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BUSINESS ROUNDUP: Exchange rate rises to N402; World economy enters recession; See other stories that made our pick

BUSINESS ROUNDUP: Nigeria to disconnect Togo and Benin; China displaces America. See other stories that made our pick

Hello, and welcome to Business Roundup this week. Here, we bring you highlights of events that happened during the week -from the capital market, mainstream business activities while not forgetting the tech/economy build up.

Here are the Headlines:

  • Exchange rate rises to N402 as dollar scarcity worsens
  • World economy enters recession -IMF declares
  • Dangote slides down Forbes richest people’s list, loses $2.5bn in 4 weeks
  • CBN suspends Bureau de Change operations

Summary:

Pressures from poor availability of the American dollar in the currency market has crashed the value of the Naira to N402 against the currency on Friday, the same day the suspension of forex trading by street Bureaux de Change (BDCs) took effect. The closure will last two weeks and has the backing of the central bank.

Demand for the American dollar had dwindled in the days preceding the suspension, owing to significant plunge in international travel and international trade but a complete shutdown of parallel market operations means supply will be nearly zero, thus triggering a spike in the exchange rate. Read more

The International Monetary Fund (IMF) Friday officially confirmed that the global economy has moved into a recession. Kristalina Georgieva, boss of the Washington-based lender, said developing countries would need colossal financial stimulus to resist covid-19’s havoc.

Read also: BUSINESS ROUNDUP: Nigeria devalues the Naira; petrol pump price awaits further deliberations; See other stories that made our pick

“It is clear that we have entered a recession” that will be worse than in 2009 following the global financial crisis, Mrs Georgieva said during an online media briefing. She put the estimated financial intervention needed by emerging markets at this time at $2.5 trillion. Read more

Africa’s richest man and the President/Chief Executive, Dangote Industries Limited, Aliko Dangote has dropped down the Forbes rich list after his total net worth dropped by $2.5bn in the last 30 days.Bloomberg Billionaires Index reports that the ranking of the world’s 500 richest people, showed that Dangote’s wealth fell from $15.9bn as of February 25, 2020, to $13.4bn on March 26.

Dangote who had risen to a high of $16.5bn on January 27, 2020, was the only Nigerian on the list of 500 billionaires and retained his position as Africa’s richest person in the latest ranking which now makes him the 77th richest person in the world with $13.4bn. Read more

The Central Bank of Nigeria (CBN) has halted the operations of the Bureau de Change (BDC) segment of the foreign exchange market as part of the grand nationwide scheme to curb the spread of the coronavirus.A response to the request by the BDC operators in the country for a market holiday, the break will last for a fortnight, beginning from today (Friday).

Aminu Gwadabe, President Association of Bureaux de Change Operators of Nigeria (ABCON) disclosed in a circular to operators and directors that foreign exchange (forex) sales from the CBN to the BDC had been put off indefinitely. “This is to urgently bring to the notice of our members nationwide that following our letter of recommendations to the CBN to grant us market holidays on our bidding days as a proactive and preventive measure on the scourge of the novel COVID-19 epidemic and the ban on all air/land travels, the CBN has granted our request, effective Friday March 27, 2020,” the document reads. Read more

On NSE ROUNDUP: Trade volume crashes 48% week-on-week

The volume of trade in the market fell by nearly half this week, raising fears of incremental decline and acute investors’ apathy in the weeks ahead should Covid-19 tighten its stranglehold on the Nigerian bourse.

All the key market performance indicators closed lower this week. However, a positive market breadth was recorded as 34 losers emerged against 30 gainers. The All Share Index (ASI) and the Market Capitalisation respectively diminished by 1.52% and 1.51% with the former tumbling to 21,861.78 basis points and the latter to N11.393 trillion.

Trade Volume of 1.452 billion shares estimated at N14.918 billion was recorded in 21,828 deals this week compared to the 2.804 billion shares worth N32.559 billion posted in 31,715 deals last week. Read more.

Thanks for joining the roundup this week. See you next week for another serving of Business Roundup. Don’t forget, for the latest news and updates from around the globe, keep reading Ripples Nigeria.

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