Sub-Saharan Africa Requires $40bn Annually For Energy Transition Plans- Osinbajo

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Sub-Saharan Africa Requires $40bn Annually For Energy Transition Plans- Osinbajo

Vice President Yemi Osinbajo says Sub-Saharan Africa will require an annual investment of $40 billion to implement a robust energy transition plan.

According to NAN, Osinbajo stated this in his keynote speech at the virtual 7th Annual New York-based Columbia University Global Energy Summit organized by the Columbia Centre on Global Energy Policy on Tuesday in Abuja.

He said, “Therefore, a just, equitable, and inclusive global energy transition especially for developing economies is imperative. The global energy transition must be inclusive, equitable, and just, taking into account the different realities of various economies and accommodating various pathways to net-zero by 2050.

“Nigeria and countries across Africa are committed to a net-zero future, especially given their vulnerability to the adverse effects of climate change,” explained Mr Osinbajo.

He pointed out that the countries had expressed commitment to their national development contributions under the Paris Agreement, though greater support in developing and implementing robust energy transition plans is needed.

“Clearly, the continent will require an unprecedented scale of investments.

“An energy mix compatible with a 1.5°C pathway would require 40 billion dollars to flow into sub-Saharan Africa annually, a fourfold increase compared to the $10 billion invested in 2018,” added the vice president.

The vice president explained that a just energy transition for developing economies was central to the right to sustainable development and poverty eradication as enshrined in relevant global treaties, including the Paris Agreement.

“It means building sustainability into our economic planning. So, we have developed an Economic Sustainability Plan, which includes our flagship ‘Solar Power Naija’ programme aiming to electrify five million households and 25 million people by 2023 leveraging solar mini-grids and stand-alone systems.

“We believe in the potential of off-grid renewables to close the energy deficit in Nigeria and across Africa,” he said.

OFI Completes Acquisition Of Olde Thompson At An Enterprise Value (EV) Of $950 Million

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OFI Completes Acquisition Of Olde Thompson At An Enterprise Value (EV) Of $950 Million

Olam Food Ingredients (“OFI”)1 is pleased to announce that the acquisition of leading US private-label spices and seasonings manufacturer Olde Thompson, previously announced on April 29, 2021, was successfully completed on May 17, 2021, at an EV of US$950 million. 

The acquisition builds on a 15-year partnership with Olde Thompson and marks a significant milestone for OFI’s spices business, which is an attractive and growing part of OFI’s overall portfolio.

It also expands OFI’s private label capabilities and enables the business to provide consumers with a comprehensive range of bold, authentic, natural tastes and flavours with end-to-end traceability and sustainability.

OFI CEO A. Shekhar said: “The acquisition of Olde Thompson is transformative for our spices business and helps us to broaden our private label offering which is an important part of our growth strategy.

“Combining the complementary capabilities of OFI’s global origination and sustainable spice supply chain with Olde Thompson’s customer base and expertise in blending and product formulation will help us deliver greater value to all our retail customers.

We are looking forward to welcoming our new colleagues and working closely with them to ensure that consumers can add healthy taste and flavour to all the products they love.”

The acquisition of Olde Thompson is expected to be earnings and margin accretive to OFI from the first year onwards and generate potential EBITDA synergies of US$25-30 million.

Notes to Editors 

This release should be read and understood only in conjunction with the full text of the announcement and presentation on this transaction lodged on SGXNET by Olam International Limited on April 29, 2021.

1 Olam Food Ingredients (OFI) is a new operating group born out of Olam International Limited. OFI offers sustainable, natural, value-added food and beverage ingredients and solutions so that consumers can enjoy the healthy and indulgent products they love. It consists of Olam’s industry-leading businesses of Cocoa, Coffee, Nuts, Spices and Dairy.

OFI has built a unique global value chain presence including its own farms, farm-gate origination and manufacturing facilities. OFI partners with customers, leveraging its complementary and differentiated portfolio of “on-trend” food and beverage products, to co-create solutions that anticipate and meet changing consumer preferences as demand increases for healthier food that’s traceable and sustainable.

Atalanta Take On Juventus In Coppa Italia Final On Startimes

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Atalanta Take On Juventus In Coppa Italia Final On Startimes

The Coppa Italia Final will see Atalanta take on Juventus on Wednesday 19 May live and in HD on StarTimes. 

It is the last opportunity for Cristiano Ronaldo to win a trophy this season. But it won’t be easy against Atalanta that sealed their spot in the Champions League for a third consecutive season.

Football fans will be able to see the final of the exciting competition live and exclusive on the StarTimes. Next month, StarTimes will air UEFA Euro 2020 live and in HD.

Juventus’ fans have been spoilt for a long time. The last time La Vecchia Signora failed to win a trophy was in 2011. Since then, Juventus have won the Scudetto nine times in a row. They have also added a few Coppa Italia titles during that time.

Victory for Juventus would also see star striker Cristiano Ronaldo emulate the success he had in Spain and England, where he won both league and cup competitions with Real Madrid and Manchester United respectively.

The Portuguese international is, of course, not the only star in a star-studded Juventus side, with defender Danilo and attacking players Federico Chiesa, Paulo Dybala and Álvaro Morata amongst the other stand-out players.

The final could be the farewell game for 43-year-old goalkeeper Gianluigi Buffon, who has announced that he will be leaving Juventus at the end of the season after having played for the club since 2001, with just a one-year break in France.

While Juventus have won the Coppa 13 times, victory on Wednesday for Atalanta would be just the second time they land the trophy, with the first triumph dating back to 1963.

What do players need to gamble on slots online?

Esan Bolaji
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What do players need to gamble on slots online?

Gambling is a pretty huge business these days, and it has been for a rather long time too. You see, humans have been gambling in some shape or form for the last several thousand years, and over time it has become clear that there is a hell of a lot of money out there to be made from this too.

The Venetians were the first to truly have a go at commercialising the gambling world, building the world’s first state-regulated casino back in the 17th century. 

That was several hundred years ago of course, and by now there are an almost infinite amount of ways in which people have sought to make money from the gambling world. In fact, may we remind you of the incredible success of the online slot industry, for example?

Gambling via slots online is without a doubt the most popular way to gamble in the 21st century. It got us thinking, what do players need to gamble on Wizard Slots online? Keep reading to find out! 

The slots online checklist 

Each and every day there are at least thousands of new gamblers joining the online slots world, and for these beginners, it may be quite a confusing place at first. Don’t you worry though, because we are on hand to help here? Let’s take a look at an online slots checklist, where you can see exactly what you will need to gamble on slots online: 

  • Bankroll: You cannot gamble without money! A healthy bankroll is No. 1 on the slots online checklist. Furthermore, just having a bankroll isn’t enough either, because you will also need to set a strict budget on your playing.
  • Internet connection: This is a bit of a brainer of course, but without a decent Internet connection there is no way you will be able to play slots online.
  • Online casino: Finding an online casino to play slots on is another essential thing on the slots online checklist. Make sure the platform you choose has a great selection of slots, is licensed by the UK Gambling Commission, and also comes complete with some tantalizing deposit bonuses.
  • Time: Obviously you are going to need the time to play all of these exciting online slot games, so make sure you do! And also make sure you aren’t neglecting more important stuff like work or family time.

How to make the most out of your online slot gambling experience 

It is all well and good knowing what you need in your slots online checklist to start gambling, however, something that is ultimately even more important is knowing how to make the most out of your online slot gambling experience.

Here are a few ways to make sure you are doing exactly that: 

  • Pick the best online casino site: You need to make sure you are definitely choosing the best online casino site, otherwise, you could be missing out on things like deposit bonuses and the best new slots.
  • Choose slots with high RTPs: High RTP slots are more likely to pay out, so it is a no brainer to choose these as much as you can.

FMDQ Exchange Admits Series 12, 13 and 14 Nigerian Breweries PLC CPs on its Platform

Esan Bolaji
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FMDQ Exchange Admits Series 12, 13 and 14 Nigerian Breweries PLC CPs on its Platform

Corporate institutions continue to successfully tap the Nigerian debt capital markets (DCM) to access stable short, medium and long-term finance to fund key activities in their organisations. The commercial paper (CP) market has shown resilience by providing issuers with a sustained opportunity to grow their businesses, whilst contributing to the overall growth of the Nigerian economy.

In this regard, FMDQ Securities Exchange Limited (FMDQ Exchange) is pleased to announce the approval for the quotation of the Nigerian Breweries PLC ₦1.05 billion Series 12, ₦0.94 billion Series 13, and ₦2.67 billion Series 14 Commercial Papers (CPs) under its ₦100.00 billion Commercial Paper Issuance Programme on its platform.

This brings the total CPs series issued by the issuer, since the renewal of its ₦100.00 billion CP Programme in 2019, to ₦156.20 billion, with a total of ₦14.76 billion currently active.

In a statement provided by the Finance Director, Nigerian Breweries PLC, Mr. Rob Kleinjan, he said,

“Nigerian Breweries PLC is delighted to announce the quotation of series 12 – 14 CP issuances under its ₦100.00 billion CP Issuance Programme. We are pleased with the continuous opportunity to access an alternative source of funding to meet our short-term working capital needs.”

Also, the co-sponsors to the issue and Registration Member (Quotations) on FMDQ Exchange – FBNQuest Merchant Bank Limited, FCMB Capital Markets Limited and Stanbic IBTC Capital Limited, through the Head, Capital Markets, FBNQuest Merchant Bank Limited, Mr. Oluseun Olatidoye stated that

“the co-sponsors are delighted about the quotation of Nigerian Breweries PLC series 12 – 14 CP issuance under the ₦100.00 billion programme. The funds raised will be utilised to meet the working capital needs of Nigerian Breweries PLC, and FBNQuest Merchant Bank is pleased with its role in further deepening the domestic debt markets”. 

The quotation of this and other CPs on the Exchange’s platform validates its conscious drive to support the goals of corporate businesses and to deepen the Nigerian financial markets. FMDQ Exchange is committed to powering the growth of the Nigerian DCM by steadfastly availing its efficient and value-adding platform for the registration, listing, quotation and trading of securities. 

FMDQ Group is Africa’s first vertically integrated financial market infrastructure (FMI) group providing a one-stop platform for the seamless and cost-efficient execution, risk management, clearing, settlement and depository services, as well as data and information services across the debt capital, foreign exchange and derivatives markets in Nigeria, through its subsidiaries, FMDQ Exchange, FMDQ Clear Limited and FMDQ Depository Limited.

Philip Morris International Inc Presents At The 2021 Goldman Sachs Global Staples Forum

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Philip Morris International Inc Presents At The 2021 Goldman Sachs Global Staples Forum

Philip Morris International Inc.’s Chief Executive Officer, Jacek Olczak, addresses investors today at the Goldman Sachs Global Staples Forum.

The presentation and Q&A session will be conducted in a virtual format, beginning at approximately 9:40 a.m. Eastern Time.

A live video webcast of the entire PMI session will be available, in a listen-only mode, at www.pmi.com/2021goldmansachs. Presentation slides will be available at www.pmi.com/investors.

An archived copy of the webcast will be available at www.pmi.com/2021goldmansachs  until Wednesday, June 16, 2021.

The archived webcast can also be accessed on iOS or Android devices by downloading PMI’s free Investor Relations Mobile Application at http://www.pmi.com/irapp.

Philip Morris International: Delivering A Smoke-Free Future

Philip Morris International (PMI) is leading a transformation in the tobacco industry to create a smoke-free future and ultimately replace cigarettes with smoke-free products to the benefit of adults who would otherwise continue to smoke, society, the company and its shareholders.

PMI is a leading international tobacco company engaged in the manufacture and sale of cigarettes, as well as smoke-free products, associated electronic devices and accessories, and other nicotine-containing products in markets outside the U.S.

In addition, PMI ships versions of its IQOS Platform 1 device and consumables to Altria Group, Inc. for sale under license in the U.S., where these products have received marketing authorizations from the U.S. Food and Drug Administration (FDA) under the premarket tobacco product application (PMTA) pathway; the FDA has also authorized the marketing of a version of IQOS and its consumables as a Modified Risk Tobacco Product (MRTP), finding that an exposure modification order for these products is appropriate to promote the public health.

PMI is building a future on a new category of smoke-free products that, while not risk-free, are a much better choice than continuing to smoke.

Through multidisciplinary capabilities in product development, state-of-the-art facilities and scientific substantiation, PMI aim to ensure that its smoke-free products meet adult consumer preferences and rigorous regulatory requirements. PMI’s smoke-free product portfolio includes heat-not-burn and nicotine-containing vapor products.

As of March 31, 2021, PMI’s smoke-free products are available for sale in 66 markets in key cities or nationwide, and PMI estimates that approximately 14.0 million adults around the world have already switched to IQOS and stopped smoking. For more information, please visit and www.pmi.com and www.pmiscience.com.

Novartis Reaches Milestone Delivery Of One Billion Courses Of Antimalarial Treatment

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Novartis Reaches Milestone Delivery Of One Billion Courses Of Antimalarial Treatment

Novartis has delivered 1 billion courses of antimalarial treatment, including 430 million pediatric treatments, largely at no profit since 1999; With other innovations, the Novartis artemisinin-based combination therapy (ACT) contributed to reducing malaria deaths by nearly half over the same timeframe.

Novartis continues to invest in research and development for next-generation antimalarials to combat the threat of artemisinin resistance.

Novartis announced today that it has delivered one billion courses of an antimalarial treatment since 1999. More than 90% of this artemisinin-based combination therapy (ACT) was supplied without profit to malaria-endemic countries around the globe.

ACTs are the standard of care for the treatment of P. falciparum malaria, the most deadly form of the disease, responsible for over 99% of cases in Africa and half of the cases in Asia [2]. Since the turn of the century, ACTs have transformed malaria treatment and contributed to the dramatic reduction in malaria deaths.

Working with Chinese partners, Novartis launched the first fixed-dose ACT (artemether-lumefantrine) in 1999. Artemisinin is a natural compound found in the plant Artemisia annua, or sweet wormwood, and has shown to clear malaria parasites in the blood. ACTs combine an artemisinin derivative with a partner drug to reduce the risk of resistance if artemisinin is given alone.

Adoption of ACTs as first-line treatment by the World Health Organization (WHO) has been critical to the global malaria response. Since 2000, the WHO estimates that 1.5 billion malaria cases have been averted and 7.6 million lives saved.1 Along with malaria prevention tools and better diagnostics, ACTs remain a key component of the global drive to reach malaria elimination.

In 2001, two years after the launch of its ACT, Novartis signed an agreement with the WHO, committing to make the antimalarial available without profit to the public sector of malaria-endemic countries. Although the agreement expired in 2011, Novartis continues to provide treatments on the same terms as before.

“This is a landmark moment in the fight against malaria. Over the last 20 years, Novartis has delivered one billion treatments in more than 70 countries,” said Dr. Lutz Hegemann, Group Head, Corporate Affairs and Global Health, Novartis. “We could not have achieved this milestone without the support of our global partners and those we work with on the ground in endemic countries.”

Children bear a significant burden of malaria disease and death. This led Novartis and Medicines for Malaria Venture (MMV) to partner on the development of the first dispersible ACT formulated specifically for children. Of the 1 billion treatments delivered, more than 430 million are the pediatric formulation launched in 2009.

This pediatric treatment has contributed to a significant reduction in malaria deaths in children: in 2010, a child died every 30 seconds from malaria and now it is estimated that a child dies every two minutes. Although this is a massive improvement, there is still a long way to go.

Novartis continues to spearhead the use of ACTs to treat malaria. The company is now testing a new ACT formulation for infants weighing less than five kilograms in collaboration with the PAMAfrica research consortium led by MMV. This is one of the most vulnerable groups affected by malaria, for whom there is currently no approved treatment.

Over the last few years, worrying signs have been observed of emerging drug resistance to ACTs in South East Asia, and more recently in Africa. If widespread resistance to ACTs occurs, particularly in Africa, new effective treatments will be urgently needed. In 2018, Novartis committed to invest more than USD 100 million over five years to further advance research and development of next-generation treatments.

Novartis Pipeline In Malaria

Novartis currently leads five malaria development programs worldwide, featuring three compounds that employ new mechanisms of action and activity against artemisinin-resistant strains of the disease.

KAF156 belongs to a novel class of antimalarial compounds that act against both the blood and liver stages of the parasite’s lifecycle. It demonstrated activity against both P. vivax and P. falciparum malaria, including artemisinin-resistant parasites. Novartis leads the development of this compound with scientific and financial support from MMV and from EDCTP via the WANECAM2 Consortium.

KAE609 is another novel antimalarial compound demonstrating rapid clearance of parasites pre-clinically and in patients. Novartis is leading the development of KAE609 with financial support from the Wellcome Trust and in collaboration with the PAMAFRICA Consortium supported by EDCTP and led by MMV.

In 2020, the company discovered another novel malaria compound, INE963, which has an entirely new mechanism of action that will begin clinical trials in 2021. INE963 is a fast-acting, long-lasting antimalarial that holds promise for a high barrier to resistance. It was discovered with support from MMV and received the organization’s “Project of the Year” award in 2020.

UACN: Cost Pressures In Paints Business Depress Bottomline

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UACN: Cost Pressures In Paints Business Depress Bottomline

UACN Plc reported a 13% YoY revenue growth from N19.55bn in Q1 2020 to N22.02bn in Q1 2021. The Group’s revenue growth was majorly driven by the Animal Feeds & Other Edibles business segment, and the Packaged Foods & Beverages segment.

Operating profit grew marginally by 1% YoY from N1.13bn to N1.14bn. However, profit before tax dipped by 38% YoY from N1.67bn in Q1 2020 to N1.03bn in Q1 2021. Net profit declined by 31% YoY from N1.15bn in Q1 2020 to N791mn in Q1 2021.

Sustained Growth in Animal Feeds Business Drive Topline Growth

The Animal Feeds & Other Edibles business segment recorded a 14% YoY revenue growth from N11.70bn in Q1 2020 to N13.39bn in Q1 2021, attributed to price increases implemented across all categories, to offset rising input costs. The Animal Feeds & Other Edibles segment accounted for 60% of the Group’s total revenue in Q1 2021.

Packaged Foods Topline Grows on the back of Increased Market Penetration

Revenue from the Packaged Foods & Beverages rose by 22% YoY from N4.72bn in Q1 2020 to N5.89bn in Q1 2021. The revenue growth was driven by improved demand amid economic recovery from the Coronavirus pandemic.

Also, the management’s efforts towards market penetration yielded results during the period. The resulting increase in market share supported the topline growth in this segment.

The Packaged Foods & Beverages segment accounted for 25% of the Group’s total revenue in Q1 2021.

Continued Expansion Drive in the QSR Segment

Based on the strategic plans of the management to drive value in the Quick Service Restaurant business, revenue grew by 21% YoY from N376mn in Q1 2020 to N454mn in Q1 2021.

The Group’s strategy to drive growth and value in this segment include the opening of new corporate-owned stores and leveraging on its brand perception among consumers. New stores were opened during the quarter, thus spurring the double-digit topline growth.

Macroeconomic Pressures Weigh On Paints Business

The Paints segment recorded an 11% YoY revenue decline from N2.70bn in Q1 2020 to N2.21bn in Q1 2021, due to lower production activities during the quarter. Raw materials were scarce during the quarter, resulting from a significantly higher demand relative to supply as major economies rebounded from the Coronavirus pandemic. The scarce raw materials also led to higher costs incurred on raw input, which led to a 49% YoY profit before tax declined in the Paints segment.

Profit Declines Despite Cost Optimisation Efforts

Given an 18% YoY cost of sales growth (largely driven by costs incurred in the Paints business) relative to a 13% YoY total revenue growth, the Group’s gross profit declined by 3% YoY from N4.23bn in Q1 2020 to N4.01bn in Q1 2021.

Meanwhile, operating expense also declined by 5% YoY from N3.19bn in Q1 2020 to N3.04bn in Q1 2021, driven by a 12% reduction in selling and distribution expenses.

The 5% decline in operating expense supported operating income, as it grew by 1% YoY from N1.13bn to N1.14bn. However, net finance income declined by 77% YoY from N470mn in Q1 2020 to N109mn in Q1 2021.

The decline in net finance income was due to lower average yields on financial assets, given the low-interest-rate environment in the fixed income market. Consequent to the steep decline in net finance income, profit before tax declined by 38% YoY from N1.67bn in Q1 2020 to N1.03bn in Q1 2021. The effective tax rate in Q1 2021 was lower (23% versus 31% in Q1 2020).

Hence, the decline in profit after was 31% YoY from N1.15bn in Q1 2020 to N791mn in Q1 2021.

 

Unilever to introduce recyclable toothpaste tubes

Esan Bolaji
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Unilever to introduce recyclable toothpaste tubes

– Unilever’s oral care brands including Signal, Pepsodent and Closeup have announced plans to convert their entire global toothpaste portfolio to recyclable toothpaste tubes by 2025.

After four years of development, the recyclable tubes will be available later this year in two of Unilever’s biggest oral care markets: France and India. First launching in France with the company’s leading oral care brand Signal, the new tubes will be rolled out across its biggest range, Integral 8, which represents over a third (35%) of Unilever’s toothpaste portfolio in the country.

recyclable toothpaste

Traditionally, most toothpaste tubes are made from a combination of plastic and aluminium, which gives the packaging flexibility but also makes it difficult o recycle. Instead of aluminium, the new tubes will use a material made mostly of High-Density Polyethylene (HDPE), which is one of the most widely recyclable plastics globally.

It will also be the thinnest plastic material available on the toothpaste market at 220-microns, which will reduce the amount of plastic needed for each tube. To encourage wider industry change, the innovation will be made available for other companies to adopt.

Samir Singh, Executive Vice President, Global Skin Cleansing and Oral Care said:

“Plastic pollution is undoubtedly one of the biggest environmental challenges of our time. We can see its impact on our planet every day, including the billions of toothpaste tubes dumped into landfills every year.

That’s why I’m proud of this latest packaging innovation which will see our entire toothpaste portfolio shift to recyclable tubes by 2025. It’s been a long and challenging journey to get to this point, but we hope this transformation will inspire the wider industry to also make the change.”

The design has been approved by RecyClass, which sets the recyclability standard for Europe, as well as laboratories in Asia and North America. Meeting these rigorous requirements mean the new tubes can be recycled within standard HDPE recycling streams.

Working in partnership to drive innovation

Unilever’s oral care brands partnered with multiple global packaging manufacturers including EPL (formerly Essel Propack), Amcor, Huhtamaki and Dai Nippon Indonesia (DNPI). In addition, formulation and flavour experts at Unilever were essential throughout the testing process to ensure the new tubes continued to protect the quality and taste of the product.

Babu Cherian, R&D Oral Care Packaging Director at Unilever said:

“Recyclable tubes mark a key milestone in our packaging journey and, more significantly, they have the potential to transform the whole oral care industry. Together with our manufacturing partners, we’re making the new design available to any producers interested in adopting the new material, with the ambition to accelerate industry change.”

Alan Conner, Vice President – Europe, EPL (formerly Essel Propack) said:

“When it comes to making oral care sustainable, it has been challenging to develop a product that is recyclable without adding extra plastic to the tube.

EPL is a global market-leading supplier of toothpaste tubes and is delighted to support this breakthrough innovation representing a major turning point for the oral care industry and is a key first step in reducing plastic waste, enabling consumers to minimise their impact on the planet. Given the size and scale of Unilever, their commitment to convert 100% of its global toothpaste portfolio by 2025 will unquestionably lead others to take action as well.”

To drive further change across the waste management industry, Unilever is working with global recycling organisations to help ensure that the new tubes are collected and recycled. This will be the case in France, where consumers can put the new tubes in their home recycling bin ready to be collected and turned into new products.

This is only the start of Unilever’s oral care journey. Brands including Signal also plan to introduce more PCR (post-consumer recycled) plastic into their recyclable tubes by 2022 in France and other European markets. This will significantly reduce the use of virgin plastic and support the move towards a circular economy.

More broadly, the innovation contributes to Unilever’s commitment to ensure that 100% of its plastic packaging is designed to be reusable, recyclable or compostable, and its ambition to help collect and process more plastic packaging than it sells.

Traders’ Voice…“Inflation and Bitcoiners”

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Traders’ Voice…“Inflation and Bitcoiners”

Fact or Fiction…

After an unusually hot afternoon getting into a squabble with the next-door retail vendor who sold your favourite soda drinks for N150 and a bag of pure water for N250, one would struggle to agree with an inflation report that tells you that prices are rising at a slower rate.

The recently released inflation report was met with scepticism, as analysts and economists had to swallow their inflation projections in what appeared to be an unexpected decline in the rise in the inflation rate.

The headline index rose by 18.12% YoY in April 2021, which is 0.05% lower than the 18.17% increase recorded in March 2021. The jaw-dropping aspect of the report was with regards to the food segment, where both yearly and monthly inflation rates increased at a slower rate.

The food subindex printed at 22.72% YoY in April 2021, which is 0.23% lower than the 22.95% uptick recorded in March 2021.

Inflation…

This is the second surprising macro report we are getting this year since the unexpected fourth-quarter GDP report. As usual, we would rather clarify the factual basis to which the numbers were achieved.

Firstly, it can be observed that transportation cost has been taken off the list of major drivers for the core segment, and this has particularly affected the cost of haulage for various food items. Hence, such an improvement would help temper a further uptick in prices.

Secondly, we will also allude to the possibility of the partial border reopening carried out in January kicking into effect now, as certain scarce food items have managed to filter their way into the country.

The equity market is likely to find some support in this news, as the possibility of an increase in the benchmark interest rate weakens, considering the slowdown in inflation. The news will provide further support for current yield levels in the fixed income space. Nevertheless, inflation remains in dangerous territory and, the market has priced in most of the associated risks in the first quarter of the year.

“Bitcoin really an inflation hedge?”

This is one of the recent arguments that has gained a lot of attention in recent months. The logic is, unlike U.S. dollars or any other currency, bitcoin is designed to have a limited supply so, it cannot be devalued by a government or a central bank distributing too much of it.

The Argument for Bitcoin’s performance over the last year is directly aligned with movements in bond yields. When yields rise, so does bitcoin. This implies that the digital currency benefits directly from the “reflation trade” or the belief that inflation is coming.

Bitcoin vs 10-year US treasury yield

The Argument Against; The price is not just driven by the money-supply rule, it is driven by other speculative forces. That is why it is multiple times more volatile than the stock market. If inflation-induced a recession, for example, investors might respond by stepping away from riskier assets such as cryptocurrencies.

So how is this an inflation hedge? Let us look at the recent events and see how each argument holds up.

Inflation Highway…

Guess we have passed the rhymes to the U.S. as Inflation in April accelerated at its fastest pace in more than 12 years. The increase in the annual headline CPI rate was the fastest since September 2008, while the monthly gain in core inflation was the largest since 1981.

Energy prices overall, jumped 25% from a year earlier, including a 49.6% increase for gasoline and 37.3% for fuel oil. That came even though most energy categories saw a decline in April.

Excluding volatile food and energy prices, the core CPI increased 3% from the same period in 2020 and 0.9% monthly. In addition to rising prices, one of the main reasons for the big annual gain was because of base effects, meaning inflation was very low at this time in 2020 as the Covid pandemic caused a widespread shutdown of the U.S. economy.

Year-over-year comparisons are going to be distorted for a few months because of the pandemic’s impact. 

So which argument holds water? 

Bitcoin vs 10-year US Treasury Yield

“The Invisible Hand or the visible hand of Musk”

Traders' Voice

Chief Executive Elon Musk said on Wednesday, Tesla Inc (TSLA.O) will no longer accept bitcoin for car purchases, pointing to the long-brewing environmental concerns for a swift reversal in the company’s position on the cryptocurrency.

Bitcoin fell more than 10% after Musk tweeted his decision to suspend its use, less than two months after Tesla began accepting the world’s biggest digital currency for payment. Tesla’s stronghold on cryptocurrency started last year after Tesla revealed in February it had bought $1.5 billion of bitcoin, before accepting it as payment for cars in March, causing an estimated 20% surge in the cryptocurrency.

How much power does bitcoin really consume?

Bitcoin is created when high-powered computers compete against other machines to solve complex mathematical puzzles, an energy-intensive process that currently often relies on electricity generated with fossil fuels, particularly coal.

At current rates, bitcoin “mining” devours about the same amount of energy annually as the Netherlands did in 2019, according to data from the University of Cambridge and the International Energy Agency. So, if you are thinking of mining bitcoin in Nigeria, you may need to rethink.

Given the recent development and stronghold of Large bitcoin holders on the Market, the Argument against which states, “the price is not just driven by the money-supply rule, it is driven by other speculative forces” seems to be making a strong case. Nevertheless, we expect the recent decline in bitcoin to provide entry points for bitcoin believers.

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