Major International Business Headlines Brief::: 07 February 2021

Sun Feb 7 08:25:58 CAT 2021

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Major International Business Headlines Brief::: 07 February 2021

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ü  Wall Street Week Ahead: GameStop frenzy reveals potential for broader market stress

ü  U.S. states ask FCC to scrutinize Verizon's plan to buy Tracfone

ü  Kroger to pay $100 to workers who get COVID-19 vaccination

ü  Amazon orders hundreds of trucks that run on natural gas

ü  G4S to hold talks for head-to-head takeover auction - The Telegraph

ü  Daimler to keep "protective hand" on truck unit after spin-off

ü  World shares scale new peak on stimulus hopes; oil gains

ü  Oil rises 1%, hits highest in a year on growth hopes, OPEC+ output cuts

ü  Africa: U.S. President Biden Strikes New Tone in Relations With Africa

ü  Ethiopia: Ministry Needs 3-Trillion Birr for Infrastructural Dev'tministry Needs 3-Trillion Birr for Infrastructural Dev't

ü  Zambia Ban On Car, Grocery Exports Via Vic Falls Border

ü  Nigeria: CBN Hammers Cryptocurrency Traders, Directs Banks to Close Their Accounts

ü  Nigeria: FG Suspends Emirates Airlines Over Covid-19 Violation

ü  Nigeria: Ben Bruce, Other Nigerians React As CBN Bans Crypto Trading

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Wall Street Week Ahead: GameStop frenzy reveals potential for broader market stress

NEW YORK (Reuters) - As the trading frenzy in GameStop Corp shares and other social media favorites recedes, investors are eyeing signs of potential market stress that could weigh on broader stock performance in coming weeks.

For now, U.S. equities appear to be looking past last week’s surge in volatility that led the S&P 500 to its biggest weekly decline since October. Solid earnings, fiscal stimulus expectations and progress in country-wide vaccination efforts are leading stocks back to all-time highs.

The S&P 500 and Nasdaq posted records for a second straight session on Friday.

Some investors, however, worry that the wild swings in GameStop and other “meme stocks” may have exacerbated concerns over market volatility and elevated valuations that could make market participants more risk-averse. The S&P 500 stands near its highest forward price-to-earnings ratio in about two decades after rallying 74% from its March lows.

“The recent retail activity was concerning for the broader market,” said Benjamin Bowler, head of global equity derivatives research at BofA Global Research.

Liquidity in futures on the S&P 500 dried up as market makers and other investors sought to reduce risk during the GameStop surge, according to BofA analysts. Earlier this week “market fragility,” as measured by the bank, stood at its highest level since March 2020, making U.S. equities exceptionally vulnerable to sudden market shocks, the firm said.

Moves in the Cboe Volatility Index, known as Wall Street’s “fear gauge,” also indicate that investors may be more sensitive to market turbulence than usual. On Jan. 27 the index surged 14 points, its biggest one-day gain since March, as the S&P 500 lost 2.6%.

The fear gauge’s climb was eight to 10 points greater than the expected move following such a drop in the S&P 500, according to Stuart Kaiser, strategist at UBS. The outsized reaction, he said, points to heightened jitters among investors that could suggest bigger market sell-offs in response to negative developments.

The VIX has since reverted to its lowest level since early December as U.S. equities have rallied this week. Even so, “I wouldn’t say we’re completely past it yet,” Kaiser said.

Next week, investors will focus on quarterly corporate results from Cisco Systems Inc, General Motors Co and Walt Disney Co as well as data on U.S. consumer prices.

Options markets have not flashed the green light to go full speed ahead with resuming risk.

Investor demand for calls on the S&P 500, used to position for gains in the index, has jumped after plummeting to a multi-decade low earlier in the week, according to Charlie McElligott, managing director, cross-asset macro strategy at Nomura. The swing in demand points to risk of a pullback and choppy trade in the next few weeks, he said. Longer-term, several market analysts say the GameStop effect may be no more than a blip on the radar screen for markets as a whole. Drops in the VIX of 20% or more to below 25 tend to bode well for stocks, with the S&P 500 rising 2.6% a month later, according to Christopher Murphy, co-head of derivatives strategy at Susquehanna Financial Group.

Still, the exuberance that magnified the market’s fault lines has not completely faded. According to data from Trade Alert, options activity shows heavy demand for upside calls in the SPDR S&P Retail ETF, which includes GameStop, and the iShares Silver Trust, which was also rocked by retail trading. As a result, some investors say they plan to tread cautiously for the time being, especially if they are exposed to passive funds that hold a large number of small-cap stocks that could be sensitive to a sudden retail frenzy. “Time will tell whether this has a more lasting effect on the market,” said Matt Forester, chief investment officer of BNY Mellon’s Lockwood Advisors. “We need to police our holdings to make sure we’re not overly exposed to these trends.”

U.S. states ask FCC to scrutinize Verizon's plan to buy Tracfone

(Reuters) - The attorneys general of 16 U.S. states and the District of Columbia on Friday urged the Federal Communications Commission (FCC) to thoroughly investigate Verizon Communications Inc’s proposed $6.25 billion acquisition of pre-paid mobile phones provider Tracfone and impose conditions if it approves the deal.

Verizon said in September it would buy Tracfone, a unit of Mexican telecom company America Movil, in a cash and stock deal.

The state attorneys general said the FCC “should examine whether the acquisition of TracFone by Verizon could significantly reduce millions of Americans’ access to affordable communications services.”

Th letter added, “it is imperative that the FCC thoroughly vet the proposed transaction and impose specific conditions that protect and ensure the public interest before considering approval.”

The state AGs are led by Virginia’s Mark Herring and also include those of Colorado, Connecticut, Delaware, the District of Columbia, Iowa, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont and Washington.

Tracfone is one of the largest providers of telecommunications services under the government subsidy program known as Lifeline with 1.7 million low-income subscribers in 43 states and the District of Columbia, the state AGs’ letter said, while Verizon offers Lifeline in parts of four states.

A Verizon spokesman said on Friday the company “will continue to offer Lifeline service through TracFone and further develop its core brands, products and distribution channels. Strengthening and growing TracFone will benefit value-conscious consumers.”

Tracfone, which serves about 21 million subscribers through more than 90,000 retail locations across the United States, said last year more than 13 million of its subscribers rely on Verizon’s network under an existing agreement. Verizon is the largest U.S. wireless carrier by subscribers.

“We urge the FCC to put the interest of the American consumer before that of big business and request additional information before allowing this acquisition to happen,” said Michigan Attorney General Dana Nessel.

Kroger to pay $100 to workers who get COVID-19 vaccination

(Reuters) - Supermarket chain Kroger Co said on Friday it would give $100 to workers who get a COVID-19 vaccination, joining a growing list of U.S. retailers incentivizing employees to get inoculated against the novel coronavirus as soon as possible.

Kroger, which also operates Ralphs and Harris Teeter among other banners across 35 states, has hired over 100,000 new workers to cater to a surge in demand amid coronavirus lockdowns.

The company said it would also invest an additional $50 million in rewards for associates, including a $100 store credit and 1,000 fuel points for hourly staff.

Other retailers who have taken similar action to encourage their U.S. employees to get a vaccination include Dollar General, German supermarket chain Aldi, Instacart and Trader Joe’s.

According to the U.S. Centers for Disease Control and Prevention, people over 75 and essential workers are scheduled to receive the vaccine in a later phase, after healthcare workers and nursing home residents.

Amazon orders hundreds of trucks that run on natural gas

(Reuters) - Amazon.com Inc has ordered hundreds of trucks that run on compressed natural gas as it tests ways to shift its U.S. fleet away from heavier polluting trucks, the company told Reuters on Friday.

The coronavirus pandemic caused delivery activity to surge in 2020, with truck volumes exceeding 2019 levels on average while passenger car traffic fell. But that increase in road activity means more pollution, as heavier-duty trucks emit higher levels of greenhouse gases than passenger vehicles.

Transportation companies are building their stable of electric vehicles to reduce carbon emissions. Much of the nation’s freight is delivered via medium- and heavy-duty trucks, which account for more than 20% of the industry’s greenhouse gas emissions even though they make up less than 5% of the road fleet, according to U.S. federal data.

“Amazon is excited about introducing new sustainable solutions for freight transportation and is working on testing a number of new vehicle types including electric, CNG and others,” the company said in a statement.

Amazon has ordered more than 700 compressed natural gas class 6 and class 8 trucks so far, according to the company.

The online retailer’s sales rose 38% in 2020; it plans to run a carbon neutral business by 2040.

The engines, supplied by a joint venture between Cummins Inc and Vancouver-based Westport Fuel Systems Inc, are to be used for Amazon’s heavy duty trucks that run from warehouses to distribution centers. More than 1,000 engines that can operate on both renewable and non-renewable natural gas have been ordered by the supplier, according to a source familiar with the situation.

Natural gas emits approximately 27% less carbon dioxide when burned compared with diesel fuel, according to the U.S. Energy Information Administration.

Electric-powered motors are considered less viable for heavy-duty trucks than for the average passenger vehicle.

In 2019, Amazon ordered 100,000 electric vans from startup Rivian Automotive LLC. The first of those vans, to be used for last-mile delivery to customers, are to be delivered this year. The company also ordered 1,800 electric vans from Mercedes-Benz for its European delivery fleet.

Other transportation companies are also experimenting with ways to reduce emissions.

In 2019, United Parcel Service Inc announced plans to buy more than 6,000 natural gas-powered trucks over three years and step up purchases of renewable natural gas (RNG) as part of a $450 million investment to reduce the environmental impact of its 123,000-vehicle fleet.

RNG and natural gas from fossil fuel are both methane gases and can be used interchangeably. RNG is derived from decomposing organic matter such as cow manure on dairy farms, discarded food in landfills and human waste in water treatment plants. It also prevents naturally occurring methane - a powerful greenhouse gas - from being released into the environment.

Amazon shares were down 0.1% in post-close trading. Shares of Cummins rose 4%, while the U.S.-listed shares of Canada-based Westport surged, gaining 47% in the aftermarket session.

G4S to hold talks for head-to-head takeover auction - The Telegraph

(Reuters) - British security group G4S will hold talks with the City’s takeover panel, the Telegraph reported on Saturday, which could lead to a head-to-head auction between North American peers GardaWorld and Allied Universal for the company’s buyout.

Canada’s GardaWorld and U.S.-based Allied last month extended their buyout offer periods for G4S’s shareholders to accept their individual offers, even as the British company’s board had already accepted Allied’s takeover bid.

GardaWorld was in talks to raise more money to sweeten its last bid of 235 pence a share for G4S, the Telegraph reported here, citing City sources. Allied's offer is 10 pence higher.

However, the Telegraph reported that the City expected GardaWorld to return well above Allied’s offer, with G4S shares having closed at 261.1 pence on Friday on the London Stock Exchange.

G4S has restructured its business following a series of setbacks, and the bidding war between the U.S. and Canadian companies for the firm began when GardaWorld made its offer for G4S public on Sept. 14.

Daimler to keep "protective hand" on truck unit after spin-off

BERLIN (Reuters) - German carmaker Daimler aims to keep a “protective hand” on Daimler Trucks, the world’s largest truck and bus maker, following a planned spin-off, Chief Executive Ola Källenius told the Frankfurter Allgemeine Sonntagszeitung (FAS).

Daimler said on Wednesday it plans to spin off Daimler Truck as it seeks to increase its investor appeal as a focused electric, luxury car business.

“The exact percentages are yet to be determined, but at the same time we will keep a protective hand over Daimler Trucks through our shareholding,” Källenius said in an interview with the FAS published online on Saturday.

“Should something happen in the market that would not be in the interests of Daimler Trucks, then we are there,” Källenius said. “But the company will act independently, we will not interfere operationally via the supervisory board.”

The two business would still cooperate - for example, the car business would, if needed, have access to the fuel cell technology of the truck maker, which, conversely, would be able to use the car maker’s battery technology, Källenius said.

He expected Daimler Trucks to be listed on Germany’s blue chip DAX index, like the carmaker.

“I think it is very likely we will get two DAX companies in Stuttgart,” he said.

World shares scale new peak on stimulus hopes; oil gains

NEW YORK (Reuters) - A gauge of global equity markets scaled a new record on Friday on investor expectations of further stimulus from Washington and economic revival hopes that also lifted crude oil prices to nearly $60 a barrel.

MSCI’s all-country world index, which captures equity performance in 50 countries but is heavily weighed to U.S. stocks, especially big tech, rose 0.62% to cap its best week in three months, a gain of 4.35%.

Longer-term Treasury yields rose after a Labor Department report showed U.S. jobs rebounded less than forecast in January, which underscored the need to pass a $1.9 trillion COVID-19 relief package, President Joe Biden said. Democrat lawmakers approved a budget outline that will allow them to muscle Biden’s plan through in the coming weeks without Republican support.

Job losses in December and November were revised higher than previously reported.

Gold rose as the dollar retreated slightly, as investors will continue to bank on the greenback with Treasury yields rising.

The market was looking through the short-term disappointment in the employment report, said Tom Hayes, chairman and managing member at hedge fund Great Hill Capital LLC in New York.

“It’s very hard to get too pessimistic about downward revisions when you have three tailwinds at your back, namely the stimulus, the vaccinations and (declining coronavirus) cases, and earnings,” Hayes said.

Job losses are still concentrated in retail, leisure and hospitality, and healthcare, particularly in healthcare and nursing homes, “so this is all COVID-related issues,” he said.

As more people get vaccinated, jobs will come back, which is driving investor sentiment, Hayes said.

Take Five: Dollar signs

The Nasdaq and S&P 500 also hit new highs as stronger-than-expected corporate results in the fourth quarter and companies on track to post earnings growth for the first quarter instead of a decline also have boosted sentiment.

The Dow Jones Industrial Average rose 0.3%, the Nasdaq Composite added 0.57% and the S&P 500 gained 0.39%, led by Amazon.com Inc and Google-parent Alphabet Inc.

Those two companies, along with Apple Inc, Microsoft Corp, Tesla and Facebook Inc, are the top six components of MSCI’s all-country world index.

In Europe, stocks closed little changed at the end of an upbeat week where sentiment cooled on the disappointing U.S. jobs data and declining German industrial orders. Germany’s export-oriented DAX index slipped 0.03%, but France’s CAC 40 rose 0.9% to close at a two-week high.

German Economy Ministry data showed domestic orders fell by 0.9% in December, while orders from abroad decreased by 2.6%. Contracts from the euro zone tumbled by 7.5%.

Europe’s broad STOXX 600 posted its best weekly performance since November, rising 3.5%, despite a lackluster session on Friday.

Despite trending lower against the euro and Japanese yen, the dollar headed for its best weekly gain in three months. The U.S. dollar index traded near a two-month high, up 0.57% for the week, but down nearly as much on the day.

The euro was up 0.73% to $1.2049, while the yen strengthened 0.18% versus the greenback at 105.36 per dollar.

Oil hit its highest level in a year, above $59 a barrel, supported by hopes of a quicker economic revival and supply curbs by the Organization of the Petroleum Exporting Countries and its producer allies.

Brent crude futures rose 50 cents to settle at $59.34 a barrel. U.S. crude futures settled up 62 cents at $56.85 a barrel.

U.S. gold futures settled up 1.2% at $1,813 an ounce.

Government bond investors see an uptick in inflation after the unemployment report. Breakeven rates on 10-year Treasury Inflation-Protected Securities (TIPS), which measure average annual inflation expectations for the coming decade, jumped to 2.197%, the highest level since May 2018.

The 10-year U.S. Treasury note rose 3.5 basis point to 1.1704%, ending the session at its highest market yield since March.

The net read from the unemployment report is that it supports a steeper yield curve, said Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC in New York.

“The big thing is the curve,” he said.

Bond yields rose in Europe as well, with Germany’s 30-year government bond yield climbing back into positive territory for the first time since September.

MSCI’s gauge of Asian shares outside Japan rose 0.66%, while Japan’s Nikkei rallied 1.5%.

Oil rises 1%, hits highest in a year on growth hopes, OPEC+ output cuts

NEW YORK (Reuters) - Oil prices rose about 1% on Friday, after hitting their highest in a year and closing in on $60 a barrel, supported by economic revival hopes and supply curbs by producer group OPEC and its allies.

Oil was also supported as U.S. stock markets hit record highs on signs of progress toward more economic stimulus, while a U.S. jobs report confirmed the labor market was stabilizing.

Brent crude ended the session up 50 cents, or 0.9%, at $59.34 after hitting its highest since Feb. 20 at $59.79. U.S. crude settled up 62 cents, or 1.1%, at $56.85, after reaching $57.29, its highest since Jan. 22 last year.

U.S. crude futures gained about 9% this week, the biggest percentage gain since October, in part due to U.S. inventories last week dropping to levels last seen in March. [EIA/S]

Brent rose about 6% for the week.

“Brent is eyeing the $60 level now that OPEC+ has successfully eased most supply side concerns and optimism on the COVID front improves globally,” said Edward Moya, senior market analyst at OANDA in New York.

“The fundamentals remain solid for crude, but a consolidation seems likely given the recent runup.”

The last time Brent traded at $60 a barrel, the pandemic had yet to take hold, economies were open and demand for fuel was much higher.

The rollout of COVID-19 vaccines has fed hopes of demand growth, but even optimists, such as the Organization of the Petroleum Exporting Countries which expects a market deficit throughout 2021, do not expect oil consumption to return to pre-pandemic levels until 2022.

“What is really helping the market today, and is a more valid reason for the price rise we see, once again comes from Saudi Arabia and its top firm, Aramco,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen.

Aramco raised its Arab Light official selling price (OSP) to Northwest Europe for March by $1.40 a barrel from the previous month. This could signal Saudi Arabia is more confident in the demand outlook, feeding bullish sentiment, Tonhaugen said.

OPEC and allies, collectively known as OPEC+, stuck to their supply tightening policy at a meeting on Wednesday. Record OPEC+ cuts have helped lift prices from historic lows last year.

“OPEC+ discipline has been a real positive,” said Michael McCarthy, chief market strategist at CMC Markets.

The U.S. oil rig count, an early indicator of future output, has risen for five straight months. This week, the number of rigs rose by four to 299, the highest since May, according to energy services firm Baker Hughes Co. [RIG/U]

The pace of recovery in the world’s top producer, however, is slow. The government this week projected U.S. crude output will not to top its 2019 record of 12.25 million barrels per day until 2023. Production in 2020 tumbled 6.4% to 11.47 million bpd.

Africa: U.S. President Biden Strikes New Tone in Relations With Africa

Cape Town — President Joe Biden has struck a new tone in U.S.-Africa relations, recording a video message which promotes a "shared vision" of more trade and investment, peace and security for all Africans, a commitment to democratic institutions and the promotion of human rights for all, including women and girls and the gay community.

In a message sent to participants in the African Union Summit, being held virtually, the U.S. president also called for more investment in global health and defeating Covid-19, and pledged to partner with the AU's Africa Centres for Disease Control and Prevention (African CDC).

On climate change, he stressed the importance of ensuring that developing nations can mitigate and adapt to its impact.

The sending of a personal message and its contents mark a sharp divergence from the approach of former president Donald Trump.

Biden said the U.S. wanted to partner with Africa "in solidarity, support and mutual respect." He added: "We believe in the nations of Africa, in the continent-wide spirit of entrepreneurship and innovation."

Ethiopia: Ministry Needs 3-Trillion Birr for Infrastructural Dev'tministry Needs 3-Trillion Birr for Infrastructural Dev't

Minister of Transport disclosed that some three trillion Birr investment is required for the realization of transport sector 10-year development plan.

Speaking during 'Policy Matters' interview series', Transport Minister Dagmawit Moges stated that huge finance is required for a joint venture and active participation of foreign investors and private sector as the sole effort of the government doesn't suffice to achieve the plan in the transport sector.

Infrastructure development is the major shift that has to be realized in 10 year-development plan apart from creating access to address quality issues, which is an element of SDGs, it was learnt.

In due course of running towards attaining the ten-year development plan, international standards that have been set for infrastructure development like constructions of roads, railway lines, inland and aviation sectors into consideration, she said.

The Minister said, "We have identified 20 projects within a semi-annual performance, but many more projects will be singled out in the future. We will also have different platforms where we will be able to introduce projects, which could be buttressed in the form of Public-private partnership incorporating foreign investors, too, according to the Minister.

The transport sector is enabler in its nature. Hence, the ministry has planned in association with various ministries and institutions because 30 to 40 percent is all about mobility in urban centers.

Such moves are instrumental in supporting the entire national economy in due process of supplying logistics in the years to come as the plan is designed in such away.

"We are preparing a 30-year transport master plan, which is expected to be wrapped up in the coming few months. Besides, the master plan is believed to enhance integration of actions in all modes of transportation."

"The volume of import and export is significantly increasing from time to time; even this year, we have a plan to make an import and export of nearly 17 million metric ton of produces, which is huge in number to create coordination among different stakeholders," she said.

She further said, if the logistics system is made more efficient, the country can be a hub for the neighboring African countries and get advantage of creating employment opportunities via enhancing services and other related accompanies," she underlined.-Ethiopian Herald.

Zambia Ban On Car, Grocery Exports Via Vic Falls Border

Victoria Falls — Zambia's Revenue Authority (ZRA) has announced it will ban exportation of a cocktail of goods including vehicles, household items and groceries through Victoria Falls Border starting on 1 March.

The decision by the neighbouring country is expected to hit hard especially on Victoria Falls residents who before the lockdown relied on buying groceries, electrical gadgets, second-hand clothes (salaula) among other things from Livingstone, Zambia.

Clearing agents based in Victoria Falls are also fretting over the drastic policy measure as there will be no more imported vehicles entering Zimbabwe through Victoria Falls border.

Residents and Zambian hawkers also used to cross the border to buy or sell various goods without any restrictions.

In a statement, ZRA released restriction of points of exit for exportation of selected commercial goods by road.

It said 16 categories of goods listed in the seventh schedule to Statutory Instrument 115 of 2020 (Customs and Excise Ports of Entry and Routes) which came into effect on 1 January 2021, will not be allowed to leave that country through Victoria Falls border by any other mode of transport other than rail.

Goods carried by rail go through thorough check at departure and in transit unlike those by road where many are smuggled.

"This notice serves to inform all customs clearing agents and exporters wishing to export goods listed in the seventh schedule to Statutory Instrument 115 of 2020 that they should effect the exportation of their goods through the customs ports and aerodromes set out in the eighth schedule to the attached Statutory Instrument 115 of 2020.

"Further, note that goods for export through Victoria Falls border post shall only be transported by rail only effective the 1st of March 2021," read the SI.

The SI specifies that goods to listed under SI 115/2020 are edible oils, bulk fuels, oils and other hydrocarbon oils, tobacco and tobacco products, motor vehicles, alcoholic beverages and non-alcoholic beverages.

Electrical goods such as TV sets, radios, refrigerators, air conditioners, bulbs, cables, computers and other electronics, as well as used clothing and shoes, tyres, furniture, batteries, hardware, floor and wall tiles, pipes, bath tubs, toilet pans and timber add to the list.

Maize meal and other maize products, wheat flour, groceries, sweets, biscuits, soups and canned foods, bakery and bread, meat and sea food, snacks and crackers, cereals and other breakfast foods, pasta and rice, milk powder and other dairy products, oils, sauces, salad dressing and condiments complete the list.

Victoria Falls is one of the many borders including Chirundu which Zambia and Zambia share.

The listed goods will now be expected to go via Kazungula border.

Amos Mateyu, a clearing agent in Victoria Falls said the development will put many of them out of business.

"Tough times are coming and our town will be dead soon," he said.

The Zambian taxman has been at loggerheads with clearing agents in the neighbouring country, and last December, 34 were suspended over a transit fraud scheme amounting to K96 313 164 following removals in transit and forgery offences, according to the country's media.-New Zimbabwe.

Nigeria: CBN Hammers Cryptocurrency Traders, Directs Banks to Close Their Accounts

The Central Bank of Nigeria yesterday directed banks and other financial institutions to immediately close any accounts dealing in cryptocurrency or facilitating payment for crypto currency exchange, with immediate effect.

A cryptocurrency (or crypto) is a digital unregulated currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions. Much of the interest in the currency, not backed by any government, is to trade for profit, with speculators at times driving prices skyward.

The banking regulatory authorities directed banks to expose any individual and entity running such accounts, warning that failure to adhere to the directives would attract strict sanctions.

The apex bank, in its circular on the issue cautioned deposit money banks, (DMBs) non-bank financial institutions (NBFIs) and other financial institutions (OFIs) and members of the public on the risk associated with transactions in cryptocurrency.

The circular was signed by the Director of Banking Supervision, Bello Hassan and the Director of Payments System Management Department, Musa Jimoh.

Rewane: Prohibition of Cryptocurrency Not Ideal

But a leading financial analyst and Managing Director, Financial Derivatives Limited, Mr. Bismarck Rewane expressed reservations at the prohibition of cryptocurrency by the apex bank.

He said rather than outright prohibition, the CBN should have concentrated on regulation of the means of exchange which it started in 2017.

According to him, "In 2017, the CBN raised the alarm and warned that anybody that engaged in cryptocurrency and got his hands burnt would be on his own. The best thing is to regulate it, put it under a rule that will stipulate the number of people that can participate. A lot of people do not understand it, they will just lose money. So, there are two elements, one is to regulate the market, to protect the investors through capital requirement and the other is to prohibit it'.

"Cryptocurrency is being used as a store of value and also to use it as a medium of exchange and for trade, so it's parts of the characteristics of money.

It needs to be studied carefully and controlled not prohibited.

"What CBN should do is to regulate the players and the number of people who can access the service because many people don't understand the system and they may become vulnerable. This regulation can be in form of stipulated capital requirement or minimum threshold which will discourage some people with bad intention," he suggested.

Johnson Chukwu: It's a Contradiction

In his response, Chairman, Cowry Asset Management Limited, Mr. Johnson Chukwu said there is need for the CBN to let the public know if it has privileged information about the dangers of the digital means of exchange.

He recalled that the Nigerian Communications Commission (NCC) had rolled out regulations of digital money in 2020, wondering why the apex bank decided to prohibit the use of such means of transaction.

He said, "The CBN, in its circular did not specify their motivation. They talked about Financial System Stability which was done about three years ago where they warned that cryptocurrency is injurious and could be used for financing of fraud and terrorist activities.

However, beyond that, CBN could have genuine concerns that there is a large pool of currencies outside the banking industry and outside its purview and therefore could be an avenue for the financing of terrorising and drugs activities.

"If the CBN has proofs that it's being used for nefarious activities then it should make it known to the public," Chukwu said.

The Federal Government had few years ago expressed reservations about the growing popularity of cryptocurrency, warning that criminal elements may use it as a means of perpetrating fraudulent acts in the country.

Speaking at a seminar with the theme, "Understanding the Interface Between Crypto-Currency and Money Laundering in Abuja, in 2018, the Governor of Central Bank, Mr. Godwin Emefiele said as the global use of cryptocurrency with the associated inherent risks continue to gather momentum, the need for legislative frameworks to address the challenges became imperative.

He challenged financial institutions to prepare and protect themselves against both direct and indirect vulnerabilities, pointing out that there is need to understand the Money Laundering/Terrorist Financing risks as well as the inherent risks associated with virtual currency and attack vectors.

According to Emefiele, "It is evident that criminals have already adapted their attacks to include vulnerable platforms wherever and when the opportunity manifests itself. Risks associated with the use of virtual currency and exchange would need to be nipped in the bud if the safety and soundness of the financial system are to be sustained."

Lending his voice to the warning against the adoption of cryptocurrency, Chairman, Presidential Committee Against Corruption, Prof. Itsay Sagay, who was also at the seminar said while cryptocurrency yields benefits to those providing the service or trading with it.

He added: "It was like a 'stateless phenomenon' that poses challenges. There is a dark side, which includes the use of cryptocurrency for criminal activities."

The almost invisible and decentralised nature of virtual currencies, he emphasised, creates a potential for them to be used for money laundering and terrorist financing.-This Day.

Nigeria: FG Suspends Emirates Airlines Over Covid-19 Violation

Lagos — The Nigeria Civil Aviation Authority (NCAA) has banned Emirates Airlines' operations in Nigeria for violating COVID-19 protocols.

The ban was in compliance with the directive of the Presidential Taskforce on COVID-19, it was learnt.

Director-General of the NCAA, Capt. Musa Nuhu announced the ban in a letter to the airline dated February 4, 2021.

The letter was copied to the Chairman PTF, Ministers of Aviation and Health; National Coordinator of PTF, Director-General, UAE, General Civil Aviation Authority, MD NAMA and MD FAAN.

Why the ban?

The NCAA said the ban was necessitated by the continued airlift of passengers from Nigeria using the Rapid Antigen Tests (RDT) conducted by laboratories that are "neither approved nor authorized by the appropriate regulatory."

This, according to the apex aviation regulatory authority is in flagrant violation of the Presidential Task Force on Covid-19 directive.

"This is a violation of paragraph 5 of the NCAA letter with REF: NCAA/DG/AIR11/16/281 of 02 February 2021 addressed to your good self. The paragraph clearly states, "Based on the forgoing and to enable the Nigerian government to put in place the needed infrastructure and logistics for COVID-19 RDT testing for departing passengers, the PTF has directed that Emirates Airlines should either accept passengers without RDT pending when the infrastructure and logistics are put in place or suspend its flights to and from Nigeria until such a time when the required infrastructure and logistics are fully established and implemented".

The DG added that the airline has not been in compliance with the two options given by the PTF as records of operated flights by Emirates Airlines from Lagos and Abuja obtained from the Nigerian Airspace Management Agency (NAMA) has shown.

It listed the Emirates flights and date of operations as obtained from NAMA to include: Flight: UAE784 (Lagos-Dubai) with 195 passengers on board and UAE786 (Abuja-Dubai) with 154 on board operated on 03 February 2021.

Also Flight UAE784 (Lagos-Dubai) with 199 passengers on board and Flight UAE786 (Abuja-Dubai) with 175 passengers on board.

"This is in addition to an advert by Emirates airlines for RDT by the Travel clinic and medical Mobile Laboratory in Lagos and Abuja, two organizations that are not approved by the regulatory bodies and PTF to conduct RDT for departing passengers," added the letter.

According to the DG, the PTF takes these violations of its instructions seriously and as therefore directed that "Emirates should suspend its operations to Nigeria (Lagos and Abuja) effective 72 hours from midnight (2300z) on Thursday 04 February, 2021".

"During the 72 hours leeway, Emirates airlines is only authorized to bring in passengers into Nigeria while outbound passengers are not allowed".

"The Nigeria Civil Aviation Authority will impose additional sanctions on Emirates airlines for the violations of the PTF directive and COVID-19 Protocols".

"Emirates Airlines will be informed in due time as when to resume operations to Nigeria," the letter added.

Daily Trust reports that the suspension came three days after the Airlines banned transit flights with Nigerian passengers on board from coming to the UAE which automatically barred other airlines from carrying Nigerian passengers.

'Protocols disturbing'

President of NANTA, Mrs. Susan Akporiaye had said the protocols could "put additional financial pressures" on passengers while expressing shock over the protocol from the Dubai Airport Authority, requesting that Nigerian passengers undergo a rapid response COVID-19 antigen test before departure to Dubai is disturbing.

The rapid response antigen test, she noted, can only be done in Lagos and Abuja with Dubai bound passengers from the two Nigerian cities, paying 36, 800 naira and 25, 800 naira respectively, in addition to the PCR test from approved laboratories by Nigerian Center for Disease Control (NCDC) and the Presidential Task force.- Daily Trust.

Nigeria: Ben Bruce, Other Nigerians React As CBN Bans Crypto Trading

The former senator representing Bayelsa east, Senator Ben Murray-Bruce and other Nigerians have reacted to the purported ban of cryptocurrency trading by the Central Bank of Nigeria (CBN).

In a circular dated 5th February 2021, the Central Bank of Nigeria notified Deposit Money Banks, Non-Financial Institutions, other financial institutions against doing business in Crypto and other digital assets.

The apex bank also directed financial institutions to close the accounts of persons or entities transacting in or operating cryptocurrency exchanges.

The Apex bank further warned the Nigerian Financial Stakeholders that any breach of this directive will attract serious regulatory sanctions.

"The Central of Bank of Nigeria's (CBN) circular of January 12, 2017 ref FPR1DIR/GEN/C1R106/010 which cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFIs) and members of the pubic on the risk associated with transactions in cryptocurrency refers."

"Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited."

"Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately."

"Please note that breaches of this directive will attract severe regulatory sanctions. This letter is with immediate effect."

However, many Nigerian's including the former lawmaker condemned the move saying it was ill-informed.

I thought it's universal knowledge that decisions or policy regarding finance or economy should never be hasty? #crypto

-- Ben Murray-Bruce (@benmurraybruce) February 5, 2021

If the ban on crypto by CBN is true ehn, it points yet again to the ill informed, backward, poverty promoting dinosaurs 🦖 leading us. Use your time ⌚ to investigate and close accounts sponsoring terrorists in the country if you don't know what to do!!! GAWD 🤦🏾‍♂️#endsars 🚶🏾‍♂️

-- Dj Switch (@dj_switchaholic) February 5, 2021

Welcome to a country where our government Bans Crypto and Pardon Terrorists

-- Roviel 😏 (@ObongRoviel) February 5, 2021

Omoh, 2 years now Crypto have been everything, paid my final year school fees, paid my rent, did my school project, got a good Android phone, all because of trading cryptocurrencies. Nigeria don't like anything giving us hope to keep living. #WeWantOurCryptoBack

-- I AM CODED ♥️ + 💡 (@CodedUpdate) February 5, 2021

It would be recalled that the CBN had in 2018 declared that cryptocurrencies are not a legal tender in Nigeria.

The apex bank said in the circular that "cryptocurrencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc and Exchanges such as NairaEx are not licensed or regulated by the CBN."-Daily Trust.

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