JUST IN: America’s JP Morgan removed NIGERIA from Emerging Market, Blacklist from Foreign Investors … country out of ‘overweight’ category due to fiscal woes amid a worsening global risk, replaced Nigeria in list with Serbia and Uzbekistan * Claims ‘shady deal’ in Nigerian National Petroleum Corporation non-transfer of any revenue to the government from January to March this year caused market panic *Bank analysts bank revealed Emerging Markets Bond Index Global Diversified index dropped 16% this year, most losses come from rates of $4 billion in net outflows from emerging markets since mid-April *BY BISOLA EWEWYEMI/FINANCE Editor, New York, GEORGE ELIJAH OTUMU/AMERICAN Senior Investigative Editor & AHMED NURUDEEN/BUSINESS Reporter, Abuja
Written by EDITOR-IN-CHIEF | May 13, 2022 | 0
JUST IN:
America’s JP Morgan removed NIGERIA from Emerging Market, Blacklist from Foreign Investors
… country out of ‘overweight’ category due to fiscal woes amid a worsening global risk, replaced Nigeria in list with Serbia and Uzbekistan
* Claims ‘shady deal’ in Nigerian National Petroleum Corporation non-transfer of any revenue to the government from January to March this year caused market panic
*Bank analysts bank revealed Emerging Markets Bond Index Global Diversified index dropped 16% this year, most losses come from rates of $4 billion in net outflows from emerging markets since mid-April
*BY BISOLA EWEYEMI/FINANCE Editor, New York, GEORGE ELIJAH OTUMU/AMERICAN Senior Investigative Editor & AHMED NURUDEEN/BUSINESS Reporter, Abuja
NIGERIA, Africa’s most populous black nation is in the news for the wrong reasons. America’s JP Morgan has removed the nation from Emerging Market classification, placed country on blacklist to foreign investors; replaced by Serbia and Uzbekistan over the non-transparent deal within the country’s oil sector, Nigerian National Petroleum Corporation, NNPC, such that no revenue was paid to the coffers of Nigeria from January to March this year. This caused panic in the global market.
JPMorgan removed Nigeria from its list of emerging market sovereign recommendations that investors should be ‘overweight’ in, saying the country had not taken advantage of high oil prices.
Analysts use overweight and underweight to broadcast recommendations on buying or avoiding stocks of certain sectors. Analysts attach an overweight recommendation to a stock that they believe will outperform its sector in the near future.
According to Reuters, the bank analysts said NNPC did not transfer any revenue to the government from January to March this year due to petrol subsidies and low oil production.
The bank further added that it moved Nigeria out of the ‘overweight’ category due to its fiscal woes amid a worsening global risk backdrop that has raised market concerns despite a positive oil environment.
On the other hand, JPMorgan replaced Nigeria in the list with Serbia and Uzbekistan in the ‘overweight’ category. According to Reuters, JPMorgan included Serbia in the category due to the country’s high reserves and a fiscally cautious government. At the same time, Uzbekistan was added to the category due to the country’s relatively low debt despite Russian exposure.
The bank analysts also revealed that the Emerging Markets Bond Index Global Diversified, EMBIGD, index had dropped 16% this year, “with most of the losses having come from rates” and $4 billion in net outflows from emerging markets since mid-April.
They noted that riskier sovereign yields were now 10.6%, the highest level since the first wave of the coronavirus pandemic in April 2020, reducing market access and increasing the risk of debt defaults.
