Nigeria Wastes Oil Rally as Policy Muddle Deters Investors
Bloomberg 3/10/2021 Tope Alake
(Bloomberg) Nigeria isn’t making it easier for foreign investors to buy into its high-yielding assets.
A series of policy missteps in recent weeks highlighted some of the uncertainties investors face, and raised concerns that Africa’s biggest economy is missing an opportunity created by rising oil prices to attract much-needed foreign currency.
First, the country allowed fuel subsidies that have been a drain on state coffers in the past to creep back by allowing pump prices to stay low as the price of crude rose. Then the central bank devalued the naira, without providing any guidance on its currency-policy goals. And last week, the monetary authority u-turned on a decision to bar foreigners from investing in its short-term bills, leaving them wondering whether it’s worth the risk of putting money into an economy from which it’s notoriously difficult to extract
Nigeria Wastes Oil Rally as Policy Muddle Deters Investors
Bloomberg 3/10/2021 Tope Alake
(Bloomberg) Nigeria isn’t making it easier for foreign investors to buy into its high-yielding assets.
A series of policy missteps in recent weeks highlighted some of the uncertainties investors face, and raised concerns that Africa’s biggest economy is missing an opportunity created by rising oil prices to attract much-needed foreign currency.
First, the country allowed fuel subsidies that have been a drain on state coffers in the past to creep back by allowing pump prices to stay low as the price of crude rose. Then the central bank devalued the naira, without providing any guidance on its currency-policy goals. And last week, the monetary authority u-turned on a decision to bar foreigners from investing in its short-term bills, leaving them wondering whether it’s worth the risk of putting money into an economy from which it’s notoriously difficult to extract
Dot-com Era Stock Valuations Bring Bubble Fears to ESG Funds
Bloomberg 1/26/2021
(Bloomberg) It’s reality-check time for ESG funds.
Exchange-traded funds investing in companies with responsible environmental, social and corporate governance practices lured a record $85 billion in the U.S. and Europe in 2020, and are still raking it in. Pumped up by the flows, stocks in many of these funds are trading at frothy price-to-earnings multiples that are increasingly hard to justify. Take U.S. fuel-cell maker Plug Power Inc., for instance. The unprofitable company’s more than 2,000% rally since early 2020 outpaces even Tesla Inc’s.
“There is a risk that holdings that populate ESG funds have become overvalued,” said Chris Dyer, director of global equity at Eaton Vance. “Investors both active and passive are increasingly chasing these themes and driving valuation to uncomfortable levels in some cases. This type of naïve investing tends to end badly.”