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OPEC
agreed on Thursday to hold intact a supply policy that has served it
well for nearly two years and set aside the concern that a weak dollar
would drive the oil price too high for a fragile world economy.

Ecuador, which
holds the rotating presidency of the Organization of the Petroleum
Exporting Countries, confirmed the no-change decision and said the
group’s next conference would be in Quito, on December 11.

Earlier, a delegate told Reuters the ministers had been “100 percent” in agreement there was no need to change policy.

Oil prices did not
react to the widely-expected OPEC news, but they held firm at close to
$84 a barrel, drawing support from a weak dollar, which has stoked
buying across the commodities asset class.

The market has
climbed above the $70-$80 price range, which top exporter, Saudi
Arabia, has said is ideal for producers and consumers. But speaking
just before Thursday’s meeting, its oil minister said the kingdom was
still happy with the oil market for now.

“The biggest
challenge we have is to keep the oil market as it is today,” Saudi
Arabian oil minister, Ali al-Naimi, told reporters.

He declined to be
drawn on a price level that might endanger economic recovery, but said
producers were concerned about a possible slide back into recession.

“I hope we don’t have a double dip. Everybody is working very hard to avoid it,” he said.

Oil rises, dollar falls

International
benchmark U.S. crude has this month climbed above Naimi’s favoured
range, as heightened expectation of more stimulus for the United
States, the world’s biggest economy and biggest oil user, has weakened
the U.S. dollar.

The dollar on
Thursday dropped to its lowest this year against a basket of
currencies, making dollar-denominated commodities relatively cheap for
holders of other currencies.

So far, oil’s gains
have been relatively modest – compared with gold which has hit a series
of record highs – as the dollar impact on oil has been countered by
weak market fundamentals of nearly record-high fuel inventories and
sluggish demand.

Some analysts say there is a risk, however, of a strong oil rally.

“Without a specific
commitment to defend a price level, the oil price can move on
fundamentals between $65 and $100. With QE (quantitative easing)
weakening the dollar and stimulating emerging market economies, that
trend is higher,” said Lawrence Eagles of JP Morgan.

Saudi Arabia, which
is keen to preserve long-term demand for its extensive reserves and is
holder of the bulk of OPEC’s spare output capacity, has traditionally
stepped in to add more oil if it considers the market is rising too
fast.

Others in the
group, including Venezuela, Algeria, Iran, and Libya, have tended to
favour a higher price to meet domestic budgetary needs and have argued
a weaker dollar erodes the value of their petrodollars and justifies
more costly oil.

Algerian energy and
mines minister, Youcef Yousfi, said on Thursday he would like to see an
oil price of between $80 and $100 per barrel.

“A price between $80 and $100 would be comfortable as the dollar depreciation is a concern,” he said.

Libya’s most senior
oil official, Shokri Ghanem, said a price of around $75-$85 was
acceptable, but he would welcome more expensive oil.

“As a matter of fact, the terms of trade are going against OPEC because the dollar is getting eroded,” he said.

The decision to
keep output unchanged still leaves the group plenty of leeway to adjust
supplies informally. Compliance with the record cut of 4.2 million
barrels per day (bpd) announced in December 2008 – when OPEC last
formally changed its output policy – has slipped to 57 percent,
according to the latest Reuters assessment.

Ministers can discuss the situation again in the near future.

In addition to
their next output policy meeting in Ecuador, on December 11, Saudi
Arabia is hosting a meeting in Riyadh next week, as part of a wave of
celebrations to mark the 50th anniversary of OPEC, which was founded in
September 1960.

Investors at the
Nigerian Stock Exchange (NSE) on Thursday recorded additional gains on
their equities’ value, as market closed trading on a positive note.

The Exchange market
capitalisation of the 199 First-Tier equities closed yesterday at
N5.999 trillion after opening the day at N5.988 trillion, reflecting
0.18 percent upturn or over N11 billion gains. Meanwhile, about N174
billion has been recovered since transaction began this week.

The NSE All-Share
Index on Thursday also appreciated by 0.18 percent or a gain of 45.8
units from Wednesday’s figures of 24,439.37 basis points, to close at
24,485.17.

Four NSE sectoral
indexes reflected the positive outlook yesterday as the NSE-30 Index,
which measures the performance of blue chips in the market, gained by
0.15 percent; the NSE Food/Beverages gained the highest points by 0.99
percent; Insurance gained by 0.58 percent; the NSE banking, the only
loser, declined by 0.17 percent, while the NSE Oil/Gas moved up by 0.50
percent.

Analysts at
Resource Cap, a portfolio management company, said its outlook for the
market remains positive following the “various measures by the NSE’s
management to restore investors’ confidence in the market.”

Banking sector leads

The banking
subsector was the most active on Thursday, leading market transaction
volume with 84.37 million units of shares valued at N635.17 million, as
against the 198.59 million units of shares valued at N1.65 billion
recorded on Wednesday.

The volume recorded
in the sector was driven by transaction in the shares of Zenith Bank,
First Bank, Intercontinental Bank, and Access Bank. The four stocks
accounted for 21.74 percent of the entire market volume.

The Insurance
subsector followed, trading 30.40 million shares valued at N17.98
million. Transactions in the subsector were largely driven by the
shares of Goldlink Insurance, which accounted for about 75 percent of
the subsector’s volume.

The Food/Beverages
subsector came third with investors trading 15.98 million shares valued
at N483.53 million. Investors in Cadbury and Dangote Sugar enhanced
activities in the subsectors in terms of volume.

More gainers

The number of
gainers at the close of trading session yesterday closed higher at 33
as against the 32 gainers recorded previous day; while losers closed
lower at 18, compared with the 24 stocks recorded on Wednesday.

Flour Mills Nigeria
led the price gainers’ chart, appreciating by N1.40 to close at N69.70
per share. Cadbury shares went up by N1.38 to close at N31.70, while
African Petroleum grew by N1.30 to end at N27.83.

Cement Company of
Northern Nigeria led the price losers’ chart, shedding 60 kobo to close
at N13.40. Unilever lost 48 kobo to close at N29.54, while Dangote
Flour Mills depreciated by 35 kobo to end the day at N15.00 per share.

Meanwhile, as
requested by the board of directors of the concerned companies, the
Exchange on Thursday adjusted the prices of Chellarams Plc and
Custodian & Allied Insurance Plc for a dividend of 8 kobo and 6
kobo respectively.

The Chairman, Board
of National Insurance Commission (NAICOM), Maryam Ciroma, on Thursday,
urged insurance directors to imbibe the culture of good corporate
governance.

Mrs Ciroma said
that this was the only way to make the commission’s enlightenment
programme on corporate governance worth the while. “I urge insurance
directors to reciprocate the good gesture of NAICOM by doing all within
their powers to implement the new code of corporate governance,” she
said. “This is a way of contributing their quotas toward building a
strong and viable insurance industry in the country.”

She said that by adhering strictly to the Code of Corporate
Governance for the industry, the directors would help to sustain the
industry’s premium growth.

The Gombe State
government is to spend N118.36 million as subsidy for the accommodation
of 2,500 pilgrims in Mecca, Saudi Arabia.

The executive
secretary of the State Muslims Pilgrims Welfare Board, Umar Abdulsalam,
told the News Agency of Nigeria (NAN) in Gombe that the government
would subsidise each pilgrim with 1,076 Saudi Riyals (N47,344).

He said the 2,500 intending pilgrims comprised 1,510 males and 1,003 females, to be accompanied by 13 officials.

Mr. Abdulsalam said
the state’s pilgrims would be transported from Gombe International
Airport in five days, starting from October 20.

Georg Kell, the
Executive Director of the United Nations Global Compact, will lead
other business leaders and leaders to resolve issues concerning
corporate governance and its direct bearing on national growth and
development at the CEOs Forum of the 16th Nigerian Economic Summit
taking place at the Transcorp Hilton on October 21.

This gathering will
examine the necessary corporate governance codes, barriers to complete
adherence and its effects on companies’ bottom-lines. Chaired by Mr
Kell, it will be attended by CEOs such as Stephen Onasanya of
FirstBank; Mutiu Sumonu of Shell Companies in Nigeria; Alain D’Kat of
Siemens Nigeria and Ifueko Omoigui-Okauru of the Federal Inland Revenue
Service, among others.

The agenda focuses on strategies for building business models that will enable Nigeria achieve the Vision 20:2020.

The summit,
‘Nigeria @ 50: The Challenge of Visionary Leadership and Good
Governance’, is expected to attract key players in government and
business who will seek progressive steps in moving our economy forward.

The CEOs Forum, which is part of the series of events billed for the
16th Nigerian Economic Summit, scheduled for October 19 to 21, is
organised by the Nigerian Economic Summit Group in conjunction with the
National Planning Commission. It will also feature other sessions such
as the Presidential Policy Dialogue, Election 2011 Debate, Emerging
Leaders Forum, Policy Dialogues and Dialogue with the Economic
Management Team (EMT) amongst others.

Algeria’s liquefied
natural gas (LNG) production capacity should return to normal in a few
months after an accident cut capacity by as much as 20 percent,
Algerian energy minister, Youcef Yousfi, said on Thursday.

Algeria is one of
the world’s biggest LNG exporters, with a capacity of 30 billion cubic
metres (bcm) a year, but output has dropped due to a problem with one
of its facilities, he said, ahead of an OPEC oil exporters’ meeting in
Vienna.

“We had (LNG)
capacity destroyed due to an accident,” he said, adding that the
capacity lost was equivalent to around 5-6 bcm/year.

He did not say when the problem occurred or give a more exact timeline for when it might be fixed.

Zambia aims to
double the contribution of mining to gross domestic product by 2015 by
attracting greater investment in the sector, the president of the
southern African nation said on Thursday.

Rupiah Banda said
in a statement that Zambia, Africa’s top producer of copper, aims to
have mining contribute 20 percent of GDP by 2015. That compares with an
11 percent contribution from mining to GDP now, according to ministry
of mines data.

Mr. Banda said he would ensure stability in the mining industry in order for the country to continue to attract investment.

“The vision of my
government is to have (the) mining industry contributing more than 20
percent to the Gross Domestic Product…in the next five years,” he
said.

The Central Bank is
yet to offer any clue on the interested bidders for some Nigerian
banks, months after officially declaring them up for sale and open to
investors.

However, five or
six of the banks rescued in a $4 billion bailout last year will
announce negotiations with potential investors in the coming weeks, the
Central Bank governor, Sanusi Lamido Sanusi, said yesterday, according
to a Reuters report.

“In the next two to
three weeks, you will hear announcements from five or six institutions
about negotiations on registered acquisitions,” the report quoted him
as saying.

The Central Bank
has over the months, indicated that it has been receiving bids from
interested local and international investors in the rescued banks. It
also gave indications that it had received bids for four of the rescued
banks and that foreign institutions were involved in the bidding
process, as well as several local banks and private equity firms in
partnership with foreign banks.

The Central Bank
rescued nine banks last year, which it deemed undercapitalised and
posing a risk to the other banks in the system. It has since been
seeking new investors to recapitalise them.

A Central Bank
staff, who asked not to be named, said worries on whether there are
bidders should be put to rest, assuring that the interested investors
would be named soon.

“At least three
investors, both local and foreign, are in talks with each of the
rescued banks. Negotiations are on,” he said, adding that it is when
choices have been made and due processes have been followed, that the
regulatory body would make the names public.

Awaiting Asset Management Company

The Central Bank
also stated that the Asset Management Company (AMCON), set up to
purchase non-performing loans and chase the recovery of bad loans,
would begin purchasing assets in the next “two to three weeks. By the
end of this year, we will have put the banking problems behind us,” the
report said.

Finance experts,
however, said there still remain some blurred aspects on the
administration of the company, which is expected to acquire eligible
bank assets from eligible financial institutions, purchase, or
otherwise invest in eligible equities among others.

Bismarck Rewane,
managing director of Financial Derivatives Company, for instance, said
there are still some unclear issues regarding the administration of the
company.

“Issues on the
funding of AMCON remain unclear, though the AMCON executives have been
cleared by the Senate and investors are already scrambling for deals
and steals. The AMCON CEO, however, remains upbeat to deliver on
mandate.

“Biddings have
closed for rescued banks, and announcements of the preferred bidders
will be made in October. AMCON should be in a position to absorb a good
level of toxic assets in 2011. The final negotiation and central exit
is expected early 2011, existing shareholders are to be carried along
in the process,” Mr. Rewane said.

The nine bailed out
banks made provisions by the end of September of more than 2.2 trillion
naira for loan losses. Potential investors are anxious to see how
quickly the AMCON can be set up to soak up bad debts and make the banks
attractive.