E-Financial
Market Turmoil Resumes as Virus Fears Deepen
Investors have suffered a tough start to the second quarter due to the coronavirus pandemic. After climbing 17.9% from its low in the past seven trading days, the S&P 500 kicked off the new quarter with a 4.4% decline.
It seems most of the global fiscal and monetary stimulus measures have been priced in and the things that matter most at this stage are the infection and death rates of Covid-19.
Psychology has a great impact on asset prices, and with more people realising that the virus could reach them in some way or have already infected someone they know, that’s a good enough reason for explaining why risk assets are unloved.
The upward move in equities we’ve seen over the past week may prove to be a temporary recovery, a dead cat bounce or a bear market rally. Call it whatever you like, but as long as infection rates continue to grow at the current pace, this more or less guarantees weak economic performance going forward and a collapse in earnings.
With global infections likely to reach one million later today and deaths surpassing 50,000, investors are focusing on capital preservation and are looking to return to cash. That suggests another leg lower in equity prices over the next couple of weeks, until investors have a better understanding on how the current crisis will end.
Of course, no one knows with certainty how bad this pandemic will impact global economies and corporate earnings. But it is obvious that corporate buybacks, a major component of the past decade’s bull market, will be missing in 2020 and probably in 2021 depending on how long the crisis persists. These buybacks have been by far the greatest course of demand for stocks since the 2008 crisis.
While some investors may want to take this opportunity of extreme pessimism to begin accumulating stocks, they may soon realise that we haven’t reached the capitulation stage yet. That is when investors surrender or give up trying to recapture lost gains as a result of falling stock prices and is generally considered to be a sign of a bottom in prices.
Today’s US weekly jobless claims release for the week ending March 28 is going to be of more importance than Friday’s non-farm payrolls report. That’s because the NFP will only include data through March 14, so it doesn’t reflect the impact of the last two weeks when millions of Americans filed for unemployment benefits.
Jobless claims may have risen 3 – 5 million in the past week, and we could even see a higher revision of the last week’s 3.28 million print. That suggests April’s NFP may show job losses in 8 digits, which could turn out to be the darkest day ever in the US job market.
Julius Arhebun, the Head of Agency Banking a Nigeria’s leading payment service bank, MoneyMaster, has disclosed that the promotion of financial inclusion is one of the core mandates of the service.
He said this recently as the bank introduced a new 100MB data offer for every transaction made in the offer, which is available for Glo customers using the bank’s USSD banking code, *995#. The initiative is meant to incentivize the unbanked and underbanked population to ease the creation of their own mobile wallet via its USSD banking platform.
According to him, the offer builds on the various financial education “we have been providing online and across our various customer touchpoints”.
He added that “with this new 100MB offer, we want to encourage Nigerians in the unbanked and underbanked pools to be financially included by having at least a mobile wallet. The account number of this mobile wallet is derived from their mobile number, and can be easily recalled”.
MoneyMaster PSB is a leading provider of innovative digital financial products and services that transform lives and contribute to sustainable living.
The PSB has the mission to deepen financial inclusion and has been instrumental in providing financial technology services to bridge the gap between the banked, underbanked and unbanked population.
The payment service bank recently unveiled a 10 percent data bonus for existing and new customers who are on the Glo network for recharges of N1000 or more. The offer has been adjudged one of the best in the country based on the volume of data on offer to customers. The data purchases have a 30-day validity while unused data can be rolled over upon next plan subscription.
As part of President Bola Ahmed Tinubu’s state visit to France, the Chairman of UBA Group, Tony Elumelu in the presence of President Tinubu and the President of France, Emmanuel Macron, signed a landmark business cooperation agreement with the French Finance Minister, Antoine Armand.
The agreement is a significant indication of support by the French Government for the development of UBA’s full banking operations in France.
Speaking at the signing ceremony, Tony Elumelu, the Chairman of UBA Group commented: ”This partnership reinforces our commitment to seamless international banking services for our customers, not just across the 11 Francophone African countries we serve, but Africa as a whole; and French and European customers transacting with Africa.
Expanding into France is a natural progression, with Paris serving as our European Union hub, as we continue to bring Africa and the world together, through innovative financial solutions. Paris will join London, New York and Dubai, as a critical component of our unique global network.”
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally.
Operating in twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.
The National Pension Commission (PenCom) and the Pension Operators Association of Nigeria (PenOp) are taking steps to integrate workers who are not currently contributing to the Contributory Pension Scheme (CPS) into the Micro Pension Plan (MPP).
The initiative targets workers without any form of pension coverage, including those who have left previous employers under the CPS but wish to join the MPP.
The MPP is designed to allow self-employed individuals and those working in companies with fewer than three employees to contribute towards a pension for their retirement or in cases of incapacitation. Additionally, pension operators are developing incentives to make the MPP more appealing to potential contributors.
At the micro pension plan industry stakeholders’ engagement forum held in Lagos recently, organized by PenCom and PenOp, the Acting Director-General of PenCom, Omolola Oloworaran, highlighted the critical role of the MPP.
She said the event’s theme: “Reimagining Micro Pension Plan: Balancing Service, Policy, and Health” accurately captures the essence of the MPP as a transformative tool for improving the lives of Nigerians.
To maximise the impact of the MPP, PenCom is embarking on several initiatives like market segmentation, rebranding, advanced technology, incentives and others.
Oloworaran pointed out that with over 77.5 million workers in Nigeria’s informal sector, even a small increase in MPP participation could unlock billions of naira in savings, positively impacting individuals and the wider economy.
In his presentation on the “Overview of the Micro Pension Plan,” Babatunde Alayande, head of the micro pensions department at PenCom, emphasised the importance of providing incentives to make the MPP more attractive and accessible to its target market.
Okhueleigbe John, head of the micro pension unit at Stanbic IBTC Pension, stressed the need for tailored policies to promote the growth of the MPP. He also advocated more financial literacy, public-private partnerships, and innovative funding strategies to drive incentives for the scheme. Additionally, he called for a review of the pricing structure of micro pensions to make them more appealing to investors.
Dr. Shem Ouma of Kenya APSA also provided valuable insights, recommending that operators incorporate built-in benefits, ensure flexible payment systems for contributors, and leverage technology to drive the MPP forward.
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