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The Egyptian pound traded as weak as 5.9605 to the U.S. dollar on Thursday, its lowest level since January 2005.

Bankers expect the
currency to come under pressure in the coming days as foreign investors
sell shares on the Egyptian stock exchange, which reopened yesterday
after political unrest kept it closed for more than seven weeks.

Nigerian crude oil
grades hovered below two-and-a-half year highs on Wednesday, with
traders adding that the initial rush to buy substitutes for lost Libyan
exports is over. “I think the Libyan shortfall is now fully priced into
Nigerian grades and I see no reason for any upside,” said an oil
trader, with a focus in West Africa. Demand for Nigerian volumes has
been strong because these light, sweet grades are among the best global
substitutes for Libyan exports. Nigerian oil exports are set to fall
slightly to around 2.03 million barrels per day (bpd) in May from a
planned 2.06 million bpd in April. Some discussion was heard at
premiums of up to $1.20 above official selling prices on some grades.
Nigeria raised the official selling price on its benchmark Bonny Light
and Qua Iboe grades to $3.40 a barrel above dated Brent. The Brent
Crude closed yesterday at $115.61 per barrel.

President
Goodluck Jonathan has said that the launch of the gas project will
result in a foreign direct investment of about $10 billion over the
next three years.

He
also said when fully implemented, the entire gas master-plan agenda
will result in $25 billion worth of investments in gas processing,
transmission, and downstream gas utilisation projects, positioning the
country as the regional hub for gas-based industries on fertilizer,
petrochemical, and methanol manufacturing.

Speaking
at the launch of the project with the theme ‘Gas Revolution – the
Rebirth of Nigeria’s Industrialization’ at the banquet hall of the
presidential villa yesterday, Mr. Jonathan said the initiative will
result in 500,000 other direct and indirect jobs that involve
logistics, construction, tourism, and agriculture by 2014.

Beyond
the quantum of foreign direct investment, the president said the
economic impact of this agenda will be enormous in terms of employment
and wealth creation, estimating over 100,000 engineering design and
construction-related jobs will be created from about 2012 and beyond to
deliver all these plants.

Multiplier effect

“The
focus is to catalyze a major industrialisation of the country by
seeding in a few anchor investments that have the highest potential to
have far reaching secondary multiplier effect on the economy.

“The
investment being launched today will result in foreign direct
investment of about 410 billion over the next 3 years. The full
implementation of the entire gas master-plan agenda will result in
about $25 billion worth of investments in gas processing, transmission,
and downstream gas utilization projects,” Mr. Jonathan said.

He
also said the full application of the National Content Law means that
another significant portion of jobs will be created for the Nigerian
teeming population.

“Full
application of the National Content Law means that as we stimulate
these opportunities, a significant portion of the jobs created will be
for Nigerians. When we are done, we hope to have created a Nigeria that
we all would be proud of, a nation in which our youth can clearly see
the roadmap to engagement and self-worth as they get gainfully
employed. This is not just a plan, this is now in action,” he said.

More food

The
president disclosed that more food will be produced affordably and a
huge portion for export with the establishment of fertilizer industries
According to him, the revolution is coming with the replacement of the
use of kerosene and fire woods with LPG (Liquified Petroleum Gas) for
household cooking’s and work towards the elimination of gas flaring
that has been wasted in several years past.

“We
can only be successful if our actions impact on the common man in
Nigeria. The agricultural revolution arising from the fertilizer and
blending plants will create affordable food for Nigerians and a lot
more for export.

“The
LPG agenda will touch the lives of many households, as cheaper and
cleaner LPG displaces kerosene. The disposable income that arises from
the savings will result in the purchase of more goods and services,
boosting GDP,” Mr. Jonathan said.

The
minister of petroleum, Diezani Madueke, said the gas-based industries
refers to only those who utilise gas not fuel, as feedstock. These
include fertilizer, petrochemicals, and methanol.

Profit taking
activities by some investors have been attributed to the decline in
market capitalisation, as witnessed yesterday at the Nigerian Stock
Exchange (NSE).

The NSE market
capitalisation of the 194 First-Tier equities closed lower on Thursday
at N8.009 trillion after opening the day at N8.077 trillion, reflecting
0.84 per cent decline or N68 billion losses. The market had gained N94
billion after Wednesday’s trading session.

Olugbenga Emmanuel,
a finance analyst at WealthZone Company, an investment management firm,
said profit taking was expected following the recent upturn recorded in
the market.

“The market has
been showing mix performances in the past few weeks before it went up
last Friday. And since the recent upturn, investors, particularly the
fund managers, have been taking the little profits on their
investments,” Mr. Emmanuel said.

However, analysts
at BGL Securities, one of the stockbroking firms that recently met the
N70 million minimum capital base requirements instructed by the NSE,
said, “We advise investors to always consider fundamentals (performance
of intended equity) as they make their investment decisions.”

Low Gainers

At the close of
trading on Thursday, a total of 18 stocks appreciated in price lower
than the 45 recorded the previous day, while 34 stocks depreciated in
value, higher than the 18 of Wednesday.

Lafarge Wapco
Cement and Cement Company of Northern Nigeria topped the price gainers’
table with an increase of five per cent and 4.99 per cent, to close at
N40.98 and N11.58 per share, respectively. Transnational Corporation
and United Bank followed in the chart with an increase of 4.71 and 4.70
per cent, to close at 89 kobo and N3.34 per share.

On the losers’
side, Aiico Insurance and HoneyWell Flour Mill led on the price losers’
chart with a loss of five per cent and 4.90 per cent respectively, to
close at 95 kobo and N5.24 per share. First City Monument Bank and
Costain West Africa followed with a decrease of 4.89 and 4.87 per cent,
to close at N6.42 and N5.67 per share.

Most Active

The Banking
sub-sector maintained its lead as the most active with 111.825 million
quantities of shares, valued at N977.489 million. The sub-sector’s
volume was largely driven by shares of Zenith Bank, First Bank, and
Diamond Bank.

Trading activities
in the Insurance sub-sector was second highest yesterday, with 15.194
million shares valued at N12.346 million. Volume in the sub-sector was
boosted by deals in shares of Aiico Insurance, Lasaco Assurance, and
NEM Insurance.

Meanwhile, the
management of Union Bank, on Thursday, officially notified the Exchange
that it has recently executed a Memorandum of Agreement (MOA) with the
African Capital Alliance Consortium, the core investor selected by the
bank’s board of directors.

The bank further
stated that it will within the next few days make “a deal announcement
to advise” all concerned Union Bank’s operators of the signing of the
MOA.

Central Bank of
Nigeria (CBN) sold $16.6 million in short-tenored foreign exchange
forwards at its first such auction on Wednesday, at rates which
indicated it expected the currency to remain stable or strengthen.

The regulator began
offering 1- 2- and 3-month forwards at its bi-weekly foreign exchange
auctions on Wednesday as part of efforts to smooth dollar demand and
help businesses in sub-Saharan Africa’s second biggest economy hedge
currency risk.

It sold $10 million
worth of 1-month forwards at 152.18 naira, $620,000 of 2-month forwards
at 153.97 naira, and $6 million of 3-month forwards at 154.10 naira at
the auction, currency dealers said on Thursday.

The naira, which
eased to its weakest level in 18 months last week, ahead of April
elections, was trading at 155.90 to the dollar at the interbank market
on Thursday, compared to Wednesday’s close of 156.05.

Increase demand

Although demand at the maiden forwards auction was relatively low, analysts expect it to pick up over time.

“Although
yesterday’s forward auction could be perceived as a relative failure
given the marginal level of demand, we note this was the first attempt
by the Central Bank to formally launch derivative products,” said Samir
Gadio, emerging markets strategist at Standard Bank.

“This was more a test auction and volumes could still increase in the future as more corporates get set up to bid,” he added.

Dollar demand rose
to $584 million at the Central Bank’s bi-weekly spot forex auction, the
highest for months, but the regulator sold only $400 million at 151.27
on Wednesday. It met all the demand at the forward auction.

Businesses and rich
Nigerians are going long dollars to hedge against the risk of any
prolonged political upheaval due to a April 9 presidential vote, in
which President Goodluck Jonathan is seen as the front runner.

Boost liquidity

It is hoped that
developing naira forwards will boost liquidity in the foreign exchange
market, but analysts say the move may not be sufficient to ward off
short-term volatility in the run-up to the polls.

“We expect the
forward market to help smooth aggregate forex demand only gradually in
the medium to long run rather than immediately, notably given the
speculative nature of the current pressures on the exchange rate,” Mr.
Gadio said.

I remember vividly
when I was a manager in the strategy/account planning department of
Centrespread FCB, an advertising agency. I had the onerous task of
conducting consumer insights on lottery business operations for Lotto
Nigeria. The agency developed some brand slogans ‘Levels fit change’
and ‘Level go change’. These slogans were tested across the key
geographical regions in the country.

‘Levels go change’
was eventually selected based on consumer insights. Consumers believed
it was their own language and in line with their thinking. They
believed the slogan definitely inspired them, that with a new lottery
company, their lives would experience transformation, as they would
never operate on the same level again.

In essence, the
slogan captured their language because it resonated with what they
wished and desired. Consumers tend to respond to any brand that deploys
their language to communicate with them. They develop both emotional
and physical attachments to brands that speak their language. Times are
really changing, and consumers want to maintain a direct relationship
with brands. When ‘Levels go change’ was being tested, the consumers
were already desirous to know the company that wanted to change their
levels for the better. The name of the brand was not revealed then.
Despite this, there was an instantaneous connection because the brand
communicated the language of the consumers.

The only way to get
true connection with consumers is to develop real, long-term
relationships with them. A major way to achieve this is through
language. It has been revealed through several researches that
consumers want to be reached in their own ways. Their own ways revolve
round their language, culture, and thinking. The era of developing
sophisticated communication campaigns is gone. Consumers want simple
and direct communication, and when brands identify with this, it builds
positive perception and fosters relationships.

They are further
captivated and engaged when brands speak the language that aligns with
their yearnings. Brands that speak consumer language can never fade
from their minds.

Etisalat deployed
this tactic in the ‘one million dollar’ promotion campaign. “I don
hammer o” was the language of the winner on the billboards after the
promotion. This strongly sends a signal to others that they can also
“hammer” (which means hitting a goldmine) with Etisalat. Brands should
touch local sentiments and make messages more endearing to the
consumers.

Companies should
engage consumers, listen to them closely, and deploy the major way to
communicate in their language. Companies with consumer mass appeal
brands can also breathe a new life into their brands by speaking
consumer languages. The brand image can be revitalised by speaking
consumers’ minds. I believe Airtel achieved this in their outdoor
communication. One of such is “With Airtel, there is no congestion”. A
traffic jam was the image used to depict ‘no congestion’. This is one
that refreshes the brand in the minds of consumers.

Though the written
or spoken language can be powerful as the imagery deployed, language
also unlocks the values trapped within the brand that consumers desire
or long for. The time has come indeed for companies to make their
brands forward thinking by adopting a strategy to think and act like
the consumers.

This can only be achieved through a strategic deployment of consumer language.

Kudos to my lecturers

I had a chance
meeting with some of my lecturers after several years, in the course of
promoting my company’s writing academy. I was at Redeemers University
where my former lecturer, Bayo Oloyede, is currently the head of the
Mass Communication department.

Mr. Oloyede was the
one who taught me courses like Writing for the Mass Media and Editorial
Writing. I also visited Caleb University, where I met the big don, Lai
Oso, the professor who taught me courses on Theories of Communication,
Communication and Development, at the Ogun State Polytechnic.

They and their
other colleagues are noble men who have impacted lives .They have
laboured to train several successful professionals who now excel in the
marketing communications industry. Through the thick and thin of pains
and toils, they remain in the ivory tower, moulding lives.

I appreciate their unfavoured commitment to nurturing even the upcoming generations, despite the ingratitude of the society.

On March 8, 2011,
several events took place all over the world to mark the centenary of
International Women’s Day. Nigeria was no different and several
workshops, seminars and conferences celebrated the economic, political
and social achievements of women.

Traditional gender
roles historically presented household income from a perspective where
women were expected to stay at home and look after children. The
economic reality today is that to lead even the most modest existence,
more often than not, requires a two-income family. Most families have
to rely on incomes from both partners in order to meet family goals of
educating children, living in a decent home and planning for retirement.

Barack Obama, on
October 5, 2010, addressed the 2010 Fortune Most Powerful Women Summit
in Washington, D.C. where he honoured accomplished women from around
the world. He stated that women make up half of America’s workforce and
are primary or co-breadwinners in two-thirds of American families.

Women all over the
world are earning more than ever before, and many are contributing a
significant part of the household income, sometimes even assuming the
role of primary breadwinner. This social phenomenon is bringing about
profound changes and has financial, emotional and psychological
implications for both men and women particularly in a patriarchal
society such as ours with its traditional views of gender roles. Any
role reversal can be destabilizing, and this trend can lead to
frustration or resentment as an increasing financial burden is placed
on women on the one hand and potentially bruised male egos on the other.

Generations of
women have held the Proverbs 31 woman as their role model. Even though
she existed thousands of years ago, her approach to life and her
finances, is more relevant than ever for the 21st Century woman.
Proverbs 31 forms a veritable guide to all women of what we can aspire
to and with wisdom, determination and focus, today’s woman is capable
of making a success of both her home and her work. Here are some
practical financial lessons from her that we can imbibe in our own
lives.

She is frugal

“She is like the
merchant ships, bringing her food from afar.” She is prudent about her
shopping and is quality conscious. She will go some distance to ensure
that she gets value for money. We too can be frugal in our shopping,
and avoid impulse buying.

She invests wisely

“She considers a
field and buys it; from her earnings she plants a vineyard”. Apart from
working to earn a living, she invests carefully. She not only plans for
the short term but understands and seeks the benefits of long term
investments and income and contributes to the financial well-being of
her household. She is reliable and dependable and her husband trusts
her and has full confidence in her ability to make the right day-to-day
decisions and administer the family assets efficiently.

She plans ahead and is organised

“When it snows, she
has no fear for her household; for all of them are clothed in scarlet.”
She is an organised and energetic woman who manages her time
efficiently; she accomplishes more by starting her day early and
carries out her responsibilities with diligence and good cheer.

She is an entrepreneur

“She makes linen
garments and sells them, and supplies the merchants with sashes.” “She
sees that her trading is profitable, and her lamp does not go out at
night.” This woman runs a business from her home and has the business
acumen to be a successful trader in the marketplace. Her effort and
industry supplement the family income.

She is talented and industrious

“She stretches out
her hands to the distaff, and her hands grasp the spindle” She uses her
creative talents to earn additional income to support her family. She
is a wonderful example of diligence and industry. With a little
imagination and determination you can put your talent to good use. You
may be a great cook, have a special voice, or be a gifted tailor. How
can you develop these skills through diligent application to the point
where they can increase your income?

She is generous

“She extends her
hand to the poor, and stretches out her hands to the needy.” She is
generous; not only did she care for her family and her domestic staff,
but she also gave back to society and cared for the poor and needy.

She keeps fit and strong

“She girds herself
with strength and makes her arms strong”. We get the impression of a
woman who kept herself physically and mentally fit and well, through
exercise and an appropriate diet.

She is submissive

There are
misconceptions about the word ‘submissive’. To many ‘modern’ women, the
word has a negative tone about it as it connotes weakness. Yet, a truly
submissive woman is not feeble. She lays aside all negative
connotations to rest and sees the ideals of submission not as
subservience or as a threat to her identity, but rather, as a
partnership. It does not undermine her, her confidence or her position.
There is no contest about who is ‘in charge’. She is her husband’s
helper. Whilst submission may not be an easy or popular choice, it
brings harmony to a home. It is that admission of dependence upon one
another and an acceptance of our traditional roles.

It is far too easy
to place the Proverbs 31 woman up on a pedestal as if to try to emulate
her is an unattainable goal. In examining the characteristics of this
remarkable woman, as we pass through our diverse and complex
lifestyles, juggling family, home, work, career and business, let us
see if we can come any closer to this ideal in our own lives and as
traditional gender roles evolve.

The inflation
numbers for February are in, and they do surprise. Prices, it seems,
are not growing as fast as they did two months ago. According to the
new numbers, consumer prices in the country rose by 11.1% in the year
to February, down from 12.1% in the year to January. Why? The most
basic problem with inflation statistics in the country is its failure
to tell a coherent story.

Before the 12.1% in
January, the Composite Consumer Price Index (CPI) was 11.8% in
December, and 12.8% in November. Try as hard as you may, it is well
nigh impossible to make sense of these movements, still less predict,
on this basis, the inflation trajectory over three months.

In an election
year, there were reasons galore to imagine that government spending was
going to be a major source of pressure on domestic prices. Pork-barrel
politics is almost unavoidable in a democracy as young as ours, and
with its lack of proper political party/electorate connections. The
structure of government spending is an additional consideration. For a
while now, the bulk of it has been on consumption.

So, if government
was going to spend more in an election year, invariably it was going to
do this at a time when its failure to spend money to improvie domestic
productive capacity has limited supply responses across every sector of
the economy. Moreover, did it matter for relative prices in the local
economy that this is a government that has, since coming into office,
made a poor fist of staying within its spending commitments? Maybe!

The new inflation
numbers upend this logic. Strange though this is, it would seem that
government has not spent as much as most commentators had anticipated.
That somehow, its spending has been sufficiently sterilised.
Alternatively, that because domestic prices have become insulated from
government over-spend, and with both consumer spending and business
investment in the doldrums, inflation is well contained.

There is a
different possibility. Monetary policy may just be working a lot better
than we give the process credit for. Beginning at its September 2010
meeting, the Central Bank of Nigeria’s rate setting committee (the
Monetary Policy Committee – MPC) signalled a lower appetite for
inflation when it added 25 basis points to the policy rate to move it
from 6.0% to 6.25%.

This concern with
“continued high inflation rate” was re-visited at the MPC’s November
meeting, where, even though it agreed to keep the policy rate unchanged
at 6.25%, it included “fiscal consolidation and the continuation of
comprehensive economic and structural reforms to remove supply-side
bottlenecks,” as necessary conditions to relieve the build-up of
pressure on domestic prices. January this year, MPC members voted 11 to
1 to put up the policy rate by another 25 basis points. “Perceived
inflation risks in the near term” was again the main worry of the
monetary tightening process.

Giving this effort,
what chance is there that the CBN’s signals may have worked to moderate
the adverse effects of fiscal excesses on domestic prices?

The apex bank
itself will not pretend that it has a firm enough grip on the
relationship between its base rates and domestic prices, that it then
takes comfort from any of this. The best that can still be said is that
by tinkering with its policy rate, the CBN can nudge interbank rates
along certain tracks for some distance.

But by how much it
can do this is still moot. Anyway, the CBN’s efforts cannot matter that
much, given that the industry through which its rate increases ought to
affect domestic prices, has very tenuous linkages with the real economy.

That said, there
are still questions arising from the inflation numbers. The National
Bureau of Statistics indicates that “Average monthly food prices rose
by 2.9% in February 2011 when compared with January 2011 figure. The
level of the Composite Food Index was higher than the corresponding
level a year ago by 12.2%. The average annual rate of rise of the index
was 13.9% for the twelve-month period ending February 2011”.

Thus, prices did
come under pressure, and significantly too. What the new numbers allude
to is that compared with the figure for the corresponding period last
year, domestic prices have not risen as fast.

Union Bank has signed a memorandum of Agreement (MOA) with the African Capital Alliance Consortium (ACA Consortium ) to invest N112.5 billion ($750 million) in the bank. This is sequel to the earlier announcement that the bank had entered into negotiation with a core investor.

A release from the bank signed by its spokesperson, Francis Barde, added that the MOA will in the main, provide a framework for the process by which the bank will be recapitalised.

“However, the entire process will be subject to the approval of the bank’s shareholders, the Central Bank of Nigeria (CBN), the Securities and Exchange Commission, the Nigerian Stock Exchange, and the Federal High Court,” Mr. Barde further said.

The ACA Consortium is a group of institutional investors led by African Capital Alliance (ACA), a leading independent private equity firm investing in West Africa, principally in Nigeria and Gulf of Guinea.

The ACA Consortium was founded in 1997 with a mission to build Africa’s premier private equity investment firm by mobilising capital, technology, and management resources from local and international sources to unlock Africa’s private sector potential.

The ACA Consortium, which will invest as Union Global Partners Limited, consists of ACA B-Holding Limited, (comprising an ACA managed fund, FMO Netherlands, an international development financial institution, and other co-investors), TRG Management LLP, The Keffi GroupVIII LLC (comprising the Keffi group and other United States-based institutional investors), ABC Holdings Limited (Bank of Botswana) and the Discovery Group.

Status enhancement

The bank said its recapitalisation by the ACA Consortium will enhance its liquidity, corporate governance, and capital adequacy and restore its strong competitive position.

Union Bank is among the banks rescued in 2009 by the CBN, and the chief executive officers sacked. The regulator then injected about N120 billion to save the bank from imminent collapse.

At a meeting held with shareholders in October, the various interest groups in Union Bank agreed that the management should pursue its recapitalisation plans in order to restore the bank to its prime position in the Nigerian banking industry. They agreed that the new core investor should have been in existence for years, with known financial pedigree and global clout that will give the bank leverage in the industry.

“The forum also suggested that the board and management should involve credible shareholders with substantial holdings to be part of the engagement processes with interested investors,” according to a statement signed by Mr. Barde.

This capital injection is so far the most outstanding progress in the effort of the Central Bank of Nigeria to get new core investors for the rescued banks.

Apart from Afribank, which announced the signing of memorandum of understanding (MoU) recently, none of the five other rescued banks have disclosed progress in its agreement with new core investors.

The other banks namely Oceanic Bank, Intercontinental Bank, Bank PHB, Spring Bank, Finbank, Equitorial Trust Bank are yet to announce appreciable success.

Aggrieved shareholders of Bank PHB last week secured a court injunction against the planned sale of the bank to Habib Bank of Pakistan.

As part of efforts to reduce pressure on the naira, the Central Bank of Nigeria (CBN) will today commence the sale of foreign exchange forwards. The sale was supposed to have commenced last Tuesday but had to be postponed due to the introduction of reserve averaging, which was introduced on March 9.

A statement by Mohammed Abdullahi, CBN spokesperson, while explaining the development on the reserve averaging, said, “Being new to the Deposit Money Banks, they require some time to fully digest it.”

A currency forwards market allows traders to lock in the price at which an entity can buy or sell a currency on a future date. In currency forward contracts, the contract holders are obligated to buy or sell the currency at a specified price, at a specified quantity, and on a specified future date. These contracts cannot be transferred.

Market is ready for it

Akinsowon Dawodu, president of the Financial Market Dealers Association (FMDA), believes it is a good idea, if only the CBN can pull it off successfully.

“Consumers are keen and will be glad to have hedging options. The market is ready for it and I think it will depend on its implementation,” Mr. Dawodu said.

He said the efficiency will determine its outcome, going forward. “The effect should reduce some of the panic buying that sometimes arises in the foreign exchange market and in so doing, it will relieve some of the occasional periodic pressure that the naira finds itself under. In the long run, it should help achieve the aim of exchange rate stability,” he added.

He said the introduction would give customers options to hedge against foreign currency exposure, “which should translate to healthier economic activities and better planning on the part of customers.”

According to guidelines recently released in January by the CBN on forwards trading, all hedge transactions with the customers must be backed by trade (visible and invisible) transactions.

“The maximum tenor allowed for foreign exchange forwards and by implication foreign exchange swaps and cross-currency Interest Rate Swaps is now extended to five (5) years. Authorised Dealers may seek specific approval for longer tenors,” the guideline stated.

According to Mr. Dawodu, the swap option will be useful for corporates, as a five-year requirement would allow market to hedge their exposures further into the future. “In practical use would be for a customer who needs a five-year dollar loan but has naira. He could swap his naira for dollar and pay interest, which will be set every quarter over the period,” he further said.

Razia Khan, regional head of Research, Africa, Global Research at Standard Chartered Bank in London, said the huge spending ahead of the elections next month has been a factor in the strength of demand for foreign exchange.

“For now, we do not expect sustained tightening beyond that level, but much depends on how easily demand for foreign exchange is,” Ms. Khan said.

According to the CBN guideline, all foreign exchange forwards bought from the CBN are not transferable in the inter-bank market while authorised dealers are expected to bid on behalf of their customers. This is in order to discourage round tripping.