The Federal Government will soon float a Diaspora bond to tap into the resources of Nigerians living abroad as one of the measures to overcome recession, the Senior Special Assistant to the President on Diaspora and Foreign Affairs, Mrs. Abike Dabiri-Erewa, has said.
Dabiri-Erewa said this on Tuesday when she visited the Minister of Information and Culture, Alhaji Lai Mohammed, to seek for a working relationship with the ministry.
She said looking to the Diaspora to overcome recession was not without precedent as Ireland also sought remittances from its citizens abroad when it was hit by recession.
Dabiri-Erewa expressed confidence that with about $21bn being remitted to the country annually, Nigerians abroad were capable of pulling the country out of recession if they were adequately informed and engaged by the government.
She said the plan to float a Diaspora bond would enable Nigerians citizens living abroad to invest in infrastructure development and also to explore the opportunity of making profit on their investments.
While stressing the need for an accurate database of Nigerians abroad, she said a Diaspora policy would soon be put in place to define and facilitate the engagement with them and harness the intellects of Nigerians in various fields in the Diaspora to contribute positively to nation building.
Dabiri-Erewa said, “We are coming up with a programme called PRIDE, that is, the Presidential Initiative for Diaspora Excellence. We will bring it down to various fields; we are working on medicine and agriculture.
“So, we are getting Nigerians in the Diaspora in those fields who are going to come together and make sure they contribute positively to the progress and development of Nigeria.”
Responding, Mohammed said his ministry would soon launch an information portal to keep Nigerians at home and in the Diaspora abreast of the government’s programmes and policies, and also get their feedback.
He also disclosed that the ministry would also extend its town hall meetings to Nigerians living in some countries and cities with large Nigerian population.
Africa’s biggest mobile network, MTN Group, shrugged off its Nigeria’s woes yesterday and strengthened 5.34 per cent to close at R115.37 after the Central Bank of Nigeria (CBN) instructed the country’s banks to suspend any remittance of MTN dividends until further notice.
The Nigerian bourse stance comes as authorities accused the company of illegally repatriating $14 billion (R195 billion) from the country over 10 years.
MTN Nigeria said yesterday that it remained committed to the payment of the N330 billion (about R14 billion) fine related to the late disconnection of “improperly registered” SIM cards. The company has not declared a dividend since April and MTN Nigeria has no intention to make any dividend payments over the next six months.
The Nigerian unit continued to refute the allegation that it had improperly repatriated funds from Nigeria, with MTN Nigeria Chief Executive, Ferdi Moolman, saying: “The allegations made against MTN Nigeria are completely unfounded and without any merit.”
But in its quarterly figures for September, the company beat market expectations after it reported stronger data revenue and improved subscriber numbers yesterday. Analysts said the deepening woes in Nigeria had not harmed the company and its performance much.
The telecoms giant’s shares strengthened more than five percent to trade on the JSE yesterday as it also said it would fast-track the starting date of its new Chief Executive, Rob Schuter, who was expected to join the company in March.
MTN’s Group Executive Chairman, Phuthuma Nhleko, said the September results were testimony that MTN’s transformation project, which initially focused on its key markets Nigeria and South Africa, with hard targets set for the next 12, 18 and 24 months, would pay off.
“Operations are expected to deliver the first results on clearly defined targets in the first half of 2017,” Nhleko said.
Nhleko, according to the South African-based Independent Newspaper, also said despite a difficult environment due to weaker macro-economic conditions, particularly in oil-dependent economies, and the regulatory challenges experienced, the group would benefit from the fundamental changes implemented.
Following the hefty Nigerian fine, the company appointed senior managers, including Felleng Sekha who joined the group as executive for regulatory affairs and public this month.
Jon Tullett, the Research Manager at International Data Corporation, said the September quarter results were much needed good news for the troubled operator on two levels.
“Firstly, MTN’s strong performance on network is good for transitioning from voice to data. Secondly, the acceleration of new chief executive is very important;they need strong established leadership to take them forward,” he said. MTN was slapped with the record fine for unregistered SIM cards in Nigeria last year.
The market capitalisation of the Nigerian Stock Exchange dropped by N164bn at the close of trading on Tuesday as 27 stocks closed in the red.
The NSE market capitalisation dropped from N9.471bn recorded on Monday to N9.307bn, while the All-Share Index slid to 27,098.52 basis points from 27,574.95 basis points.
A total of 113.498 shares valued at N1.233bn were traded in 2,435 deals.
Ashaka Cement Plc, AG Leventis Nigeria Plc, Vitafoam Nigeria Plc, Cement Company of Northern Nigeria Plc and Dangote Cement Plc emerged as the top five losers, while 11 stocks appreciated in value, according to te NSE data.
The share price of Ashaka Cement closed at N12.26 from N13.57, losing N1.31 (9.65 per cent), while a drop of N0.04 (4.94 per cent) was recorded on AG Leventis shares, which closed at N0.77 from N0.81.
Vitafoam shares also plummeted by N0.13 (4.92 per cent) to close at N2.51 from N2.64, while the share price of CCNN dropped by N0.27 (4.91 per cent) to close at N5.23 from N5.50.
Dangote Cement share price also recorded a loss of N8.83 (4.83 per cent) to close at N174.17 from N183.
The bears took charge of market activities, resulting in a decline of 1.73 per cent in the NSE ASI, with the year-to-date sliding further down to 5.39 per cent negative.
Volume traded and market turnover appreciated by 12.17 per cent and 16.25 per cent respectively. Presco Plc, Wema Bank Plc, Unity Bank Plc, Caverton Offshore Support Group Plc and Skye Bank Plc topped the gainers’ chart, appreciating by 5.09 per cent, 4.92 per cent, 4.84 per cent, 4.44 per cent, and 3.28 per cent accordingly.
The NSE indices showed that all sectors closed in the red zone at the end of Tuesday trading, save for the oil and gas sector that appreciated by 0.53 per cent. The industrial and banking sectors dropped by 2.15 per cent and 0.71 per cent, respectively.
Commenting on the market outcome, analysts at Meristem Securities Limited said, “We attribute the magnitude of the loss in the market today to the 4.83 per cent price decline in Dangote Cement, as the bourse, aside Dangote Cement, would have only lost 0.2 per cent at the close of trading session.
“While performance scorecards in this earnings season have been generally weak, we note that sentiments have not been swayed by positive results released by some companies. Hence, we anticipate that market returns will remain pressured over the short-term.”
Shareholders of Zenith Bank Plc should expect higher dividend at the end of the current financial year given the impressive results the bank has recorded for the nine months ended September 30, 2016.
According to results released monday, Zenith Bank recorded gross earnings of N380.4 billion in 2016, showing an increase of 12.9 per cent from N337.9 billion in the corresponding period of 2015. Net interest income grew by 17.6 per cent from N161.4 billion to N189.8 billion, while impairment charges rose by 124.8 per cent to N9.7 billion to N21.9 billion. However, other income soared from N9.7 billion in 2015 to N32 billion in 2016.
Hence, Zenith Bank ended the period with profit before tax (PBT) of N121.2 billion, showing an increase of 16.6 per cent above the N104 billion posted in the corresponding period of 2015. Profit after tax (PAT) recorded faster growth of 20.4 per cent to N100 billion, up from N83 billion.
Also, the bank attracted more deposits and also gave out more loans and advances. Deposits rose from N2.557 trillion to N2.692 trillion, while loans and advances grew from N1.841 trillion to N2.425 trillion. Total assets hit N4.654 trillion, up from N4.0 trillion in 2015.
Reacting to the results, analysts at FBN Quest said given the nine month profit before tax of N121 billion, the N123 billion made by the management for the full year would be surpassed.
The analysts said:” On the back of these results, we would expect consensus PBT for 2016 to move up strongly, from N123bn currently, given that the nine months result is N121 billion. The operating expenses and interest expense figures are disappointing and would draw some scrutiny from the market. However, we expect the fx-related gains to more than compensate for these, given their magnitude and the fact that it was the absence of such gains in second quarter (Q2) (especially on the non-interest income line) that led to a muted to negative reaction by the market.”
Also assessing the results, analysts at Cordros Capital Limited said Zenith Bank reported an increase in earnings per share (EPS) to N3.18 for the period, compared with an EPS of N2.64 in the previous year. Return on average equity (RoAE) improved to 19.2 per cent versus the 14.8 per cent recorded as at the previous quarter. “The result was impressive, outperforming both management guidance and consensus estimate,” they said.
The Central Bank of Nigeria and other key stakeholders in the payment sector have started tackling cases of electronic fraud (efraud) in the country, with the hope of finding a lasting solution.
The Chief Executive Officer, Electronic Payment Providers Association of Nigeria, Mrs. Regha Onajite, made this disclosure to our correspondent, saying that the CBN had vowed to check the over N4bn being lost to cases of e-frauds annually.
She said that with over N30tn transactions carried out on different e-payment channels by businesses and individuals in the country, “the CBN and other stakeholders have expressed worry over cases of e-fraud, which they said had been discouraging financial inclusion.”
Onajite, therefore, said that the central bank and financial stakeholders in the country would converge on Lagos at the annual Payment Systems and Fraud Conference to find a final solution to electronic fraud (e-fraud) in the country.
“This conference will bring together senior level officers of the fintech sector, banking, regulatory bodies and public officers. Our core focus in this years’ edition is to tackle fraud in a proactive and top-down approach that involves people, process and technology.
This will help create effective combat against the activities of the e-payment fraudsters in Nigeria,” the E-PPAN CEO said.
Explaining specific objectives of the conference, she said it would address the challenges posed by people’s laxity in divulging and compromising organisation information system to fraudsters.
“It will also reappraise, reconnect and tackle the processes that compromise the entire system of e-payment hemisphere in Nigeria, and fashion out how organisations can invest in and deploy the right technologies to enable the industry to be a step ahead of these criminals,” she said.
Onajite added that E-PPAN partners at this year’s event, apart from the CBN, included the Nigerian Electronic Fraud Forum, Committee of Banking Heads, Committee of Chief Compliance Officers of Banks in Nigeria, Information Security Society of Nigeria and the Association of Chief Audit Executives of Banks in Nigeria.
“The conference has been designed to be a veritable rallying ground for the financial industry to deliberate on payment systems and fraud knowledge in West Africa,” she said.
A new report by the Nigeria Extractive Industries Transparency Initiative has revealed that disbursements from the Federation Account to the three tiers of government plunged by 31 per cent in the first half of this year relative to the corresponding period of 2015.
According to NEITI, the drop in revenues may negatively impact budget implementation across the three tiers of government this year, increase the size of budget deficits, and deepen the debt burden.
The report, which is entitled: ‘FAAC disbursements in the first half of 2016 and possible implications’, is the maiden issue of the NEITI quarterly review.
It analysed disbursements by the Federation Accounts Allocation Committee in the first halves of 2015 and 2016, and highlighted possible implications for public governance and management in the country.
It stated that revenues shared to the federal, states and local governments were less by over N800bn from N2.89tn in the first half 2015 to N2.01tn in a similar period this year.
NEITI stated in the report, “This 30.9 per cent decline reflected in lower allocations across the board. The total disbursement to the Federal Government fell from N1.23tn in the first half of 2015 to N854bn in the first half of 2016.
“This represents a 30.9 per cent decline. Total disbursements to the states fell by 30.5 per cent from N1.009tn in the first half of 2015 to N701bn in the first half of 2016. For local governments, allocations from FAAC dropped by 26 per cent from N580.63bn to N429.43bn.”
The Nigerian equities market was characterised by cautious trading as investors await third quarter corporate performance of companies. Following the cautious trading, lower volume and value of trade were recorded while the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 0.95 per cent to close at 27,596.82 compared with a marginal growth recorded the previous week. Market capitalisation closed lower at N9.479 trillion. The market recorded declines in four out of five trading days of the week, to bring the year-to-date decline to 3.65 per cent.
Apart from the ASI, all other indices finished lower during the week with the exception of the NSE Industrial Goods Index that appreciated by 0.52 per cent.
The NSE Industrial Goods Index appreciated by 0.52 per cent. But the NSE Oil & Gas Index recorded the highest decline of 2.98 per cent following losses by Forte Oil Plc (12.2 per cent), Oando Plc (2.1 per cent) and Eterna Oil Plc (1.0 per cent).
Consumer Goods Index followed with a decline of 1.94 per cent as a result of loss suffered by Cadbury Nigeria (16.2 per cent); Guinness Nigeria (3.6 per cent) and Nigerian Breweries Plc (2.5 per cent). Similarly the NSE Insurance Index and NSE Banking Index fell by 0.64 per cent and 0.50 per cent in that order.
Daily Market Performance Summary
Last Monday, the market opened on a bearish note as huge sell offs in bellwethers across sectors – Nigerian Breweries (-3.1 per cent), Forte Oil Plc (-5.0 per cent) and Zenith (-2.0 per cent) – dragged the benchmark index 0.81 per cent lower to close at 27,634.99.
Similarly, market capitalisation shed N77.6 billion to close at N9.5 trillion. Activity level in the market was mixed as volume traded improved 15.8 per cent while value traded declined 49.2 per cent to close at 255.8 million units and N778.4 million respectively.
Performance across sectors was bearish as all indices closed in red except for the NSE Insurance index, that rose by 0.1 per cent. The NSE Oil & Gas Index declined the most followed by the NSE Consumer Goods Index.
The bearish trend was sustained on Tuesday with the NSE ASI declining by 0.29 per cent to close at 27,555.31
The Nigerian Stock Exchange All Share Index (NSE ASI) depreciated by 0.29 per cent to close at 27,555.31, compared with the depreciation of 0.81 per cent recorded the previous day. The depreciation recorded in the share prices of Diamond Bank, Cadbury, UAC of Nigerian, Seplat and GTBank were responsible for the loss recorded in the NSE ASI.
This negative performance was broadly driven by sell pressure on Seplat (-5.0 per cent), ETI (-2.6 per cent), Guinness (-3.9 per cent) and Nestle (-0.7 per cent). Consequently, market capitalization dipped N27.4 billion to settle at N9.5 trillion.
Similar to the previous trading session, performance across sectors was bearish as all indices closed in the red save for the Industrial Goods index which rose 0.3 per cent on account of bargain hunting in Lafarge Africa Plc(+0.8 per cent).
The market recorded its third consecutive decline on Wednesday as the NSE ASI fell by 0.28 per cent to close at 27,478.04. Similarly, the market capitalisation depreciated by 0.28 per cent to close at N9.44 trillion. The depreciation recorded in the share prices of Forte Oil, Dangote Sugar, Cadbury, Oando and Zenith Bank were responsible for the negative performance.
Just as the previous two trading sessions, sectoral performance showed negative in all except the NSE Industrial Goods Index which rose 0.3 per cent driven by bargain hunting in Lafarge Africa. The NSE Oil & Gas Index fell by 3.0 per cent, while the NSE Insurance Index went down by 0.2 per cent. Similarly, the NSE Consumer Goods and Banking indices dipped 0.2 per cent and 0.1 per cent in that order.
Thursday was the only day the market recorded a positive performance last week as appreciation recorded in the share prices of GTBank, Seplat, UBA, Oando and Access Bank lifted the NSE ASI to close 0.44 per cent higher. However, the rebound witnessed in the market on Thursday could not be sustained on the Friday, which was the last trading day for the week. The market remained flat as the NSE ASI closed at 27.596.82.
The total value of stocks traded on Friday fell by 83 per cent to N656 billion, from N4.01 trillion the previous day, while the total volume of stocks traded was 70.93 million in 1,973 deals.
Market turnover
Market turnover for the week stood at 674.721 million shares worth N7.657 billion in 12,290 deals compared with a total of 1.163 billion shares valued at N9.251 billion that exchanged hands the previous week in 14,992 deals. The Financial Services Industry led the activity chart with 495.992 million shares valued at N2.767 billion traded in 6,522 deals; thus contributing 73.51 per cent and 36.14 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 80.885 million shares worth N95.212 million in 536 deals. The third place was occupied by the Construction/Real Estate Industry with a turnover of 32.484 million shares worth N18.498 million in 70 deals. Trading in the top three equities namely – Law Union & Rock Insurance Plc, Ecobank Transnational Incorporated (ETI)and Transnational Corporation of Nigeria Plc accounted for 263.199 million shares worth N1.033 billion in 637 deals, contributing 39.01 per cent and 13.49 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 10,779 units of Exchange Traded Products (ETPs) valued at N63,890.18 executed in 22 deals, compared with a total of 119,743 units valued at N600,589.51 transacted the previous week in 25 deals.
Similarly, a total of 1,700 units of Federal Government Bonds valued at N1.518 million were traded in 1 deal compared to a total of 1,510 units of Federal Government Bonds valued at N1.558 million transacted two weeks ago in one deal.
Gainers and losers
Meanwhile, the price movement chart showed 16 gainers, which is lower than 22 equities of the previous week. Conversely, 38 equities depreciated in price, lower than 42 equities of the previous week, while 126 equities remained unchanged. Caverton led the price gainers, rising by 13.1 per cent. The stock had similarly led the gainers the previous week.
N.E.M Insurance Plc followed with a gain of 5.0 per cent, just as Neimeth International Pharmaceuticals Plc and Wema Bank Plc rose by 4.8 per cent apiece. Beta Glass Plc and GTBank Plc appreciated by 3.3 apiece. Other top price gainers included: Skye Bank Plc(3.2 per cent); Stanbic IBTC Holdings Plc (3.0 per cent); Mobil Oil Nigeria Plc (2.1 per cent ) and Learn Africa Plc (1.6 per cent).
Conversely, Cadbury Nigeria Plc, which led the price losers, shedding 16.2 per cent trailed by GSK Nigeria Plc with 14.1 per cent. A.G Leventis Plc fell by 12.9 per cent, while Forte Oil Plc and NAHCO declined by 12.2 per cent and 11.5 per cent in that order.
Ashaka Cement Plc and E-Tranzact went down by 9.7 per cent and 9.5 per cent respectively. Other top price losers included: ETI(9.1 per cent) and Livestock Feeds Plc (7.2 per cent).
The Guaranty Trust Bank Plc recorded a growth of 44 per cent in gross earnings in its unaudited financial results for the third quarter ended September 30, 2016.
The lender closed third quarter with gross earnings of N329.3bn, from N229.4bn reported in the corresponding period of September 30, 2015.
The result, which was released to the Nigerian and London Stock Exchanges, showed positive growth across all key financial metrics and improved strategic positioning of the brand.
The gross earnings growth, the bank explained, was driven by growth in fee and commission income as well as foreign exchange income.
Its profit before tax stood at N140.84bn, representing a growth of 53 per cent from N92.06bn recorded in the corresponding period of September 2015.
The bank said its loan book grew by 19.6 per cent from N1.372tn recorded in December 2015 to N1.640tn in September 2016.
It closed the third quarter with total assets of N3.093tn and shareholders’ funds of N483.4bn.
The bank’s non-performing loans remained at 4.13 per cent, with Return on Equity and Return on Assets closing at 35.31 per cent and 5.69 per cent, respectively. Commenting on the bank’s financial results, its Managing Director/CEO, Segun Agbaje, said, “The bank’s strong performance is a reflection of the continued support of our customers, hard work of our workers and the commitment of the management and board to manage the bank for long-term sustainable returns.”
Stanbic IBTC Bank Plc has clarified the responses given by its Chief Executive Officer, Olayinka Sani, at a Senate committee hearing on the alleged illegal repatriation of funds by MTN.
According to the bank, Sani who spoke on behalf of the bank at the hearing, reiterated the fact that Stanbic IBTC was ready to cooperate fully with the Senate (as it had been doing with the Department of State Services, DSS) in ensuring that the truth in respect of the transactions done on behalf of MTN was unearthed.
Sani told the committee that the investigations are welcomed and would help show that StanbicIBTC has done nothing wrong and has operated to the high governance and ethics standards.
He also noted that Stanbic IBTC had provided all the necessary documents requested for by the Senate, a statement from the bank explained.
Sani also mentioned that the bank had handled on behalf of MTN its private placement when the original shareholders of MTN divested part of their shares in MTN.
One of the senators at the hearing also asked a couple of questions on other issues that were not connected with the MTN transactions and Sani provided responses to those issues.
The Senate hearing was declared opened by the Chief Whip of the Senate, Senator Sola Adeyeye, who represented the Senate President.
The Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions (the Senate Committee investigating the allegations), Senator Rafiu Ibrahim, had in his opening remarks, stated that the essence of the Senate investigation was to enable the Senate understand how the transactions in questions were handled.
He assured all those who were invited to the investigation that the investigation was not a witch hunt but a fact finding exercise.
Ibrahim stated that the public hearing was the first stage of the investigation process; the second stage would involve a comprehensive review of the documents submitted by all parties and would involve the parties being invited on an individual basis to provide clarification on the documents submitted and answer necessary questions from members of the Senate committee and the consultants that had been employed for the exercise.
Afterwards, the senator who sponsored the motion that gave rise to the investigation, Senator Dino Melaye, gave an overview of the purported issues with the repatriations that were done by MTN and its bankers.
The first person that was called to speak in line with the order of the proceedings that was followed by the Senate committee was Mr. Jim Obaze of the Financial Reporting Council (FRC) and he spoke about the functions performed by the FRC.
He went on to add, at the prompting of the Chairman of the Senate Committee, that weak accountability of the regulatory agencies was what gave rise to some of the purported issues.
The acting CBN Director of the Trade and Exchange Department, Mr. Gotring, who represented the CBN Governor was next to speak.
He was questioned about the role of the CBN in approving some of the transactions and the oversight responsibility that the CBN played in respect of the MTN transactions.
The acting Director also shared with the Senate Committee a report that the CBN had previously prepared when an investigation was carried out on the MTN transactions which report he noted had also been given to the Department of State Services (DSS) as part of the DSS investigation.
Gotring also explained to the senators that where for one reason or the other, a bank could not comply with the 24 hour Certificate of Capital Importation (CCI) rule, the bank that was processing the CCI would apply to the CBN for approval to issue the CCI out of time
Nigeria has cut the price of every type of crude it sells in an effort to regain the share of the global oil market at a time when there’s a “huge” glut of cargoes.
The Nigerian National Petroleum Corporation (NNPC) lowered by at least $1 a barrel its official selling prices (OSPs) for 20 out of 26 oil grades monitored by Bloomberg, according to pricing lists.
Qua Iboe, Nigeria’s largest export crude under normal circumstances, was reduced by the most since 2014. The price reductions are due to a “huge cargo overhang” as the country attempts to regain market share, Mele Kyari, Group General Manager for the Oil Marketing Division at NNPC, said by phone.
Like every other producer country, Nigeria is grappling with prices that are less than half what they were in July 2014. What makes the African nation’s situation more acute is a militant campaign that resulted in export flows falling to the lowest in at least nine years earlier this year. Shipments are gradually resuming, and lower prices are a sign Nigeria is seeking to become more competitive in an already oversupplied global market.
“It is a bearish signal for the light, sweet market,” Eshan Ul-Haq, principal consultant at KBC Process Technology Ltd., said in an e-mail, referencing the types of crude Nigeria mostly pumps. “In order to capture a higher share of the market, OSPs have to come down.”
Brent crude futures slumped as much as 2.1 per cent yesterday to $51.57 a barrel, the largest intraday decline since October 7. They were down 2 per cent at $51.64 at 2:17 p.m. on the ICE Futures Europe exchange in London.
NNPC cut the selling price of Qua Iboe for November to a 17 cent premium to the benchmark dated Brent, according to the price list, from $1.07. It reduced the price of Bonny Light to a 7 cent premium and Forcados to a 41 cent discount to dated Brent.
Five companies that market the nation’s crude have raised the issue of high official selling prices, Kyari said earlier this week. But he said yesterday that the pricing decisions were unrelated to those “complaints.”
The reductions take place as the Organisation of Petroleum Exporting Countries (OPEC) — of which Nigeria is a member — attempts to cut its combined output to 32.5 million to 33 million barrels a day in an effort to steady oil markets.
Nigeria has said it will be exempted from any production cuts, though final details of such an agreement have yet to be worked out.
Because an OPEC output cut would primarily affect medium and heavy crude grades, lower prices from Nigeria are likely to reduce the price differential between light and heavier oil, according to Ul-Haq.
Meanwhile, the World Bank yesterday raised its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel as members of OPEC prepare to limit production after a long period of unrestrained output. The benchmark Brent crude price was down by 2.4 per cent to $51.38 per barrel yesterday.
But the World Bank estimated that energy prices, which include oil, natural gas and coal, were projected to jump almost 25 per cent overall next year, a larger increase than anticipated in July.
The revised forecast appeared in the World Bank’s latest Commodity Markets Outlook. According to the World Bank, oil prices are expected to average $43 per barrel in 2016, unchanged from the July report. “We expect a solid rise in energy prices, led by oil, next year,” Senior Economist and lead author of the Commodity Markets Outlook John Baffes said.
“However, there is considerable uncertainty around the outlook as we await the details and the implementation of the OPEC agreement, which, if carried through, will undoubtedly impact oil markets.” A modest recovery was projected for most commodities in 2017 as demand strengthens and supplies tighten. Metals and minerals prices are expected to rise 4.1 per cent next year, a 0.5 percentage point upward revision due to increasing supply tightness.
Zinc prices are forecast to rise more than 20 per cent following the closure of some large zinc mines and production cuts in earlier years. Gold is projected to decline slightly next year to $1,219 per ounce as interest rates are likely to rise and safe haven buying ebbs.
