MENU

Author

Gold eases off near 2-yr high, silver crosses $21/oz

4 July 2016 Comments (0) Asia, Business, Latest Updates from Reuters

BENGALURU (Reuters) – Gold eased off a near two-year high, while silver breached the $21 level for the first time since July 2014 in highly volatile trade on Monday, prompted by a burst of short-covering in China.

Spot gold rose about 1 percent at one point to touch a session best of $1,357.60 per ounce. This was close to the $1,358.20 level reached on June 24, the highest since March 2014, when global markets went into a tailspin in the wake of Britain’s vote to exit the European Union. Spot gold was up 0.3 percent at $1,346.60 an ounce as of 0418 GMT. U.S. gold was up 0.7 percent at $1,348.50. Silver soared 7 percent at one point to $21.107, the highest since July 2014, before retreating below $20.25 by 0415 GMT.

“There is a little bit of a two-way battle going on in silver with a number of players going short in China,” said an analyst with an international investment bank.

The Shanghai Exchange Futures went limit-up as onshore players have aggressively been covering their short positions in the last few days, especially on Monday, said the analyst.

“Once the onshore market went limit-up, the short-covering buying spilled over to the London market.”

Chinese commodities from nickel to cotton surged on Monday on hopes Beijing would unleash more stimulus to prop up a sluggish economy, brightening the outlook for raw material demand. MKS trader Sam Laughlin said in a note global uncertainty would likely continue to fuel the recent rally in precious metals, but warned that there could be sharp periods of volatility. “The metal (silver) continues to be buoyed by its unique position as both an industrial metal in risk-on conditions and a safe-haven asset in times of uncertainty,” Laughlin added. Spot gold is expected to break a resistance at $1,351 per ounce and rise more to the next resistance at $1,367, said Reuters technical analyst Wang Tao. Hedge funds and money managers raised their bullish positions in COMEX gold and silver contracts to record highs in the week to June 28. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.41 percent to 953.91 tonnes on Friday, the highest since July 2013. [GOL/ETF] The U.S. markets are closed on Monday for the Independence Day holiday.

 

(By Vijaykumar Vedala. Reporting by Vijaykumar Vedala in Bengaluru; Editing by Joseph Radford and Subhranshu Sahu)

Read more

Ivorian government to reduce export taxes for cocoa products

1 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – The Ivorian government has announced reduced export taxes for cocoa products in a bid to encourage production and processing in the West African country.

Taxes on exports of cocoa butter will fall to 11 percent from 14.6 percent and taxes on cocoa mass will drop to 13.2 percent from 14.6 percent, the government said.

The export tax on cocoa powder will fall to 9.6 percent from 14.6 percent.

Also, trading houses such as Cocoa Barry, Olam and Cargill will be able to increase their processing capacity by 7.5 percent. Smaller processors will be able to expand by 10-15 percent.

The changes are pending formal contracts to be signed between processors and the government.

 

 

 

 

(Reporting by Ange Aboa; writing by Edward McAllister; editing by Jason Neely)

Read more

Nigeria signs $80 bln of oil, gas infrastructure deals with China

1 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria has signed oil and gas infrastructure agreements worth $80 billion with Chinese companies, the West African country’s state oil company said on Thursday.

Nigeria, an OPEC member which was until recently Africa’s biggest oil producer, relies on crude sales for around 70 percent of national income, but its oil and gas infrastructure is in need of updating.

The country’s four refineries have never reached full production because of poor maintenance, causing it to rely on expensive imported fuel for 80 percent of energy needs.

These problems have been exacerbated by a series of attacks on oil and gas facilities by militants in the southern Niger Delta energy hub which pushed production down to 30-year lows in the last few weeks.

Oil minister Emmanuel Ibe Kachikwu, who also heads the Nigerian National Petroleum Corporation (NNPC), has been in China since Sunday for a roadshow aimed at raising investment.

“Memorandum of understandings (MoUs) worth over $80 billion to be spent on investments in oil and gas infrastructure, pipelines, refineries, power, facility refurbishments and upstream have been signed with Chinese companies,” said NNPC in a statement.

NNPC added the China roadshow was “the first of many investor roadshows intended for the raising of funds” to support the country’s oil and gas infrastructure development plans.

Earlier this week, NNPC said oil production had in the last few days risen by around 300,000 barrels per day (bpd) to 1.9 million bpd, due to repairs and no attacks having been carried out since June 16.

Goldman Sachs, in a report published on Wednesday, said a “normalization” in Nigerian oil production would put pressure on global oil prices and may mean prices will average less than $50 a barrel during the second half of 2016.

 

(Reporting by Alexis Akwagyiram; Editing by Mark Potter)

Read more

Egypt’s central bank says no ban on using debit cards abroad

30 June 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Debit cards linked to Egyptian pound bank accounts can be used outside the country in a “regular” way, the central bank said on Thursday, after instructions it sent to banks on Wednesday appeared to ban customers from using them abroad.

Although Wednesday’s letter suggested a blanket ban, the central bank said its instructions “only apply to individuals misusing debit cards to acquire large amounts of foreign currency without a clear reason for doing so, which saps banks’ foreign reserves”.

“The Central Bank of Egypt affirms the continued use of all cards, debit or credit, under existing limits set by each bank,” it said in a statement.

In the letter sent on Wednesday and seen by Reuters, the central bank had told bank chiefs: “Please ensure that debit cards, including pre-paid cards, issued in local currency by Egyptian banks are only used within the country.”

Central bank Governor Tarek Amer had initially denied the Wednesday directive existed, telling state news agency MENA on Thursday the rules on using debit cards abroad were unchanged.

“It is up to each bank to set limits on its clients’ usage of foreign currency abroad through debit cards linked to local currency accounts, but we need vigilance because some clients use debit cards to get large dollar amounts not intended for travel, tourism, or shopping,” he said.

The bank’s later statement acknowledged the instruction had been sent but said it applied only in some cases. Wednesday’s letter did not indicate that was the case, however.

Egypt depends on imports for everything from food to fuel but has suffered from a shortage of dollars in the banking system to pay for them since a 2011 uprising drove away tourists and foreign investors, crucial sources of hard currency.

Many import businesses now rely on the black market, where they can get hard currency for a higher price. The pound’s rate on the black market has weakened since the central bank devalued the Egyptian pound in March, at which time it was roughly in line with the official rate.

 

(By Ehab Farouk and Ahmed Aboulenein. Additional reporting by Mostafa Hashem; Writing by Ahmed Aboulenein; Editing by Catherine Evans)

Read more

Strategic Fuel Fund’s bid for Chevron South Africa assets faces probe

30 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s state-owned Strategic Fuel Fund (SFF) will face an investigation by its shareholder for making a bid to buy Chevron’s local assets without seeking clearance, a government official said on Thursday.

SFF, which manages crude oil reserves in Africa’s most industrialised country, said on Wednesday it had approached the oil major with an offer to buy its 75 percent stake in Chevron’s 110,000 barrels per day refinery and other downstream assets.

“An offer to purchase by an entity of the Department of Energy requires express consent from the Minister of Energy as the ultimate shareholder representative. This was neither sought nor obtained,” Director-General at the energy department Thabane Zulu said in a statement.

Zulu said his department will investigate SFF for its “complete disregard for governance processes”.

SFF officials were not immediately available to comment.

Chevron’s officials in South Africa did not immediately respond to request for comment.

Chevron, which has had a presence in South Africa for more than a century, said in January it would sell its business in the country, including its refinery in Cape Town, after making similar sales in Nigeria due to weak oil prices.

Besides the refinery, Chevron also has interests in a lubricants plant in Durban on the east coast. Its network of Caltex service stations makes it one of South Africa’s top five petroleum brands, according to its website.

 

(Reporting by Tiisetso Motsoeneng; Editing by James Macharia)

Read more

MTN Nigeria wins 2.6GHz spectrum auction

29 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Africa’s biggest mobile telecoms operator MTN’s Nigerian subsidiary has won a 10-year radio spectrum licence for mobile broadband services, it said on Wednesday.

The award comes after MTN said earlier this month that it would more than double its spending in Nigeria in the current fiscal year after agreeing to pay a heavily reduced fine of $1.7 billion for missing a deadline to deactivate more than 5 million unregistered SIM cards used on its Nigerian network.

The Nigerian Communications Commission (NCC) had earlier announced that MTN had emerged as the sole approved bidder for the new licence, MTN said in a statement.

“With the 2.6 GHz band, we expect to roll out and provide the full range of LTE (Long Term Evolution mobile broadband) services to Nigerians, empowering Nigeria with the latest mobile broadband technology,” said MTN Nigeria Chief Executive Ferdi Moolman.

“This licence acquisition further demonstrates MTN’s abiding faith in the future of Nigeria and the resilience of the Nigerian economy.”

MTN is the largest mobile phone operator in Nigeria with 57 million subscribers, and the country accounts for about a third of its revenues.

MTN’s plan will see the roll out 3G network population coverage from 67.23 percent to about 90 percent. The aggressive rollout of fibre to six Nigerian cities by the end of 2016 will enable the connections.

 

(Reporting by Nqobile Dludla; Editing by Greg Mahlich)

Read more

Kenya’s bourse scales back its derivatives ambitions

29 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s Nairobi Securities Exchange will launch trading of derivatives by the end of 2016, after a series of delays, but plans to start with fewer instruments than originally planned, its chief executive said.

The bourse, which is a key entry point for foreign funds looking for exposure to fast-growing East Africa economies, initially planned to roll out trading in the first half of last year with more products including currency futures.

“We are now at a very close point. Certainly this year we should be able to get the market up,” Geoffrey Odundo told Reuters in his office on Wednesday.

Trading would start with a futures contract on the NSE-25 share index, a tool used to hedge investment risk. Trading in single stock futures and currency futures, originally expected to start at the same time, would begin at a date still to be determined, he said.

Odundo attributed the delays in launch of trading to the slower-than-expected pace in setting up the infrastructure to trade derivatives and educate the market about its benefits.

Kenya will be the second in Sub-Saharan Africa to start trading of derivatives after South Africa, he said.

“Futures contracts are a bit sophisticated. It is not like spot trading. You really have to know what you are trading,” Odundo said.

 

DIVERSE ECONOMY

The NSE is also considering the possibility of offering agriculture contracts, once the derivatives market takes off, but those plans were at an embryonic stage, he said.

He said the recent commodity price drop had curbed equity trading volumes at the bourse this year, with daily volume averaging $3-4 million, half of the daily levels seen at the same time last year.

But Kenya’s diverse economy, which does not rely on a particular commodity, has helped the situation a little, he added.

“Our decline has not been as rapid as the other markets which have got commodity trades like Nigeria and Angola,” he said about volumes, without offering details.

Valuations of listed firms, as measured by price to earnings ratio, had however fallen, which together with a stable currency, could boost interest among foreigners.

“Most of them are at 8-10 (PE ratio) and historically they have been as high as 15. These are good entry points for them,” Odundo said.

On the other hand the bond market was booming, with monthly volumes more than doubling last month from the same period last year, and on course to more than triple in June, thanks to falling yields on government debt.

The yield on the benchmark 91-day Treasury bill has fallen by more than 300 basis points in recent weeks.

 

(By Duncan Miriri. Editing by Edmund Blair and Gareth Jones)

Read more

Ugandan shilling steady as commercial banks’ panic buying slows

29 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

KAMPALA (Reuters) – The Ugandan shilling was stable on Wednesday as a recent panic purchase of dollars by commercial banks subsided after a central bank intervention on the sell side earlier in the week and subdued demand among corporate clients.

At 1002 GMT commercial banks quoted the shilling at 3,400/3,410, little changed from Tuesday’s close of 3,405/3,415.

 

 

(Reporting by Elias Biryabarema; Editing by George Obulutsa)

Read more

South Africa’s slowing growth to be hit by Brexit: Reserve Bank governor

29 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – The governor of the South African Reserve Bank said on Tuesday that although the decision by Britain to exit the European Union would not cause a recession, already slowing economic growth would be hit.

Speaking to Bloomberg TV in Portugal Lesetja Kganyago said: “We would not venture into a recession at this stage, but there is no doubt that it will slow the South African economy from the weak growth that we already have.”

Finance Minister Pravin Gordhan said on Sunday financial market volatility caused by Britain’s decision to quit the EU, which sent the rand tumbling, could hurt investment flows into South Africa.

Britain voted last week in a referendum to leave the EU, wiping billions of dollars off world equity markets.

“It has affected sentiment and investors were looking for safe assets. We are not seen as one of the safe assets,” Kganyago said.

South Africa’s economy is barely growing, hobbled by power cuts last year, low commodity prices, drought and political ructions that have unnerved investors.

Africa’s most advanced economy contracted in the first quarter, putting it on track for its first recession in seven years.

 

(Reporting by Zandi Shabalala)

Read more

Tanzania sees economic growth picking up to 7.4% in 2017

28 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

DAR ES SALAAM (Reuters) – Tanzania’s central bank said on Tuesday it expects economic growth to accelerate to 7.4 percent in 2017 from an estimated 7.2 percent this year, driven by construction, communications and finance.

The Tanzanian economy, East Africa’s second-biggest, grew 7 percent last year.

“The macroeconomic objectives of the government aim at achieving a real gross domestic product growth of 7.3 percent in 2016/17 based on the projected growth of 7.2 percent in 2016 and 7.4 percent in 2017, while maintaining inflation at single digits,” the Bank of Tanzania said in its latest monetary policy statement.

“The bank will continue pursuing prudent monetary policy in 2016/17 to keep inflation close to the medium-term target of 5 percent, while ensuring that the liquidity level is consistent with demands of various economic activities.”

Tanzania’s year-on-year headline inflation rate edged up to 5.2 percent in May from 5.1 percent in April, as prices rose for non-food items.

The government said it plans to increase spending by 31 percent in its 2016/17 fiscal year to $13.51 billion to finance infrastructure and industrial projects.

 

(Reporting by Fumbuka Ng’wanakilala; Editing by George Obulutsa, Larry King)

Read more