Items filtered by date: Wednesday, 23 October 2019

A quarterly survey report titled Inflation Attitudes Survey Report for Q3 2019 released by the Central Bank of Nigeria (CBN) has shown that Nigerians would rather have a lower interest rates than lower inflation.

The Survey report which was released on Tuesday, measured Households’ perception/expectations of price changes in the past one year/next one year, Households’ perception/expectations of interest rate changes in the past one year/next one year, Households’ opinions on the impact of interest rate changes in households and on the Nigerian economy, Households’ perception of the impact of interest rate changes on prices in the short and medium-term, and Households’ assessment of CBN’s role in controlling inflation.

The survey was conducted in 2,070 households that were randomly selected across Nigeria, with a response rate of 98.3%.

Inflation

When respondents were asked what would happen to the Nigerian economy if prices started to rise faster than they are now, 52.9% believed that economy will grow weaker, 6.4% said it will grow stronger, while 19.5% thinks there will be little difference. 21.2% did not respond.

This suggests that Nigerians prefer stability in prices. This supported the notion that inflation constrains economic growth.

On price changes over the next one, majority of the respondents think inflation will rise by 2.7%.

Interest Rates

The survey showed that 47.6% of the surveyed households knew nothing about interest rates.

Out of the remaining 52.4%, 28.2% believed interest had risen in the last 12 months.

On expected change on interest rates for bank loans and savings, 21.4% think rates will rise, while 14.7% believed that rates will fall. However, 63.9% of the respondents were indifferent or had no idea.

On whether if it would be best for the economy if interest rates fall or rise, 37.9% indicated that a fall in interest rates will favour the economy. 6.5% opted for a rise in rates, 14.6% were indifferent. However, a large percentage (40.6%) had no idea.

This indicates that while some Nigerians would prefer a fall in interest rate, the majority have no idea on interest rates.

Interest rates vs inflation

When asked whether they will prefer a high-interest rate or high inflation, 33.7% preferred a rise in prices (high inflation), 22.5% preferred higher interest rates, while 43.4% had no idea.

This suggests, when given a trade-off, Nigerians will prefer higher interest rates to higher inflation. This is also suggestive of support for bank’s price stability objective.

Published in News Economy

Going by its Q3 2019 unaudited consolidated financial statements for the 9 months period ended September 30, 2019, tier 1 bank group, FBN Holdings Plc has recorded a 2.99% drop in interest income.

Interest income recorded was N327.5 billion as against N337.6 billion in the same period of 2018.

The bank, however, recorded a 16.92% increase in profit before tax from N51.3 billion in 2018 to N60 billion in 2019.

Profit after tax stood at 51.8 billion in 2019, marking a 15.33% increase from N44.9 billion in Q3 2018.

The bank made N76.8 billion from fees and commissions; N5.6 billion trading forex; and N15.5 billion from insurance premium. These represent 22.58% and 25.90% increase in fees and commissions, and insurance premium from N62.7 billion and N12.4 billion in 2018 respectively.

Revenue from forex trading, however, dipped by 76.58% from N23.9 billion in 2018.

Earnings per share increased to N1.38 in 2019 from N1.22 in 2018.

FBN Holdings is currently trading at N5.30 on the floor of the Nigerian Stock Exchange (NSE). The stock is down by 33.75%.

Published in Bank & Finance
Wednesday, 23 October 2019 12:29

Tunisia swears in new president

Tunisia’s elected president Kais Saied takes the oath of office at the Assembly of People’s Representatives in Tunis, Tunisia. Photo via Reuters
 
Kais Saied, a political outsider and retired law professor, was sworn in as Tunisian president on Wednesday after he won a landslide victory in this month’s election.
 
Saied’s win delivered a heavy blow to a governing elite accused of failing to improve living standards or end corruption since the 2011 revolution that introduced democracy after years of authoritarian rule.
 
Even with a large mandate, the new president has less direct control of policy than the prime minister and both will quickly face a series of tough challenges including high unemployment rates and fighting corruption.
 
“There will be no tolerance in wasting any millime (cent) of the money of our people,” Saied said in a speech.
 
He vowed to protect freedoms, saying: “Those who have nostalgia to go back to the old years only pursue illusions and mirages,” he added.
 
Tunisia’s president controls foreign and defense policy, governing alongside a prime minister chosen by parliament who has authority over domestic affairs.
 
But Saied said he envisaged a bigger state role in the economy.
 
“We are moving from frustration to construction and work,” he added.
Published in World
Chief executive of Facebook Inc, Mark Zuckerberg will be grilled by lawmakers over the company’s plan to launch a digital currency and efforts to prevent foreign election interference when he appears before a Congressional panel on Wednesday.
 
Libra, Facebook’s digital currency project, has faltered in recent weeks amid sustained criticism from lawmakers and regulators over fears it may aid money laundering and upend the global financial system.
 
That political heat has led several of its key financial partners including Mastercard, Visa, PayPal and eBay to abandon the project.
 
Zuckerberg will try to reassure skeptical lawmakers on the House Financial Services Committee that the project will meet strict regulatory standards, poses no threat to sovereign currencies, and will steer well clear of the monetary policy arena, according to prepared testimony released Tuesday.
 
He is also likely to be quizzed on the company’s steps to combat misinformation and voter suppression ahead of the November 2020 U.S. presidential election.
 
The company disclosed on Monday it had removed a network of Russian accounts targeting U.S. voters on Instagram, which Facebook owns.
 
“If Mr. Zuckerberg wants to be king, he can be king of the social networks. But I don’t want him to have the additional arsenal of financial data on people,” Rep. Sylvia Garcia, a Democrat from Texas who sits on the committee told reporters on Tuesday.
 
She added: “We’re prepared for an interesting hearing tomorrow.”
 
Published in Telecoms
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