Africa Press-Nigeria:<\/p>\n
Despite the uncertainties in economy due to the impact of the COVID-19, Coronation Merchant Bank Limited remains optimistic about investment opportunities in the country.<\/p>\n
This was disclosed by a team of analysts at a breakfast session tagged: \u201cDiscovering the New Normal: Impact of COVID-19 and Collapse of Oil Prices,\u201d that was organised by the bank recently in Lagos.<\/p>\n
The forum which held online, had in attendance business executives from various sectors of the economy.<\/p>\n
In his opening remarks, the Managing Director of the bank, Banjo Adegbohungbe stated that: \u201cThere is a new reality that has enveloped the whole world and Nigeria is not immune to these changes.<\/p>\n
\u201cThese are very uncertain times and our intention is to provide clarity. We believe this is the most critical thing organisations need to navigate their path forward in this unchartered terrain.\u201d<\/p>\n
Also, the Head, Research, Coronation Asset Management, Guy Czartoryski, analysed the shifts in economic power that the COVID-19 pandemic and the fall in oil prices have brought to the world and outlined what Nigerian companies needed to do about them.<\/p>\n
Commenting on the impact of the twin crises of COVID-19 and low oil prices on the Nigerian economy, he said: \u201cAlthough there are many uncertainties around the spread of the disease, one asset Nigeria has is its youth, with 93 per cent of its population under the age of 55 and 62 per cent under 25.<\/p>\n
\u201cIt appears that the disease strikes hardest those who are elderly and with pre-existing medical conditions.<\/p>\n
\u201cOil prices are rallying at the moment, with Brent crude up to $35.0\/bbl from its lows of under $20.0\/bbl in early April. However, there is no certainty about oil prices later this year, and we know that the nation\u2019s finances work best when Brent crude is trading over $50.0\/bbl.<\/p>\n
\u201cSo, it is prudent to think about how to conduct business during a period of prolonged low oil prices, just in case oil prices do not reach $50.0\/bbl soon.\u201d<\/p>\n
Also speaking about how businesses could hedge exchange risk in the current business environment, the treasurer of the bank, Iyobosa Sorae, said: \u201cBusinesses can go into a bi-lateral forward agreement with either a bank or an exporter to close forward transaction.<\/p>\n
\u201cThis way, they can mitigate their exchange rate risk by agreeing on a forward rate and settling against that rate on a pre-determined date.<\/p>\n
\u201cIn addition to this, the Central Bank of Nigeria has worked so hard, especially when you consider the NDF platform that has been put in place for the market.<\/p>\n
\u201cAll of this was to take into consideration, ways by which we can mitigate exchange rate risk when FDIs and corporates inflow their funds into the country.<\/p>\n
\u201cSo, what we have seen is that the window \u2013 in terms of the maturity bucket \u2013 for the NDF transactions has been extended further to about five years for loans and FDIs while import related transactions have been extended to about thirteen months.\u201d<\/p>\n
The Chief Risk Officer of the bank, Magnus Nnoka, explained that, \u201cHistorically, there has always been a new normal after every pandemic. To make it to this new normal, institutions will have to pass through two phases.<\/p>\n
\u201cFirst is the immediate phase \u2013 which is what most businesses have gone through \u2013 which speaks to the risk managers attitude and the actions they have put in place to cope with the pandemic thus far.<\/p>\n
\u201cFor the next phase, institutions are expected to continuously reappraise their business continuity actions as well as the stress test carried out so as to ensure it is appropriate for the current mode in which the business is operating.<\/p>\n
\u201cMore importantly, organisations need to begin to align their risk management practices to business objectives as well as identify new opportunities in the current situation.\u201d<\/p>\n
On his part, the Group Head, Corporate Banking, Demola Adekoya, said the pandemic, \u201cpresents an opportunity for us to further enlighten our clients as to how they can navigate these uncertain times.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Africa Press-Nigeria: Despite the uncertainties in economy due to the impact of the COVID-19, Coronation Merchant Bank Limited remains optimistic about investment opportunities in the country. This was disclosed by a team of analysts at a breakfast session tagged: \u201cDiscovering the New Normal: Impact of COVID-19 and Collapse of Oil Prices,\u201d that was organised by […]<\/p>\n","protected":false},"author":62,"featured_media":23045,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,30],"tags":[1488,906],"class_list":["post-25751","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-community","tag-covid19","tag-economic-advisory"],"yoast_head":"\n