E-Financial
Unlimited Support from Central Banks Keeps Markets Energise
By Hussein Sayed, Chief Market Strategist at FXTM
Asian equities kicked off Monday trading on a positive note with most benchmarks rising more than 1%, led by a 2.5% rally in the Nikkei 225. US equities also indicated a higher open for the day with the Dow Jones Industrial Average and S&P 500 futures contracts rising 1% and 0.9% respectively at the time of writing.
The Bank of Japan took another step forward on easing monetary policy by announcing a commitment to buy an unlimited amount of government bonds, quadrupling its purchases of corporate debt and lowering the criteria for what debt qualifies.
Central banks’ readiness to ’do whatever it takes’ to save their economies has led to a steep rally in global equities with many major indices up more than 20% from their lows, in what qualifies as a bull market. However, to understand the real economy’s performance and how terrible the situation is at the moment, you only need to look at oil prices. WTI for June delivery declined 11% early this morning to fall below $15, while Brent is trying to hold above $20 after a 4.3% decline. Investors are worried that we will revisit the crash levels from last week when May’s WTI delivery contract plummeted to -$40 a barrel.
Storage capacity is being tested like never before and if demand doesn’t pick up in May, we’re likely to hit negative prices again as we approach the next delivery date. But with coronavirus death rates slowing in hard-hit cities in Europe and the US and governments moving to re-open economies, there is hope of some demand recovering. Whether it is enough to provide a boost to prices remains to be seen, but a slight pickup in demand along with the expected drop in supply may at least prevent prices from falling again into negative territory.
Investors are also keen to know what steps will be taken next by the Federal Reserve and European Central Bank later this week. For the ECB, it’s widely expected to raise its limits for asset purchases and continue to pressure Eurozone governments for further fiscal stimulus measures. We are also expecting to see further discussions related to creating a bad bank, which is clearly needed to confront the upcoming recession.
The Fed is not likely to announce anything new on Wednesday. After successfully calming the markets with several unscheduled policy decisions, it is time to hear the FOMC’s outlook on the US economy and what additional action can be taken if the situation deteriorates further.
Titan Trust Bank has selected Oracle FSS for its core and digital banking technology, it is understood.
The start-up bank recently obtained its license by the Central Bank of Nigeria (CBN).
It’s understood that Temenos and Infosys also competed for the deal.
The shortlist came down to the two most widely installed international core systems in Nigeria, Infosys’ Finacle and Oracle FSS’s Flexcube.
The Nigerian banking sector has seen a great deal of upheaval over the years, with many mergers, start-ups and closures. Flexcube is a well respected name since the late 1990s (the pioneer was Access Bank, now one of the country’s top five banks) and has been a commonly selected platform since then.
The new bank is believed to be one of five to have gained regulatory approval of late (Globus Bank is another).
Local media sources say the new licences stem from the Central Bank’s desire to attract new investments into the sector and better serve the country’s 50 million+ unbanked and under-banked citizens.
Titan Bank is said to be headed by a former executive director of Heritage Bank (which is a Finacle user).
Oracle FSS did not respond to request for comment.
International Monetary Fund (IMF), has appointed Tony Elumelu, Nigerian billionaire and group chairman of Heirs Holdings, owners of United Bank of Africa, to its advisory council on entrepreneurship and growth, convened by Kristalina Georgieva, the fund managing director.
The announcement was disclosed in a statement on Friday.
According to the statement, the IMF advisory council comprises global business leaders, policymakers, and academics dedicated to identifying and addressing regulatory barriers to entrepreneurship.
The IMF said Elumelu will be instrumental in ensuring that Africa’s entrepreneurship is central in policy making.
“Elumelu, Africa’s leading advocate of entrepreneurship and whose Foundation has funded, mentored, and trained over 25,000 African entrepreneurs since 2015, champions entrepreneurship as the engine for the economic transformation of Africa,” the statement reads.
“A self-made entrepreneur, Elumelu’s embracing of entrepreneurship is fundamental to his concept of Africapitalism, his belief that Africa’s private sector can and must play a leading role in the continent’s development, making long-term investments that deliver social and economic value.
“Elumelu will be instrumental in ensuring that Africa’s entrepreneurial potential is central to global economic policy making.”
Speaking at the inaugural meeting of the advisory council on March 26, Georgieva said the appointees would share their experiences on how macroeconomic and financial policies “can provide a supportive environment for innovation, entrepreneurship, and productivity — key ingredients for a thriving private sector and strong economic growth”.
Africa’s Micro, Small, and Medium Enterprises, fintech industry, scaling remittances, and cross-border payments will be the driving forces behind the continent’s digital ballooning payments system, which is estimated to reach $1.5 trillion by 2030.
This is according to a MasterCard-commissioned study by Genesis Analytics, which states that the digital payments economy is growing faster on the continent.
This comes as the World Bank says Sub-Saharan Africa has shown significant growth in financial inclusion over the past decade, much of it driven by mobile money account adoption.
Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at MasterCard, comments: “Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead.
“MasterCard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future.”
The payment technology company went on to say as a longstanding technology partner to Africa, its continues to strengthen its commitment to the continent’s digital growth through strategic investments, public-private partnerships, and innovation initiatives that drive financial health and economic growth.
In addition, it says trends in Africa signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region.
“For over five decades, MasterCard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development.
“With Africa projected to host nine of the world’s 20 fastest-growing economies, we are focused on leveraging our expertise and a technology to support the continent’s continued digital transformation.
“Our investments today will help build a more resilient economy for the future,” says Mark Elliott, division president, Africa, MasterCard
By fostering collaboration with key stakeholders, MasterCard says it aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy.
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