CBN Issues Guidelines for Development Finance Institutions

The Central Bank of Nigeria on Thursday issued guidelines to regulate the operations of development finance institutions in the country.

The guidelines issued in Abuja, the CBN said, are to provide a level playing field for operators in the development finance subsector, to further direct private capital to participating financial institutions.

Also, the CBN said the guidelines would provide a framework for licensing, regulation and supervision of both wholesale and retail development finance institutions.

The wholesale institutions would require a minimum capital of N100billion payable over a maximum period of four years, out of which N20billion is paid prior to being granted the approval in principle, in addition to N250,000 non-refundable application fee and N1million licensing fee.

The capital for retail institutions has been put at N10billion, with a non-refundable application fee of N100,000 and licensing fee of N500,000.

Rather than compete directly with the retail institution at the retail market, the CBN said the whole institution shall mainly provide wholesale financial products (at least 80 percent of total credit) and facilitate technical assistance to eligible participating financial institutions nationwide.

The establishment of development finance institutions was to provide financial interventions in micro-, small and medium enterprises as the engine of growth, to complement the efforts of banks and other financial institutions.

Also, the institutions were to accelerate the pace of development of the country's economy and realization of the key roles of some critical sectors in the process.

However, due to limited access to long-term and low-interest funds, the development finance institutions had recorded limited success.

To bridge the gap and increase the availability and access to finance micro-, small and medium enterprises, the Federal Government in collaboration with development partners and international financial institutions established the wholesale development finance institutions.

The institutions are to help fund these enterprises for economic development; foster growth in sustainable businesses; create jobs, reduce poverty and improve quality of lives.

The institutions, like all financial institutions regulated by the CBN, would be subject to regulation and supervision by the CBN under the Banks and Other Financial Institutions Act, CAP B3, Laws of the Federation of Nigeria, 2010.

The guidelines, the CBN said, are designed to be consistent with CBN's existing regulations for all licensed financial institutions, to ensure that they operate in a safe and sound manner.

While the institutions are authorized to provide finance and credit facilities to eligible borrowers; refinance micro- small and medium enterprises and loans to large enterprises as well as invest in government securities, they are not permitted to accept or demand, savings and time deposits, or any type of deposits.

Also, they are barred from taking proprietary positions in real estate other than for its own business; management of pension funds/schemes; provide fund/asset management services; engage in foreign exchange, commodity and equity trading as well as finance capital market operations.

Extract: http://allafrica.com/stories/201503230079.html

Europe Stocks, U.S. Futures Drop After Rally; Oil Falls

European stocks and U.S. equity-index futures slipped after global equities capped their biggest weekly advance since July 2013. Crude declined, while the dollar gained versus European currencies after tumbling on Friday.

The Stoxx Europe 600 Index fell 0.6 percent by 8:21 a.m. in London, after nearing a record on Friday, while Standard & Poor’s 500 Index futures retreated 0.2 percent. The MSCI Asia Pacific Index extended a six-month high as China’s Shanghai Composite Index capped its longest streak of gains since 2007. The dollar strengthened at least 0.3 percent against the euro, pound and Norwegian krone. U.S. oil fell 2 percent as Saudi Arabia said it was pumping near record amounts of crude.

The value of global equities rose to a record $68.4 trillion on March 20 as investors bet shares will benefit from delayed Federal Reserve interest-rate increases and record central-bank stimulus in Europe and Japan. Three Fed members speak Monday after policy makers lowered their rate outlook, sending the dollar to its worst week since 2011. Greek Prime Minister Alexis Tsipras is set to meet German Chancellor Angela Merkel on Monday as he seeks to salvage a bailout deal.

“The overriding factor for the Fed is whether they can afford to overstimulate the economy or raise rates too soon,” Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “They can’t be too aggressive in raising rates as the underlying U.S. economy isn’t as strong. Equities will continue to trend higher but as valuations become stretched, markets will be more vulnerable to a pullback.”

Stock Moves

The MSCI All-Country World Index capped a 3.2 percent gain last week, its steepest advance since July 2013. The measure is up 7 percent over the past year as policy makers from Europe to Japan expand stimulus programs to stave off deflation and preserve growth. Their actions have helped temper the impact of the Fed’s unwinding of its own quantitative-easing program.

Both the Nasdaq Composite Index and the Stoxx 600 came within 0.5 percent of record highs last week. Fed officials said in their statement that they’ll be waiting for confidence in the recovery before boosting borrowing costs.

Seventeen of the 19 industry groups on the Stoxx 600 retreated today. The gauge rose to as high as 404.51 on Friday, close to the March 2000 all-time closing high of 405.5.

Christian Dior SE fell 3.2 percent and LVMH Moet Hennessy Vuitton SE tumbled 3 percent after JPMorgan Chase & Co. analysts cut the luxury-goods companies’ shares to neutral.

The Shanghai Composite Index advanced 2 percent from its highest close since 2008. The gauge is heading for a ninth straight gain even after China’s securities regulator urged investors to consider risks from the nation’s surging stock market.

Hang Seng

Hong Kong’s Hang Seng Index climbed 0.5 percent Monday and the Hang Seng China Enterprises Index was 0.2 percent higher, extending its winning run to eight days. Japan’s Topix rose 0.7 percent to the highest since November 2007.

The Nasdaq Composite advanced for a fifth straight day Friday, gaining 0.7 percent to 5,026.42. The rally put the technology-heavy index within seven points of wiping out all its losses since the Internet bubble and came in the same week as Apple Inc., the Nasdaq Composite’s biggest member, entered the the Dow Jones Industrial Average.

In currency markets, the euro was 0.4 percent weaker at $1.0776 after surging 1.5 percent Friday to cap its biggest weekly advance since 2011. The pound was 0.6 percent weaker and the krone slipped 0.6 percent to 8.0676 per dollar.

The Bloomberg dollar index added 0.2 percent after losing 1.3 percent Friday to cap a slump of 2.2 percent for the week, the biggest since October 2011. The gauge of the U.S. currency against 10 major peers was at a decade high as recently as March 13.

Bonds Hold

Yields on 10-year Treasury notes were little changed Monday after tumbling 18 basis points last week to 1.93 percent. The rate on similar German bunds was little changed at 0.17 percent after dropping to a record 0.168 percent on Friday.

Fed Vice Chairman Stanley Fischer speaks at the Economic Club of New York on Monday, while San Francisco Fed President John Williams will deliver a speech via videoconference to the Australian Business Economists. Cleveland Fed President Loretta Mester speaks on a panel discussion in Paris with Bank of France Governor Christian Noyer.

Oil Slide

European leaders, including Merkel, French President Francois Hollande and European Central Bank President Mario Draghi pressed Tsipras to make good on a February accord and “present a full list of specific reforms” in the coming days before any further aid can be disbursed.

West Texas Intermediate crude dropped to $45.61 a barrel after its first weekly increase in five weeks. Oil has been on the brink of both bull and bear markets this year as a declining rig count in the U.S. is countered by data showing the nation’s stockpiles are at a record high. Brent was down 1.6 percent at $54.43 a barrel.

Saudi Arabia’s Oil Minister Ali al-Naimi said at the weekend that the world’s biggest crude-exporting nation is pumping about 10 million barrels of oil a day, close to a record amount produced in 2013. Mohammed al-Madi, the Saudi governor to OPEC, said oil prices won’t return to $100 a barrel because higher prices would draw more shale and output from higher-cost producers to the market.

Extract: http://www.bloomberg.com/news/articles/2015-03-22/u-s-futures-climb-after-global-stock-surge-dollar-slips

ADB, IMF, World Bank To Cooperate With China-Led Asian Infrastructure Investment Bank, Leaders Say

The Asian Development Bank (ADB), International Monetary Fund (IMF) and World Bank all expressed support Sunday for the new kid on their block, a $50 billion multilateral lender led by China, which gave the financing operation most of the seed money upon its founding last year. Inside and outside the Asia-Pacific region, more than 30 countries are now members of the Asian Infrastructure Investment Bank (AIIB). Additional nations may join by a March 31 deadline, as BBC News reported.

The AIIB is designed to provide project loans to developing countries, with operations beginning by the end of this year.

ADB President Takehiko Nakao and China’s Finance Minister Lou Jiwei have conducted discussions about possible cooperation between the two regional lenders, they said at a China Development Forum 2015 session in Beijing, Reuters reported. At the same event, IMF Managing Director Christine Lagarde said her fund would be “delighted” to work with the AIIB, as there was “massive” room for cooperation on infrastructure financing in the Asia-Pacific region.

Meanwhile, one of the World Bank’s leaders said Sunday her institution also would be cooperating with the AIIB. “Any new initiative that will mobilize funding in order to fill infrastructure gap is certainly welcome. World Bank really welcomes the AIIB initiative,” Managing Director Sri Mulyani Indrawati told China’s official Xinhua News Agency in an exclusive interview. “We will definitely open for cooperation with AIIB.”

Most of the AIIB’s regional members joined last year, while most of the bank’s nonregional members joined this month. The former encompass India, Indonesia and Pakistan; the latter include France, Germany and the U.K. Conspicuous by their absences on its membership roll are Japan and the U.S. Neither country has expressed support for the venture, which some observers have attributed to their rivalries with China. Among national economies around the world, the U.S. ranks No. 1, China No. 2 and Japan No. 3.

China’s finance minister has previously indicated the AIIB’s approach would be not to compete but to complement existing international institutions such as the ADB, IMF and World Bank. The ADB is based in the Philippines capital of Manila, while the IMF and World Bank both are headquartered in the U.S. capital of Washington.

Eight more countries may join the AIIB by the March 31 deadline, Jin Liqun, secretary-general of the bank’s interim secretariat, said Sunday, according to Reuters. At the start of operations, it will have the approval of shareholders to double its capitalization to $100 billion, the news agency said.

Extract: http://www.ibtimes.com/adb-imf-world-bank-cooperate-china-led-asian-infrastructure-investment-bank-leaders-1855012

BofA, Citi expect lower trading revenue in fourth quarte

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.

Extract: http://www.reuters.com/article/2014/12/09/us-banks-trading-idUSKBN0JN1R320141209

Micro Finance: Stakeholders Want Building Programme Extended

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.

Extract: http://www.nigerianobservernews.com/2014/12/09/micro-finance-stakeholders-want-building-programme-extended/

Africa Fashion Week Showcases the Continent’s Best Talent

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.

Extract: https://time.com/3555824/africas-best-fashion-talent/

BT in Talks to Buy EE or O2 in U.K. to Add Mobile Service

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.

Extract:http://www.bloomberg.com/news/2014-11-24/bt-in-highly-preliminary-talks-to-buy-telefonica-s-u-k-unit.html