” BT said today. Representatives for Telefonica, Deutsche Telekom and EE declined to comment. An Orange representative couldn’t immediately be reached for comment.
EE’s shareholders have revived talks to sell the company, which may be valued at as much as $19 billion, people familiar with the matter said last month. Macquarie’s Peddy said the value of EE may be about 11 billion pounds ($17 billion).
O2 would be cheaper at about 10 billion pounds, Peddy said. Citigroup Inc. analyst Simon Weeden said the unit has an enterprise value of about 9.4 billion pounds.
BT spun off O2 in 2001 as the company tried to find a way to finance expansion and pay for spending to build out faster wireless services. Telefonica bought the unit for 17.7 billion pounds in 2005.
Telefonica Chief Operating Officer Jose Maria Alvarez-Pallete said at a conference in Barcelona last week that the company would stand by its mobile-only offer in the U.K. for now, until there’s more proof that subscribers want converged services. The company is the last of the major carriers not to have a bundled option.
Photographer: Simon Dawson/Bloomberg
BT Group Plc is in talks to buy Telefonica SA's O2 unit or another mobile-phone company...Read More
Orange Partnership
Orange Chief Executive Officer Stephane Richard said at the same conference that EE was looking for a strategic alliance with a cable or landline company to expand in the U.K. The company might look at partnerships that involve sharing infrastructure or a change in the capital structure of its EE business, he said.
BT is starting its own consumer mobile service next year in a partnership with EE in order to offer bundles of phone, Internet and TV service. The former U.K. phone monopoly is also providing broadband access to EE and Vodafone Group Plc so that they can offer their own packages.
BT said it will continue with the plan to roll out mobile service on EE’s network next year and has been looking at ways to accelerate the introduction, including an acquisition.
China’s stocks and bonds rallied, sending the 10-year yield down by the most since 2008, after the central bank unexpectedly cut interest rates. Interbank lending rates dropped and the yuan slid the most in two weeks.
The Shanghai Composite Index (SHCOMP) of shares advanced 1.9 percent and a gauge of Chinese equities in Hong Kong jumped 3.8 percent, the biggest gain in a year. The yield ongovernment bonds due September 2024 fell 17 basis points to 3.53 percent in Shanghai, which ChinaBond data indicate would be the largest drop in six years for a benchmark 10-year bond. The seven-day repurchase rate and the yuan declined by the most since September.
The People’s Bank of China lowered its one-year lending and deposit rates for the first time in more than two years, stepping up efforts to combat a slowdown in the world’s second-largest economy. Gross domestic product will expand in 2014 by the least in more than two decades, based on the median estimate in a Bloomberg survey, and the inflation rate held last month at the lowest level since January 2010.
“The rate cut has released a signal of looser monetary policies and that the government wants to stabilize growth,” said Wu Kan, a money manager at Shanghai-based Dragon Life Insurance Co., which oversees about $3.3 billion. “It’s quite positive for stocks, particularly those sectors sensitive to interest rates such as developers.”
Poly Real Estate Group Co. jumped by the 10 percent limit in Shanghai, while Country Garden Holdings Co. (2007) surged 11 percent in Hong Kong. Gree Electric Appliances Inc. climbed 3 percent in Shenzhen as household appliance makers gained on speculation lower rates will spurconsumer spending.
‘Prudent’ Policy
The central bank said the move in interest rates was “a neutral operation and doesn’t mean any change in monetary policy direction.” As China is still able to keep medium to high growth rates, it “has no need to take strong stimulus measures, and the direction of prudent monetary policy won’t change,” the central bank said in a statement.
The rate cut was a “surprise” that will boost investor sentiment and spur further gains for the stock market, said Hao Hong, managing director of China research at Bocom International Holdings Co. The yuan weakened 0.27 percent to 6.1417 per dollar in Shanghai.
The central bank lowered its one-year lending rate by 0.4 percentage point to 5.6 percent, and the one-year deposit rate by 0.25 percentage point to 2.75 percent. Only one of 20 economists surveyed by Bloomberg this month forecast the lending rate would be cut this quarter. The one-year prime lending rate, a weighted average of nine major lenders’ best loan rates, fell 0.2 percentage point today to 5.56 percent.
IPO Demand
The PBOC has primarily used open-market operations and targeted changes in lenders’ reserve requirements to adjust monetary policy in the past two years. It pumped 769.5 billion yuan ($126 billion) into the banking system in the last two months to spur lending and was said to have again added funds on Nov. 21 as new share sales led to a spike in cash demand.
A rate for overnight loans on the Shanghai Stock Exchange soared to 12.75 percent, from 3.09 percent on Nov. 21, as Shenyin Wanguo Securities Co. estimated initial public offerings due this week will lock up 1.6 trillion yuan.
The seven-day repurchase rate in the interbank market, a gauge of funding availability, fell 15 basis points to 3.51 percent after climbing 53 basis points last week, according to a weighted average compiled by the National Interbank Funding Center. A one-year interest-rate swap based on the seven-day repo fell 23 basis points to 2.89 percent.
Slowing Growth
“The market is clearly pressing for more rate cuts from what we see in the swap move,” said Eugene Leow, a fixed-income strategist in Singapore at DBS Group Holdings Ltd. “I see no clear signs of the economy bottoming out yet. There isn’t sufficient demand if you look at consumer and producer prices.”
GDP will increase 7.4 percent in 2014, the slowest growth since 1990, according to the median estimate of economists surveyed by Bloomberg. Consumer prices rose 1.6 percent from a year earlier in each of the last two months, while producer prices fell in October by the most since March, official data show.
ING Groep NV lowered its year-end forecast for China’s 10-year bond yield to 3.3 percent from 3.5 percent, according to a report today by Tim Condon, Singapore-based head of research in Asia. The bank is also predicting 100 basis points of reductions in the nation’s reserve-requirement ratios in the next two quarters, having previously forecast no change.
“The rate cuts show China sees the need to increase stimulus as it’s concerned that an economic slowdown could deteriorate this quarter,” said Daniel Chan, an analyst at Brilliant & Bright Investment Consultancy Ltd. in Hong Kong. “The yuan is likely to stay weak for now.”
To understand just how contentious next week’s OPEC meeting will be, take a look at the confusion it’s created among professionals paid to predict the outcome.
The 20 analysts surveyed this week by Bloomberg are perfectly divided, with half forecasting the Organization of Petroleum Exporting Countries will cut supply on Nov. 27 in Vienna to stem a plunge in prices while the other half expect no change. In the seven years since the surveys began, it’s the first time participants were evenly split. The only episode that created a similar debate was the OPEC meeting in late 2007, when crude was soaring to a record.
The split now reflects the difficult choice OPEC nations have to make. They could cut output to revive crude prices from a four-year low, at the risk of losing more market share to rival suppliers, including U.S. shale drillers. Or they could do nothing and allow prices to fall low enough to deter growth in U.S. output, a move that would also squeeze the finances of poorer members like Venezuela and Nigeria. With half the analysts in the market headed for a surprise, prices will be volatile after the meeting, according to BNP Paribas SA.
“It’s going to be a critical day,” Doug King, chief investment officer of the $200 million Merchant Commodity Fund, said by phone from London Nov. 14. “If there’s no action from the meeting, one of the most important OPEC meetings in the last 10 to 15 years, then the market will test them on the downside. If they cut 1.5 million barrels a day, you could get the Brent market back up into the $80 to $90 range.”
Output Decision
Oil collapsed into a bear market last month as U.S. drillers pumped at the fastest pace in more than three decades and global demand growth slowed. OPEC, responsible for about 40 percent of global oil output, needs to reduce production by 1 million to 1.5 million barrels a day to better balance supply and demand, Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas, said by e-mail from London on Nov. 11.
The group faced the opposite situation when analysts were at odds about OPEC’s intentions seven years ago. Brent futures had climbed about 55 percent in the 11 months up to the December 2007 meeting, putting pressure on the group to increase its production target. At the same time, the U.S. economy was on the verge of its worst recession since the 1930s, following a collapse in the housing market.
Before the meeting on Dec. 5, 2007, 23 of 42 people surveyed by Bloomberg predicted OPEC would maintain its production target, while the others forecast an increase of between 500,000 and 750,000 barrels a day. On the day that the group decided to maintain output, Brent crude futures slumped as much as 1.9 percent, before settling 1.2 percent higher.
Trashed Market
“If OPEC does nothing, I think we’re seeing this market get really trashed, another $10 from where it is,” Hakan Kocayusufpasaoglu, chief investment officer at Archbridge Capital AG, a Zug, Switzerland-based hedge fund, said by phone Nov. 14. Brent futures for January settlement rose $1.03 to close at $80.36 a barrel yesterday on the ICE Futures Europe exchange in London. The front-month contract posted its first weekly gain since September.
The group’s decision is made more difficult by the size of the supply cut needed to offset growth in production outside OPEC, Kocayusufpasaoglu said. “They’re going to have to cut 2 million barrels a day over time,” he said. “That’s a lot of money to leave on the table.”
U.S. crude production will surge 800,000 barrels a day to a 43-year high of 9.4 million in 2015, adding to 1.1 million barrels a day of growth projected for this year, the Energy Information Administration said on Nov. 12.
Bakken Formation
Back in 2007, production of oil from shale rock formations that’s driving the current boom had barely started. North Dakota’s Bakken formation, one of the biggest shale oil producers in the U.S., pumped just 33,000 barrels a day in December 2007, barely 3 percent of the 1.12 million barrels a day it produced in September, data from the North Dakota Industrial Commission shows.
There’s only a “remote possibility” OPEC will agree to a cut in Vienna, Seth Kleinman, Citigroup Inc.’s head of European energy research, said in a report on Nov. 10. Members including Algeria, Nigeria and Venezuela are unwilling to reduce their own production while Saudi Arabia, the group’s biggest producer, will refuse to do so alone, he said.
Saudi Arabia plans to let U.S. shale producers be the first to cut in the face of slumping prices,Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc., said in an interview with Bloomberg Television on Nov. 13.
Below $80
“With prices below $80, and the recent signal that the Kingdom is doing what it can with other producers to ensure stability, the market should not rule out an OPEC cut entirely,” Amrita Sen, chief analyst at London-based consultants Energy Aspects Ltd., said in a report on Nov. 17. “But predicting the timing of the cut is more challenging.”
Saudi Arabia is committed to seeking a “stable” oil price and speculation of a battle between crude producers “has no basis in reality” Oil Minister Ali Al-Naimi said at a conference in Acapulco,Mexico, on Nov. 12.
Even the group’s richest members would struggle to endure a year of $70 oil, which would be required to “dent” North American output, Tchilinguirian said.
Of the 10 analysts anticipating no formal change from OPEC on Nov. 27, three said it would pledge to bring output in line with the current target of 30 million barrels a day. The group would need to trim about 250,000 barrels from the 30.25 million a day it pumped in October, data from the organization shows.
Trimming Output
Ecuador and Venezuela will ask OPEC members in Vienna to trim production above this target, an official from Ecuador, who asked not to be identified in accordance with government policy, said on Nov. 18.
“Either OPEC disappoints the market by not cutting and prices fall, or OPEC makes a decisive cut that should allow prices to recover,” Tchilinguirian said. “The OPEC meeting will have binary outcome on oil prices. In other words, the price cannot stay where it is.”
For Related News and Information: Oil Price Plunge Tells Morgan Stanley OPEC Action Is More Likely Oil Diplomacy Takes New Twist as Venezuela Seeks Non-OPEC Help Hedge Funds Boosted Brent Oil Bull Bets Just Before Slump to $80 Saudi Arabia Leads OPEC Crude Output Lower Before Meeting
The naira slumped to a record low and stocks retreated the most in the world before Nigeria’s central bank meeting to review interest rates in Africa’s biggest oil producer.
The currency fell 1.2 percent to 176 per dollar by 4:11 p.m. in Lagos, the commercial capital, a fourth day of declines. The Nigerian Stock Exchange All Share Index (NGSEINDX) lost 2.1 percent to 33,428.76 in the worst performance among 93 primary indexes tracked by Bloomberg.
The Nigerian selloff came as investors weighed potential outcomes of an Organization of Petroleum Exporting Countries meeting next week, with Morgan Stanley saying a production cut looks increasingly likely. Nigeria is an OPEC member and crude oil exports account for about 70 percent of government revenue.
Foreign reserves dropped 2 percent this month as the Central Bank of Nigeria sold dollars to lenders to stem the naira’s slide. The regulator may increase its key rate from 12 percent next week to support the currency, according to ETM Analytics.
“Expectations are rising that the bank will throw in the towel and hike policy rates given the seeming futility of trying to keep the naira from depreciating,” Gareth Brickman, a Johannesburg-based Africaanalyst at ETM, said in a note to clients.
Macro Picture
The bank will give its decision on Nov. 25. Policy makers have left the benchmark rate unchanged since October 2011. Inflation slowed to 8.1 percent in October from 8.3 percent the previous month.
“I don’t think anything they can do at this point would significantly affect the naira,” Seun Olanipekun, an analyst in Lagos at Investment One Financial Services Ltd., said by phone. “Everything hinges onoil prices.”
The NSE all-share gauge dropped 5.5 percent this week, the worst African performer among global indexes tracked by Bloomberg. That almost erases last week’s 6.5 percent gain.
“People have been taking profits based on their gains last week,” Ayodeji Ebo, head of research at Afrinvest West Africa Ltd. in Lagos, said by phone. “What’s responsible is the weak macro picture.”
Iran will protect its share of global crude sales under all circumstances, Oil Minister Bijan Namdar Zanganeh said, as OPEC members prepare to meet next week to review production levels.
The Persian Gulf nation can double oil exports in two months if sanctions against are removed, Zanganeh said, according to the ministry’s news website Shana.
The Organization of Petroleum Exporting Countries will gather on Nov. 27 in Vienna to assess its collective output amid a supply glut and a 30 percent drop in prices this year. Iran’s crude output has languished under international economic sanctions that deter foreign energy investors and limit its exports to approximately 1 million barrels a day.
“Under no circumstance will Iran decrease its share of the global market, not even by one barrel,” Shana cited him as saying.
OPEC producers are stepping up diplomatic visits before their meeting, discussing how to react to the plunge in oil prices to a four-year low. Saudi Arabia, the group’s biggest member, remains committed to seeking stable prices, Saudi Oil Minister Ali Al-Naimi said Nov. 12 in Mexico. Rafael Ramirez, Venezuela’s OPEC representative, visited Algeria, Qatar, Iran and Russia. Zanganeh traveled to the United Arab Emirates, Qatar and Kuwait.
OPEC members Libya, Venezuela and Ecuador have called for action to prevent crude from tumbling further. Brent crude futures added 25 cents to $79.58 a barrel on the ICE Futures Europe exchange in London at 12:42 p.m. Singapore time.
Lost Sales
Iran, which produced more than 4 million barrels a day in 2008, lost market share to other producers amid sanctions imposed to curb its nuclear program. It pumped 2.77 million barrels a day in October, according to data compiled by Bloomberg. The nation could boost output by 700,000 barrels a day within two months of the removal of sanctions, Zanganeh told reporters at the last OPEC meeting in Vienna in June.
“I don’t expect to see much more Iranian oil returning to the market in 2015,” Richard Mallinson, a London-based analyst at Energy Aspects Ltd., said by e-mail yesterday. “Iran faces technical challenges increasing output and needs foreign investment and expertise.”
The U.S. and allied countries are concerned that Iran may be seeking to develop technology to build nuclear weapons, an accusation Iran denies. The sanctions, which target Iran’s energy and financial services industries, include a European Union ban on imports of Iranian crude.
The Islamic republic and six world powers are negotiating to reach an agreement that would limitIran’s nuclear program in return for an end to sanctions. The deadline for the talks is Nov. 24, three days before OPEC’s meeting.
Zanganeh said countries in the southern Persian Gulf “are eager to maintain their market share, and a loss of market share is problematic for them,” according to the official Islamic Republic News Agency. OPEC members in the southern Gulf include Saudi Arabia, Kuwait, Qatar and the U.A.E.
“Zanganeh noted that in Vienna he will talk to Saudi officials about this matter on Wednesday,” IRNA reported.
Britain abandoned a bid to overturn a European Union ban on banker bonuses of more than twice fixed pay after it suffered a setback in the EU’s top court.
Chancellor of the Exchequer George Osborne said he wouldn’t “spend taxpayers’ money” pursuing the legal challenge any further after Britain’s arguments were rebuffed by a senior official at the EU Court of Justice yesterday.
The U.K. government will instead redirect its efforts toward countering the effects of the “badly designed rules,” which include an increase in bankers’ overall pay, Osborne said in a statement. The U.K. Treasury said it may be necessary to “develop standards that ensure that non-bonus or fixed pay is put at risk,” echoing remarks this week by Bank of England Governor Mark Carney.
The European Banking Authority, which brings together financial watchdogs from throughout the 28-nation EU, said in October that role-based allowances violate EU rules in “most cases,” and urged regulators to ensure compliance.
Osborne and Carney have criticized the EU bonus curb as counterproductive. Britain started the legal fight against the measure last year.
EU legislation limiting the ratio of bonuses compared with basic salary is valid because it doesn’t amount to a cap on total pay, Advocate General Niilo Jaeaeskinen of the EU Court of Justice said in his non-binding opinion. The Luxembourg-based court follows such advice in a majority of cases.
‘Here to Stay’
“It looks like the bonus cap is here to stay and that could lead to further regulation if basic, non-performance-related salaries rise as a result,” said Paul Randall, head of incentives at law firm Ashurst LLP in London, after yesterday’s court announcement.
The U.K. argued in the court case that the EU rules exceed the bloc’s powers, are “disproportionate” and give too much responsibility to the EBA to flesh out how the measures should be applied.
The court’s advocate general said that “fixing the ratio of variable remuneration to basic salaries does not equate to a cap on bankers bonuses, or fixing the level of pay, because there is no limit imposed on the basic salaries that the bonuses are pegged against.”
Fixed Pay
Osborne wrote to Carney yesterday saying he was “concerned by recent developments that appear to be driving up fixed compensation in the banking industry.”
“I think this issue requires serious examination,” Osborne wrote.
European Parliament lawmakers campaigned for the bonus limit in a bid to rein in the gambling culture blamed for helping trigger the 2008 financial crisis. It was included in an overhaul of banking standards adopted by the EU in 2013.
Carney indicated this week that the EU rules had shifted the battle against excessive banker pay from curbing bonuses toward taming fixed salaries.
Salaries for senior bankers rose an average of 26 percent in 2012 as banks prepared for bonus caps, the EBA said in a June report, which surveyed 137 banks across the EU. This signals a “material shift from variable to fixed remuneration,” it said.
Losing Streak
The bonus-rule challenge was one of a series of court battles the U.K. has embarked upon against EU financial rules, and it is on a losing streak.
Britain has failed to overturn EU powers to ban short selling, and was told in April that an early challenge against a financial-transaction tax plan was premature. The U.K. is also contesting European Central Bank policies on clearinghouses that it says discriminate against countries outside the euro area.
“The Chancellor revealed his true priorities when he decided a year ago to spend taxpayers’ money fighting a bank bonus cap while working families face a cost-of-living crisis,” Ed Balls, Treasury spokesman for the U.K. opposition Labour Party, said in a statement.
“He should tell taxpayers how much money he has now wasted on this challenge, which we warned him against.”
Nigerian Electricity Regulatory Commission (NERC) may review upward the electricity tariff with effect from December 1, 2014.
The sudden development may be the result of the gas price increase to $3.30 as against the regulatory authorities’ assumption of $2.30.
Vice Chairman of NERC, Muhammad Lawal Bello, while speaking during a presentation in Abuja, Thursday at the review of basic assumptions for semi-annual review of Multi Year Tariff Order (MYTO2) revealed a $1.00 difference from the assumption and the actual price of gas.
He noted that though tariff review is a very sensitive issue to the consumers, the way to go is to pay what is due to ensure improvement in the sector.
“From what I have seen in the initial report, not much has changed. The tariff review is a sensitive issue to the consumer who considers paying higher and not seeing improvement in electricity supply as inappropriate. But there is a general consensus that the way to go is paying what is due so that power will begin to improve,” he said.
Based on the changes in some assumption parameters, such as inflation rate, exchange rate, gas price and generation capacity, there may be an upward adjustment to the tariff.
NERC has also declared that the sector is challenged with what will be the direction of such variables as inflation, foreign exchange rate in 2015, and whether generation companies and their gas suppliers guarantee increased generation under the new gas price.
Also speaking, Mr. Roland Achor, Tariff and Rates, NERC, noted that the actual price at the moment is $3.30 as against the assumption of $2.30 by NERC in the MYTO methodology assumptions, adding that gas price has been regulated since the adoption of the MYTO in 2008 and the regulated prices are applied in the 2012-2016 price regime.
According him, the regulated gas price for 2014 is $1.80/mmbtu. However, the Ministry of Petroleum and NERC have agreed to a gas price of $2.50/mmbtu and transportation cost of $.80 effective December 2014.
Also, there is the gas price assumption of $2.30 by NERC, which actual price has risen to $3.30 resulting in a difference of $1.00, which is expected to impact on the final aggregate technical commercial and collection losses (ATCC & C) review which takes effect December 1, 2014.
MYTO methodology is done based general assumptions to Disco retail tariff such as inputs to the tariff, forecast of load, capacity, fuel costs, investment, levels of losses, customer numbers, and M costs and other economic and technical data, which are all correlated to arrive at the retail tariff to the consumers.
He said the inflation rate received from the Central Bank of Nigeria (CBN) shows a figure of 8.3 per cent as at September 30, 2014 but the inflation rate at the last minor review was 7.8 per cent even though MYTO 2 has an assumption of 13 per cent inflation rate, stressing that the effective inflation rate is now pegged at 8.3 per cent.
He explained that effective exchange rate is now N156.29 to $1.00 over the next six months, adding that the retail tariff will be based on generation of 3,675MW throughout the period from December 1, 2014 to May 31, 2015, though the gross capacity was estimated to be 5,556MW.
The Nigerian Statistical Association (NSA), has called on the Federal Government to review existing laws relating to crude oil sales data collation process and those relating to transactions in the Free Trade Zones.
The association said this will enable the country get reliable statistical data on all trade transactions on export commodities for effective planning and economic development.
Making the call recently in a lecture delivered to mark the African Statistics Day in Abuja, President of the NSA, Dr. Muhammed Tumala, said current laws were inhibiting open data production and denying the country the opportunity of knowing the actual volume and values of transactions on key sectors of the economy.
Tumala, who spoke on the topic, “Open Data for Accountability and Inclusiveness: Prospects and Challenges for Nigeria”, noted that even though the Statistics Act 2007 established the Nigerian Statistical System with coordination by the National Bureau of Statistics (NBS), translating the provisions of the Act to national economic advantage remains a challenge as other systems and processes for open data are still lacking.
For instance, he explained that while demographic data is still being produced and managed outside the coordination of NBS, data production also remained too scanty in terms of functional and sectional coverage thereby making it difficult for planners and data users to have access to a comprehensive data on most sectors of the economy.
On the need to review the FTZs and other export trade laws, particularly those relating to crude oil lifting, the NSA President noted that exclusion of the Nigeria Customs Service (NCS) from assessing the oil lifting transactions and those of entities operating in the FTZs continued to raise questions about the validity of statistical figures on such trade being bandied by the government.
He said: “The importance of data in policy making cannot be overemphasised and all open data says is that such data should now be available to everyone that would either want to undertake research or carry out business decisions or design policies. That is what open data is saying.
“It is for citizens to insist on accountability and if they are to be accountable there is no other way of expressing accountability other than using data. It is for the media to also educate both the public on the need to use facts to hold public officers responsible for their actions.
“Such laws and policies on the FTZs and those that inhibit effective statistical data collation on all facets of our national life should be reviewed and amended. For instance, the exclusion of oil trade from the responsibility and activity of the Nigeria customs is one of such laws. There is no country in the world that does that.
“By doing that, you are unable to capture your trade data in that sector and unfortunately for Nigeria, over 90 per cent of our external trade is based on that sector. You can imagine that when over 90 per cent of your trade data is questionable then your entire data is questionable,” the NSA President added.
For the first time in the four years that FORBES has been tracking Africa’s richest, Nigeria beats South Africa. At the top yet again cement tycoon Aliko Dangote of Nigeria is joined on the list of Africa’s 50 Richest by 12 other countrymen. In comparison South Africa claims 11 spots, down from 14 a year ago. Nigeria is showing its strength, having earned commendations for its efforts to snuff out Ebola in the country, which Dangote helped fund and despite a recent drop in oil prices. Three new billionaires that joined the list include Orji Uzor Kalu of Nigeria, Tony Elumelu of Nigeria and King Mohammed VI of Morocco. Three billionaires on last year’s list are no longer members of the 10-figure club: Vimal Shah of Kenya is off the list, replaced by his father Bhimji Depar Shah at a lower net worth. Abdulsamad Rabiu of Nigeria dropped below $1 billion due to ceased operations at his floating cement terminal in Nigeria. And South African mining mogul Desmond Sacco dropped to a net worth of $680 million, down from $1.4 billion last year, because of a sharp decline in the share price of his mining firm Assore Group. The net result: the number of billionaires on the list stayed steady with 2013 at 27.
Africa’s 50 richest are, as a whole, wealthier than a year ago. Their combined net worth of $110.7 billion is 6.7 per cent more than in November 2013. The minimum net worth needed to join this elite group rose to $510 million, up from $400 million a year ago.
Behind Aliko Dangote at number one with a fortune of $21.6 billion, comes South African luxury goods magnate Johann Rupert, number two for the second year in a row, worth an estimated $7.3 billion. His Compagnie Financiere Richemont has a stable of luxury brands including Cartier, Montblanc and fashion house Azzedine Alaia.
Six newcomers join the list of richest Africans, including the above mentioned new billionaires, as well as Ali Wakrim of Morocco and Ahmed Ezz of Egypt. Mohamed Bensalah of Morocco rejoins the list after dropping off in 2013. Seven members of the 2013 list fell off: Vimal Shah of Kenya (as mentioned earlier, his father Bhimji replaced him), Cyril Ramaphosa of South Africa, Raymond Ackerman of South Africa, Sani Bello of Nigeria, Adrian Gore of South Africa, Shafik Gabr of Egypt, and Alami Lazraq of Morocco.
Extract: http://sunnewsonline.com/new/?p=91951
Prices in Scottish branches of John
Lewis and Waitrose may be higher than in the rest of the UK if the country votes
"Yes" to independence.
The chairman of the John Lewis said it was "most probable" that prices will
rise, with costs passed on to customers. Sir Charlie Mayfield said there were "economic consequences to a 'Yes'". On Thursday, the partnership, which includes Waitrose, posted a 12% jump in
pre-tax profits. Sir Charlie said: "It does cost more money to trade in parts of Scotland, and
therefore those higher costs in the event of a 'Yes' vote are more likely to
passed on ... "When we are talking about two separate countries it is most probable that
retailers will start pricing differently." In response to the comments, the Scottish finance secretary John Swinney
said: "Charlie Mayfield is entitled to his opinion. "I think the argument is one that is firmly contested by other retailers who
do not take the view that has been expressed this morning by Charlie Mayfield."
'Challenging' While overall profits at the partnership were up 12% at £129.8m, operating
profits at Waitrose fell 9.4% due to new store openings. Waitrose opened 15 more branches in the UK, 11 more than in the same period
last year. Sales at Waitrose rose 1.3% and 8.2% at John Lewis. John Lewis' click and collect service increased in popularity, up 25.6%, and
now accounting for 30% of all merchandise sold. The partnership said outlook for food was "challenging" but other parts of
the business were "more positive than has been the case for several years".
Asda too Asda has also warned that a "Yes" vote could have an impact on their prices.
Andy Clarke, president and chief executive of Asda said: "If we were no
longer to operate in one state with one market and - broadly - one set of rules,
our business model would inevitably become more complex. We would have to
reflect our cost to operate here. "This is not an argument for or against independence, it is simply an honest
recognition of the costs that change could bring."
