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Another warning sign for oil-dependent Nigeria
US President Joe Biden is prioritising a national electric vehicle (EV) charging network under his $2 trillion infrastructure bill, promising to have at least 500,000 of the devices installed across the US by 2030, a move that could further threaten oil.
The United States is rolling out a $174 billion plan to spur the development and adoption of electric vehicles that include money to retool factories and boost domestic supply of materials, tax incentives for EV buyers, and grant and incentive programmes for charging infrastructure.
However, to enable full-scale adoption of EVs, more would have to be done. The US does not have enough EV drivers to make it a viable business yet, and building a network of chargers is complex and but the government is setting the place for private sector participation.
The increasing adoption of electric vehicles is proof of how quickly the world is moving away from oil. Though oil prices have seen some recovery following the coronavirus pandemic, the future is still uncertain. Investors and fund managers are prioritising cleaner energy investments, and concerns about climate change is driving opposition to more investments into fossil fuels.
Oil producing countries like Nigeria can leverage gas to develop their companies as the warning signs shows the world is moving away from oil.
An encouragement for institutional play in Bitcoin
The recent pullback in Bitcoin’s volatility is setting the stage for a trend that could encourage institutions to dive in, according to JPMorgan Chase & Co.
“These tentative signs of Bitcoin volatility normalization are encouraging,” strategists including Nikolaos Panigirtzoglou wrote in report emailed Thursday. “In our opinion, a potential normalization of Bitcoin volatility from here would likely help to reinvigorate the institutional interest going forward.”
Three-month realized volatility for the cryptocurrency has fallen to 86% after rising above 90% in February, they wrote. The six-month measure appears to be stabilizing at around 73%. As volatility subsides, a greater number of institutions could warm to the crypto space, the strategists said.
The coin’s volatility has kept institutions away, something that’s been a key consideration for risk management — the higher the volatility of an asset, the higher the risk capital consumed by it, according to the strategists. None of the biggest U.S. banks right now provide direct access to Bitcoin and its counterparts.
Still, traditional Wall Street firms have been taking a greater interest in the coin, especially after it doubled this year on the heels of a 300% jump in 2020.
Goldman Sachs Group Inc. said this week it’s close to offering investment vehicles for Bitcoin and other digital assets to private wealth clients. Morgan Stanley plans to give rich clients access to three funds that will enable ownership of crypto and Bank of New York Mellon Corp. is developing a platform for traditional and digital assets.
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J&J Covid-19 Vaccine Approved in South Africa for Wider Use
Johnson and Johnson’s coronavirus vaccine has been approved by South African regulators for general use days after President Cyril Ramaphosa said the country will get more than 30 million doses.
The South African Health Products Regulatory Authority has backed the single-shot candidate with conditions, according to a statement on Thursday. Those include satisfactory results of ongoing studies and periodic safety updates, SAHPRA said.
The U.S. drugmaker’s vaccine has so far only been used in the country to inoculate health workers, and its approval is a boost to a national roll out that’s been hit by a series of delays. The regulator last month approved the shot developed by Pfizer Inc. and BioNTech SE, though AstraZeneca Plc’s has been spurned due to concern over its limited efficacy against a variant identified in the country late last year.
J&J agreed earlier this week to supply as many as 400 million doses to the African Union through the end of next year. The vaccine is seen as beneficial for Africa as in addition to being a single dose it can also be distributed at regular fridge temperatures, as opposed to the super-cold requirements vaccines made by Pfizer and Moderna Inc.
The Nigerian government aims to get 70 million of the single-shot vaccines with an initial 30 million vaccines likely to arrive by July.
SEC approves appointment of CEOs for NSE subsidiaries
The Securities Exchange Commission (SEC) has approved the appointment of chief executive officers to head the Nigerian Stock Exchange (NSE) non-operating holding company and operating subsidiaries.
In January 2021, NSE had announced chief executives to head its operating and non-operating companies when the ongoing demutualisation exercise is completed, noting that the appointments were subject to the approval of SEC.
On March 10, the local bourse announced that it received final approvals for its demutualisation plan both from SEC and Corporate Affairs Commission (CAC).
Under the demutualisation plan, a new non-operating holding company—the Nigerian Exchange Group plc (NGX Group) has been created.
The group will have three operating subsidiaries namely Nigerian Exchange Limited (NGX), the operating exchange; NGX Regulation Limited (NGX REGCO), the independent regulatory company; and NGX Real Estate Limited (NGX RELCO), the real estate company.
NSE, in a statement on Thursday, said SEC has approved Oscar Onyema as group chief executive officer (GCEO) of NGX Group; Temi Popoola as CEO of NGX; while Tinuade Awe as CEO of NGX REGCO.
How the markets fared this week
The bears reigned in the equities market this week. The All Share Index was down 0.73% WoW to settle at 38,930.68pts, dragging the Year-to-Date return down to -3.33% (vs. -2.62% at the end of the previous week).
There was mixed performance across sectors with the NSEFBT10 (+2.02%) and NSEINS10 (+2.82%) witnessing upticks, while the NSEBNK10 (-1.56%), NSEIND (-2.09%) and NSEOILG5 (-0.30%) all closed in the red. LINKASSURE (+41.18%) emerged as the week’s top gainer, while DAARCOMM (-16.00%) was the biggest loser.
At this week’s T-bill PMA, investors’ participation remained robust evidenced by solid bid to cover ratios of 3.27x, 3.93x and 1.37x on the 91-Day, 182-Day and 364-Day instruments respectively. Meanwhile, in the secondary market, bullish sentiments dominated, pushing yields down to 3.74% (vs. 3.97% in the prior week).
In the foreign exchange space, the Naira strengthened by 17bps against the Dollar at the I&E window to close at N409.30/USD as against N410/USD the previous week.