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E-Financial

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

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Donald Trump
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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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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

E-Financial

Titan Trust Bank Selects Oracle FSS for Core and Digital Banking Technology

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Titan Trust Bank has selected Oracle FSS for its core and digital banking technology, it is understood.

Titan Trust Bank Selects Oracle FSS for Core and Digital Banking Technology

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.


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E-Financial

IMF Appoints Elumelu, Nigerian Businessman to Advisory Council

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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.

IMF Appoints Elumelu, Nigerian Businessman to Advisory Council

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”.


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E-Financial

Fintech, Remittances Anchor Africa’s Booming Payments System

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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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