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US Elections: Trump Wins! What Does this Mean for Nigeria?

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By Lukman Otunuga, Senior Market Analyst At FXTM

America has chosen Republican Donald Trump as its 47th president following a tight race for the White House!

As of writing, Trump has secured 277 electoral votes with Republicans taking control of the Senate. If the House comes under his control, this will be a “red sweep” scenario.

Assets tied to the “Trump trade” rallied during the Asian session after Trump took an early lead with his victory keeping bulls in the game. US futures are flashing green, Treasury yields have jumped while Bitcoin hit an all-time high.

Before election day, we thoroughly discussed a list of assets that could soar on a Trump win:

· US dollar: jumped 1.8% – its biggest 1-day gain since February 2023 on the prospects of slower rate cuts by the Federal Reserve.

· Bitcoin: rallied almost 10% to hit a fresh all-time high above $75,000 as crypto enthusiasts cheered a pro crypto president.

· S&P500 index: futures climbed 1.4% signalling that the S&P500 will open hitting fresh all-time highs. As mentioned in our week ahead report, the prospects of corporate tax cuts and a softer regulatory environment under Trump is good news for US equity bulls.

What does this mean for Nigeria?

Trump’s victory may pressure oil prices as he is seen pushing for a further increase in domestic oil and gas production, leading to increased supply in the long term.

In addition, his policies could see a boost in US growth – triggering inflationary pressures.

Should this prompt the Fed to keep interest rates higher for longer, a stronger dollar may drag oil prices lower as a result. This could be bad news for major oil producing countries who acquire most of their revenues from oil sales.

For Nigeria, the combination of lower global oil prices and a stronger dollar could add to its woes as it navigates a rough period.

Here are assets that could be burned by Trump’s return to the White House:

· Gold: dropped as much as 1.5% thanks to a stronger dollar and rising Treasury yields. The prospect of slower Fed rate cuts could limit upside gains.

· Chinese stock indices: slipped this morning amid renewed fears over US-China trade tensions.

· European stock indices: flashed red due to concerns over the impacts of Trumps proposed tariffs on Europe.

· Currencies of major US trading partners: Euro (EUR), Chinese Yuan (CNH), and especially Mexican Peso (MXN) have all weakened against the USD.

The bigger picture…

Trump’s return to the White House will most likely set the market tone for the next few years with the USD, Bitcoin and other assets tied to the “Trump trade” the biggest winners.

Investors with some skin in the game have already experienced how markets reacted under Trump between 2017 – 2021.

Trump’s unpredictability, policy uncertainty and tariff wars with China left investors on edge. This and other major themes triggered sharp moves on the Vix index during his term. Market volatility jumped over 60% during Trump’s previous administration, from 2017 until 2020. Since then, volatility fell about 10% under President Biden.

What does this mean?

And Trump’s return to the White House is likely to trigger fresh levels of volatility across the globe.

· Trump’s proposed tariff increases in Europe and China could spark a global trade war.

· If this pushes up the prices for American consumers, a return of inflation may spell higher interest rates – boosting the USD.

· An appreciating USD could hit gold prices along with emerging market currencies.

· On the geopolitical front, Trump has already vowed to “stop wars” and swiftly end the war in Ukraine. Any major shifts in US foreign policy that escalate tensions could trigger risk-aversion.

By the way….

With the US election done and dusted, the next market-moving event could be Thursday’s Fed rate decision.
As discussed in our week ahead report, US interest rates are widely expected to be cut by 25 basis points in November. But the election outcome is likely to determine what action the Fed will take in December and beyond.
Traders are currently pricing in a 67% probability of another 25-basis point cut by December.

Given how Trump’s victory could lead to rising inflationary pressures down the road, this may prompt the Fed to keep interest rates higher for longer.

It will be wise to keep a close eye on the US dollar and gold which remain sensitive to US rate expectations.

· A less dovish than expected Fed may push the US dollar higher while pulling gold further away from its all-time high at $2790.

· If the Fed confirms that a December cut is still on the table, this may limit the USD’s upside while supporting gold prices.


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E-Financial

CBN Issues Scam Alert, Warns of Fake SWIFT Messages Linked to Transfer Claim

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Central Bank of Nigeria (CBN) has advised bank customers to be cautious about the use of fake SWIFT messages during foreign exchange (FX) remittances.

CBN Issues Scam Alert, Warns of Fake SWIFT Messages Linked to Transfer Claim

 

SWIFT messages are sent through the Society for Worldwide Interbank Financial Telecommunication network to facilitate financial transactions between banks and financial institutions.

The CBN gave the warning in a statement signed by Hakama Sidi-Ali, acting director of corporate communications department, on Tuesday in Abuja.

The apex bank said it had been inundated with claims by some stakeholders about the conclusion of foreign currency transfer to their Nigeria bank accounts.

According to Sidi Ali, stakeholders like private entities, individuals, law firms, and government agencies complained that foreign currency funds allegedly transferred to them by foreign entities have yet to be credited to their accounts with Nigerian banks.

“In some instances, the claimants alleged that the funds were withheld by either the beneficiary bank in Nigeria or the CBN and requested assistance towards releasing the funds to them,” She said.

“The requests are usually supported with fake documents such as SWIFT MT103, SWIFT Ack copy, etc.

“It has become imperative to state that the SWIFT ack copy and SWIFT MT103 that these claimants usually attach as evidence of remittance to beneficiary banks in Nigeria are not reliable.”

Sidi Ali added that the SWIFT messages are always not traceable on the SWIFT platform and the funds are not received to enable their application to the beneficiary’s account.

“In a situation where a fund transfer beneficiary receiving bank claims non-receipt of funds remitted by the foreign entity, the standard practice is for the sending customer to contact the sending bank.

“The purpose for the sending bank to send a tracer to trace where the fund is hanging and recall it.

“For the avoidance of doubt, we wish to state emphatically that the CBN neither provides correspondent banking services for Nigerian banks in foreign payments nor maintains accounts for private business entities.

“Consequently, petitioners’ claim that the alleged expected inflows for onward credit into the accounts of private business entities are trapped in the CBN is not only spurious but deceitful.”

The CBN spokesperson urged the general public to be careful with such unauthentic SWIFT messages and documents containing spurious claims of non-application of substantial foreign currency funds allegedly transferred into the beneficiary’s account.

She also warned that the CBN would not hesitate to report any bank customer making unsubstantiated and illegitimate claims to law enforcement agencies for investigation and prosecution.

 

 

 

 


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FG to Establish National Youth Development Bank to Support Young Nigerians

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Federal Government is to establish a National Youth Development Bank and a Youth Data Bank, according to President Bola Tinubu.

FG to Establish National Youth Development Bank to Support Young Nigerians

President Bola Tinubu, represented by Kashim Shettima, his vice, , disclosed this at a Stakeholders Roundtable on Northern Youth Development organised by the Sir Ahmadu Bello Memorial Foundation, in Abuja.

The President described the banks as crucial tools for “providing financial and informational support to young Nigerians.”

He said since assumption of office, his administration unveiled a comprehensive youth development strategy spanning multiple key sectors to drive Nigeria’s economic transformation.

Tinubu extolled the legacy of the late Sardauna of Sokoto and former Premier of Northern Nigeria, Ahmadu Bello

” The late Sir Ahmadu Bello, the Sardauna of Sokoto, was one of the towering giants on whose shoulders we have ascended as a nation.

” His vision was clear: the North cannot progress in isolation, and Nigeria cannot prosper unless every part of this nation thrives,” he said.

Tinubu declared that the development of Northern Nigeria remains fundamental to the nation’s prosperity.

According to him, “whatever disrupts the growth of one region sets back the entire nation.

“For far too long, we have been taunted as a nation with the most children out of school—a reality that should not elicit pride but provoke urgent action.

“This alarming statistic has turned the promise of our population into a challenge rather than the dividend it ought to be,” he added.

 

 

 


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Moniepoint Crowned Financial Inclusion Champion by CBN

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In a move that signposts its market leadership, Africa’s fastest-growing financial institution, Moniepoint has been recognized as the Financially Inclusive Fintech of the Year at the 2nd International Financial Inclusion Conference (IFIC).

This prestigious event which was hosted by the Central Bank of Nigeria (CBN) had in attendance, several key stakeholders in the financial services industry that include Deputy Governor, Financial System Stability, Central Bank of Nigeria, Philip Ikeazor, Director-General, National Pension Commission (PenCom), Omolola Oloworaran, Country Manager and Area Business Head for West Africa, Mastercard, Folasade Femi-Lawal, and Chairman of Committee of e-Business Industry Heads (CeBIH), Ajibade Laolu-Adewale among others.

Themed “Inclusive Growth: Harnessing Inclusion for Economic Development,” this year’s conference brought together global experts, policymakers, and industry leaders to explore strategies for advancing financial access and fostering economic development.

Moniepoint’s stellar contributions and nationwide impact in promoting financial inclusion across underserved communities were celebrated alongside its innovative products and solutions that bridge gaps and provide a secure, fast and transparent way to access digital financial services .

In addition to this accolade, in recent weeks Moniepoint has received several other industry awards, further cementing its position as a leader in driving financial inclusion and economic empowerment across Nigeria.

Commenting on the awards and wins, CEO Moniepoint Inc, Tosin Eniolorunda said “these recognitions underscore our commitment to engineering financial happiness via solutions that empower individuals, small businesses and communities at large. At Moniepoint, we believe that financial inclusion is not just a goal but a necessary foundation for sustainable economic growth and development. We are honored to contribute and support the Federal Government’s aspirations and agenda to become a trillion dollar economy by 2030 and we remain dedicated to making a meaningful impact.”

He continued, “the laurels and accolades are a strong validation of the hard work and dedication that our DreamMakers put into powering the dreams of millions of Nigerians, and it will continue to fuel our passion for driving excellence in Nigeria’s financial services sector. It’s just Day One for us and we will continue to develop solutions that make financial services more accessible to all.”

Scoring an uncommon hattrick, Moniepoint Inc was listed for the third year in a row in the seventh edition of CB Insights annual Fintech 100, a list of the 100 most promising private fintech companies in the world and described as high-momentum companies shaping the future of financial services.

At the prestigious BusinessDay Banks & Other Financial Institutions BAFI Awards 2024, now in its 12th year, which highlights excellence and innovation within the financial services sector and celebrates the institutions that have set new standards in performance, customer service, and leadership, Moniepoint Microfinance Bank won the award for “SME Microfinance Bank of the Year” and Tosin Eniolorunda emerged as the Fintech CEO of the Year.

At the Phillips Consulting (pcl.) Digital Jurist Awards 2024, which celebrates the remarkable achievements of organizations that have exemplified innovation and excellence in leading digital transformation across various sectors in Nigeria, Moniepoint was recognised for Best Digital and Best Website in the Microfinance Bank sector, while winning the award for the Overall Best OFI in Digital Banking Solution Delivery (Vision Category) at the NEXUS 2024 Gala and Awards Night organized by Qore, a leading fintech infrastructure and Banking-as-a-Service platform provider.

Moniepoint Inc. is Africa’s all-in-one financial ecosystem, helping 10 million businesses and individuals access seamless payments, banking, credit, and business management tools since 2019. As Nigeria’s largest merchant acquirer, it powers most of the country’s Point of Sale (POS) transactions. Through its subsidiaries, Moniepoint Inc. processes $17 billion monthly for its customers while operating profitably.


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