European shares fell sharply and the euro hit a near three-week low on Tuesday on worries that Greece will not be able to complete a major debt restructuring deal and on growing concern that global economic growth is weakening.
Private sector Greek creditors have until late Thursday to agree a debt swap needed to release its 130 billion euro second bailout and avert an imminent messy default, but fears have risen that acceptances may not meet the minimum required.
A disorderly Greek default would probably leave Italy and Spain needing outside help to stop contagion spreading and cause more than 1 trillion euros ($1.3 trillion) of damage to the euro zone, the group representing private bondholders warned in a document seen by Reuters.
“This week will determine the success or otherwise of the largest sovereign bond restructuring in history,” said Bill O’Neill, chief investment officer for EMEA at Merrill Lynch Wealth Management.
The euro fell to $1.3125, its weakest since February 17, according to Reuters report.
China’s lowering of its growth target and data pointing to Europe possibly slipping back into recession have also eroded the optimism on global markets generated by the European Central Bank’s provision of massive loans to banks since December.
“We’ve had the ECB bathe us in this warm glow of liquidity but politically there is a lot more to be done, and there is still a risk that tensions could rise again into the spring and summer,” said Rabobank’s senior currency strategist Jane Foley.
The potential for Europe to fall into recession was confirmed when statistics agency Eurostat said the economic output for the euro zone fell by 0.3 percent in the fourth quarter of 2011, compared to the previous three months.
Leading indicators for the current quarter have signaled further weakness since the start of the year.
SAFE HAVENS SOUGHT
The growing worries over the Greek debt swap drove demand for safe-haven German government bonds and hit peripheral euro area debt. Without the additional rescue funds agreed by euro zone finance ministers on February 21, Greece will be unable to make billions of euros of bond payments falling due this month.
The front month German Bund futures contract rose 42 ticks from the previous close to 140.25, after setting a record high of 140.39 during the day on Monday.
Spanish 10-year bond yields rose back above the 5 percent barrier, climbing 6 basis points to 5.05 percent. The Italian equivalent rose two basis points to hit 4.97 percent but continued to fare better than Spain.
“The market is really now looking at, on one side, what will happen to Greece and, on the other, the details of the next macro data releases to get an idea of growth in the second half of this year,” said Alessandro Giansanti, strategist at ING.
The weaker growth outlook saw stocks in China and Japan fall for a second day and triggered weakness in Australian resource shares, sending the MSCI world equity index (.MIWD00000PUS) down 0.5 percent to 328.23.
In Europe, automobile shares were being hit on the weaker demand outlook, with the falls led by French car maker PSA Peugeot Citroen (PAR:UG.PA – News) after it announced a planned 1 billion euro capital raising would involve a deep share price discount.
The FTSE Eurofirst (FTEU3) index of top European shares was down 1.2 percent at 1,067.26 points, its lowest level in over a week, although the index is up around 6.5 percent year-to-date.
“Latest macroeconomic figures from the euro zone, especially at a time when the ECB’s major liquidity operations are over, have raised concerns of a recession and disappointed markets,” Koen De Leus, strategist at KBC Securities in Brussels, said.
In oil markets Brent crude traded around $123 in a volatile market on Tuesday as fears of a disruption in Iranian supplies battled with the prospect of demand falls from slowing economies in China and Europe.
Front-month Brent crude fell 98 cents $122.82 a barrel at one point after climbing to a day’s high of $124.39. U.S. April crude gained 25 cents to $106.97.
The commodity-linked Australian dollar slipped 0.5 percent to $1.0621, as the nation’s central bank held its cash rate steady at 4.25 percent for a second month, but left the door open for an easing should the economy materially.
The New Zealand dollar also hit a near 6-week low of US$0.8122, down 1 percent on the day.
More Youths Engage In Artisanal Refining
As unemployment bites harder amidst rising cost of living, more youths in rural communities in Rivers State are now going into artisanal refining business to earn a living.
The Tide reliably gathered that some youths residing in Port Harcourt City were gradually moving to rural communities for bunkering business otherwise known as ‘kpo-fire’
Narrating his experience to The Tide, Mr Godwin Ibeneme who resides in Rumuekini in Akpor, said he was introduced into the kpor-fire business by his father.
Ibeneme, who hails from Ibaa/ Obelle area of Emohua Local Government Area, said his father compelled him to join other youths who were thriving in the business in the community.
“My father came to my house here in Rumuekini, and told me to come to the village, that other young men are making it through kpo-fire’ bunkering since I have lost my job.
“ I didn’t waste time to give it a trial, because I had really looked for what to do, since I lost my job at a fast-food company. Since then, I can tell you that I have been taking care of myself, unlike before when everything looked hopeless”, he explained.
The Tide also learnt that the kpo-fire’ business was currently thriving in Isiokpo axis of Ikwerre Local Government Area of the state.
A resident of the community who pleaded anonymity, told The Tide that there was a high level of discrimination in the business.
According to him, he decided to engage himself at the Port Harcourt International Airport, Omagwa, to hustle for his daily bread, instead of staying idle.
The Tide recalls that the Federal Government had promised to build modular refineries in the Niger Delta region since 2019 as an alternative to illegal oil bunkering in the region as well as to create employment for the youth.
The Tide also reports that three years after the promise was made, nothing has been done in that regard.
Oyigbo Cassava Plant, Legacy Project -Akawor
The Chairman of the Peoples Democratic Party (PDP) in Rivers State, Amb. Desmond Akawor, says the cassava plant project, being executed by the Rivers State Government in Oyigbo is a legacy project that will generate huge employment for Rivers people.
He said the project was well thought out and would stand the test of time to tackle unemployment as well as ensure food availability in the state.
Akawor made the remarks during an interaction with journalists at the weekend in Port Harcourt.
According to him, the cassava plant which was supposed to be executed by the previous administrations, was initially planned to be a joint venture between the state government and some organisations, but that the other partners did not pay their counterpart funding.
“The steps taken by the Wike-led administration to bring this project to life without the counterpart funding is commendable, because of the huge economic benefits it will give to the state.
“Many people have also been employed at the construction sites of flyovers being executed by Julius Berger. Eighty percent of those working there are indigenes, while the company provides the expatriates”, he said.
The PDP chairman also hinted on the plans of the state government to privatise the Buguma fish farm and banana farm, among others, so as to make them more viable.
He said that the state government had not abandoned the projects initiated by the previous administration, but was thinking on what to do with them.
Akawor maintained that the employment of 5,000 persons into the civil service was still ongoing, saying the government is only taking time to ensure that indigenes of the state are employed.
PH Airport Resumes Skeletal International Flight Operations
Skeletal flight operations have resumed at the international wing of the Port Harcourt International Airport, Omagwa.
This follows the lifting of the curfew that was imposed in the state by the Rivers State Government to check cases of insecurity in the state.
The Tide’s checks show that many of the airlines that operate international flights are yet to resume flight operations, even though the coast is clear for them to resume operations.
The Cronaux Airline, it was gathered, is the only airline at the moment that has fully resumed international flight.
Other airlines that operate at the international wing, like the Lufthansa Airline, Turkish Airline, and Ethiopian Airline are yet to resume operations.
The Acting Head of Corporate Affairs, FAAN, Kunle Akinbode, confirmed the resumption of international flight operations at the airport, last Friday, saying the international wing is now open for international airlines to operate.
He explained that the curfew that was imposed in the state delayed the resumption of international flights operations, even when issues of Covid-19 standard protocols had been addressed.
“Now that the curfew is over and the international wing is open for flight operations, it is left for each of the airlines to work out its own schedule for operations.
“It will not be the duty of the airport management to sort things out for them and know when to resume. I know that some have started. Lufthansa has said they will resume next month, August”, Akinbode said.
The Tide reports that the international wing of the Port Harcourt Airport had been shut since the Covid-19 lockdown, and did not reopen when other international airports in Lagos, Abuja and Kano among others reopened for international operations.
Stories by Corlins Walter
- Politics3 days ago
Onochie Makes Case For True Federalism
- Sports3 days ago
NPFL: Rivers United’s Captain Wants LMC To Apply Rule
- Sports3 days ago
Covid-19 Scare: Team Nigeria Undergoes Daily Tests In Tokyo
- Sports3 days ago
Nigeria’s wrestling Sensation, Adekuoroye Excited Over Role In Olympics
- Sports3 days ago
NBA: Milwaukee Star Anxious To Visit Nigeria – Wants To Learn About His Roots
- News3 days ago
Army Issues Official Vehicles To Sergeant Majors
- Business3 days ago
Nigeria To Boost Trade Volume Through ECOWAS TPOs
- Editorial4 days ago
Nigeria’s Growing Debt Burden