S’Africa Inflation Rises Again Egypt Grid Expansion +More | Business Incorporated

[00:00:03][music] That's right. It's time to do business again. This time we have 25 minutes here on Business Incorporated. And here's what we have prepared for you.

[00:00:16]In South Africa, inflation is up again.

[00:00:18]It's gone up to 4.5% in May from 4% in April.

[00:00:24]Money sent from diasporans is used mostly for education and other household welfare. That's a report from Kenya.

[00:00:33]European Union and Egypt have announced a financing package that's worth up to€ 690 million e. That's for electricity.

[00:00:44]Welcome to the program. I'm in John Mua.

[00:00:46]This is Business Incorporated. We start from the global oil space. We saw just a little bit of change in the price of oil. uh is now still around a 3-month low. Investors are weighing the impact of a US Iran peace deal and the international energy ay's warning of a supply overhang uh next year against firmer near-term demand to replenish all that has been lost. So I guess that has uh changed the color just to be 0.39% as so it's gone up from about $78 we had in the morning to $7928 a barrel. WTI half a percent up $76.38 a barrel. And um oil analysts are saying that this position that we see may not be a very permanent one as both contracts hit their lowest level since early March um earlier in the session.

[00:01:38]The straits of Homos will reopen. Ships will begin to transit through this critical checkpoint in both directions.

[00:01:47]That's the expectation. Of course, we expect to see perhaps more drop in the price of oil. Looking at the price of gas, which also uses that straight of hummus, we see a 1.54% increase in that to $328 for um that and metals also closely related to all of that. Uh we see gold prices just a little change. Also, market participants are focusing on the Federal Reserve.

[00:02:15]We're expecting that decision announcement in a couple of hours. The new chair Kevin Walsh, how will that be?

[00:02:21]Details of the US Iran peace agreement.

[00:02:23]Of course, they are going to factor all of that into their decision. But is the first decision of Kevin Walsh? Uh we know he's a Trump man. Will he follow the data? Will he follow Trump's sentiment? We would see that. But for now, metals reacting to that expectations. We see spot gold is down 0.12% $4,349 30 spot silver a little bit down 0.07% $69.96 platinum is 1.2% in the red also $1,792.90 one uh 1.07% 07% in the red is what palladium has. Kappa is the only one that has escaped that. Uh we see that $652 after it gained 0.35%.

[00:03:09]And yes, one of those stories we teased earlier, South Africa's annual inflation rate. It accelerated to 4.5% in May from 4% in April, pushing consumer price growth close to its highest level in almost 22 months as fuel and transport costs continue to ripple through the economy. Statistics South Africa said that consumer prices increased by 0.7% month on month in May.

[00:03:36]>> Inflation jumped to 4.5% in May from 4% in April. This is the highest rate of increase since July 2024 when it was 4.6%.

[00:03:48]The inflation surge was largely driven by fuel price increases. The fuel index recorded its second consecutive large monthly increase, leaping by 14.3% to reach an annual rise of 28.7%.

[00:04:04]Over the past 12 months, prices for petrol increased by 24.8% 8% and diesel by 53.8%.

[00:04:13]The impact of higher fuel prices on overall inflation can be seen by looking at the index for the CPI excluding fuel.

[00:04:21]This index's annual change was 3.7% in May, the same as the previous month.

[00:04:28]This measure has moved in a narrow range between 3 and a half and 3.8% over the past 12 months. The monthly increase was 0.2% 2% in May compared to the overall CPI which increased by 0.7% between April and May.

[00:04:46]Well, now that there's a little bit of calm between the US and Iran and the straits of Homus, we'll see if that's or how long it may take to trickle down to uh what's going on in South Africa.

[00:04:58]Money sent home by Kenyans working abroad is increasingly going to household welfare with most remittances being spent on education, food, health care and housing. Well, these findings are contained in the 2025 remittances household survey that was revealed or unveiled by the Kenya National Bureau of Statistics as well as the central bank of Kenya and FSD Kenya. The survey, the first in Kenya, paints a detailed picture of how billions of shillings sent by family members overseas are supporting livelihoods, reducing poverty, and sustaining households consumption at a time when many families are grappling with high living costs. One of the most significant findings is that a large share of remittance income goes toward meeting basic household needs in Kenya.

[00:05:51]Emphibia Airlines efforts to tame its largest operating pressure has taken it to Saudi Arabia where the carrier is preparing a three-month fixed marginal price fuel deal. Less a bet on cheaper fuel than a bid for certainty. The contract comes as a fuel cost increase from 40 PC to 56 of its operating expenses within a year. tightening this financial framework for a carrier with a 117 aircraft order valued at $30 billion. For Ethiopian Airlines Group, the arrangement is a short-term shield against an energy bill that's too large and volatile to leave it to exposed to the market. And the group's chief executive officer has depicted that the problem is structural. Field now accounts for about 30.4% 4% of the industry's total cost base. Airlines are raising fairs and cargo rates to absorb an expected 70% year-on-year jump in jet fuel prices. A search forecast to add $100 billion to the industry's aggregate fuel costs.

[00:07:05]European Union and Egypt have announced a financing package worth up to€ 690 million euros uh to upgrade and expand the Egyptian electricity grid with a focus on accommodating additional renewable energy capacity. The arrangement brings together a 600 million euro loan from the European Investment Bank's Development Arm that's the EIB and up to 90 million euros in European Commission grants. The grid expansion project led by the state-owned Egyptian electricity transmission company will support the integration of up to 22 gawatts of renewable energy into the country's grid by 2030.

[00:07:52]All right, now let's take a break. When we come back, we'll head to the markets.

[00:07:55]Please stay with us.

[00:08:02]>> [music] >> Welcome back. You're watching Business Incorporated right here on Channels Television. Let's head to the market now and see what the numbers look like. Of course, we start from home. Uh the NGX is down. I don't know. Investors are not tired of taking profit yet pretty much.

[00:08:28]And uh well a lot of postulation around this is that um it's uh positioning for IPOs large IPOs including the Dangote but we continue seeing that drop in the market investors taking out what they have already made uh 0.24% at 241,396.60.

[00:08:49]But let's find out what's going on even as we speak with Ambrose Amodia. Ambrose Amodio is joining us virtually from Lagos. He's the chief research officer at Invest Data Consulting. Ambers, uh, good afternoon. Welcome to the program.

[00:09:04]Um, it's it's it's still a continuous red in the market.

[00:09:11]It is good for design investor and contri to buy into value at any time. No market remain up or down. The osillation is the beauty of stock market anywhere in the world. For me, this pullback is a welcome development in the market.

[00:09:26]Market have rallied for almost straight 6 months. Then market pulling back no in the last two weeks. Many investors are calling, traders are calling. Why is market now? No. At times I know I lie. I say when you are making money, we are not calling. We are not complaining.

[00:09:39]Market coming down is the be market.

[00:09:41]People have been entering when you enter money. This is the time for them also to enter the market because the fundamental of the market is liquidity and the economy itself still very very positive.

[00:09:52]If the economy know indices has gone sour or was looking negative that is where we start complaining and liquidity the market is still there our banks are really heady we have seen liquidity from the banks also being pre- election year in the market yesterday I was watching your channels TV saw people with a big abadas and cap those are providing money for the economy this election year more spending that could come back to the market in one way or the other and also the error of following their speculation and just penny stock has gone. This is the era for what for value investing and if market pulling back opponent to buy into that value for me there's no cost for allowing the market this the beauty of stock market anytime any day >> so we so we are counting down to September Dangote refinary IPO at what point can we expect there to be a relief from this pull back >> yeah actually it's not only in Nigeria when we are seeing kind of a big elephant in the house you know even in mature market we've seen high IPOs like this it's is about to shake the market but a market because we are still having September for Dango 3 to come in. Yes, I will say that the private placement just 2 days ago. Yet from that we expect that market will be in this mode just for a little while. But also if you take the pattern of our market that in equity investment following pattern is very very key. In the last years you know if you look at the month of June June has never been you know a kind of a vable market for shareholders or investors anytime in Nigeria market. Let me say because June is always down especially when we see know May positive June being the last month of the first half of the year. No activities, no earning season, nothing comes this apart from no GDP figure and what they call inflation figure will see another and for that this month has been in this for it's only last year that because of the positive sentiment we saw that June close positive go and check for me I'm not surprised and also dangote no being on board for preparing for IPO should not just that the only thing that will put the market down to speak now was shuffling is part of it we have made money in the market before we want to put take profit and see where you see a new trend the news that yes they about to sign in kind of a memorandum between US and Iran have shown that yes we see that that sector the have rally before now to see little stability in that sector design investor will not take profit from they look for elsewhere where they can also buy and most of the stock >> uh oh um spec >> all right looks like we have a little bit of h there with ambus Ambrose, can you hear me?

[00:12:32]>> Okay. All right. Okay. All right.

[00:12:34]Ambrose from audio on there was telling us what to expect and yes, we see the red in the market. Um, Ambrose, can you hear me now?

[00:12:40]>> Yes, I can hear you.

[00:12:41]>> Okay. Can you conclude your thought? I I we lost you for a bit.

[00:12:45]>> Yeah. Okay. I'm saying that the pattern is what we're seeing. There's no cause for alarm. And also being that the the the month of June, there's nothing to attract the market now because there's no any season that will put the market.

[00:12:56]I mean June being the last month for the first of the year supposed to be in this form in the history of our market for me so shortly that's ongoing for that opportunity to buy a lot of opportunity in the market in the banking sector in industrial in the consumer group there's no need of panicking because Q2 number kind of a new life to the market for the month of July July all right we'll be waiting we'll wait but if the market does not recover I'll come and meet you where you are thank no [laughter] >> problem is chief research officer, Invest Data Consulting. Thank you so much for your time.

[00:13:31]>> Thanks for having me.

[00:13:32]>> Yeah, let's see all the markets now. Uh Janisburg is also red at this time 0.22%.

[00:13:37]Uh look at Egypt and also um um Nairobi both of them escaped especially Nairobi closed yesterday positive 0.22%. But Egypt is looking really good. I wonder if it's that European um EU that they signed that has brought that but I mean that's far from it. But Egypt is intraday in the green more than 1%.

[00:14:00]We move over to the Middle East and see what's happening in that market. Uh it's also green. Dubai more than 1% Abu Dhabi also um green 0.33%. See other parts of the Middle East market. Tada missed out in that positive sentiment but Kata caught up with that 0.2. 23% in Asia market is closed there mostly higher. Uh Japan's DK225 we see there re reheating a new high at 69,92.25 up 0.72%.

[00:14:33]Obviously the story around Iran and the US and the peace that we expecting from there is giving a bit of relief to investors. The cost is almost 1.6% in the green. Hangen however is not positive at this time and Shangai and Nifty50 of India are both positive. In fact they're both 0.4% in the green.

[00:14:56]Moving over to the United States now to see early trade. Um well very sluggish movements is what we see for the Dow Jones almost not moving at all 0.00% but in the red. S&P and NASDAQ, however, are in the green at this time. Um, that decision, policy decision is what investors are waiting for. It's about 2:00 p.m. That's in the US time to be the first under the new chairman, Mr. Wash. So, uh, we'll see what happens after that. So, this is early trade.

[00:15:30]Now, let's go to Europe and see what the market or investors are doing there. We have Chapa Chimu. Hi, Chip. Good afternoon. Welcome to the program. Uh what are investors doing? What's the color of the market intraday?

[00:15:44]>> Well, in uh things have been a little bit unsure. There's been some gains. Uh but to be honest, markets are somewhat muted ahead of that first rate uh interest rate decision under the new Fed chair, Fed Reserve chair, Kevin Walsh, which you just mentioned. And so what we are seeing is that the stock 600 is actually up um around 0.3% which is not as high up as it was on Tuesday or on Monday. And of course, marketers are still very much keeping an eye on the developments in the Middle East and the details of that interim agreement between the United States and Iran. And things here in Germany, well, it's been a bit red. Uh the DAX is actually down 0.2%.

[00:16:23]Probably also linked to the fact that auto stocks have been falling here after luxury car maker BMW lowered its annual profit outlook due to weakness in the Chinese market and the impact of the Iran war. There's also a survey which shows that many auto suppliers here in Germany expect business conditions to worsen over the next years. So that's why we're seeing red at least here in Germany.

[00:16:45]>> Yeah. Well, I guess it's understandable um waiting for that decision announcement. But out of that uh we hear that Germany's population shrank for the first time since 2020. Uh what are the details of it?

[00:17:01]Well, for the first time in years, any net migration couldn't offset Germany's birth deficit. And that is because net migration fell significantly to 235,000 last year from 430,000 the previous year. In 2024, Germany actually began to crack down on irregular migration. and the current government which came in uh after last year's February generally gen general elections um they also promised to take a tougher stance against irregular migration so what we may be seeing now are really the effects of those migration immigration policies with a lower number of new arrivals and now Germany has of course had a declining birth rate for decades and its population has been aging so the fact that there were more deaths than births isn't really that surprising and this trend of course also means that the population in nearly all of Germany's 16 federal states declined except for three city states which of course are Berlin, Hamburg and Braymond.

[00:18:01]>> Yeah. Well, that's like opposite of Nigeria scenario. But obviously this could be a source of worry if not today in the near future when you look at the working population available to run economic activities for Germany.

[00:18:15]>> Exactly. It is also about the working pro population which of course affects the productivity of this country. And if you look at what happened last year, every age group on the country's population pyramid declined except for the number of baby boomers. So that's people aged 60 to 79 and that increased by 2.5%.

[00:18:35]And right now in just over 30% of the population in Germany is aged 60 or older. So you can imagine what that means for the working population. And it of course also has implications for the welfare state. Now without reform costs will become unmanageable. Now the German government is trying to reform the health care system. For instance, without cost-saving measures, Germany's public health insurance funds will actually face a budget shortfall of over 15 billion by next year. So premiums for health insurance, which is mandatory here in Germany, have been increasing.

[00:19:11]also because of the growing number of older people who are drawing more from the services. So the government is trying to lower the costs but there has been widespread criticism of the planned reform and we can also expect that any reform to uh to the public pension system like raising the retirement age will also face resistance. Now the expectation is that reform will continue to stall in Germany and that also means that we might see the economy stagnate in the coming years. Yeah, a real threat there. Uh, lass, a real threat. You know, countries like a lot of countries on the African continent take these things for granted, but I mean it's it's it's a real threat when you paint the picture like that. But thank you so much and we hope to see those reforms in the near future.

[00:19:53]>> Yes, thank you.

[00:19:57]>> So, let's see what's happening in the crypto space. We hear that Ripple, the blockchain firm that's closely associated with XRP ledger network invested in African payments company Flutterwave. Flutterwave is in the news again. It's getting some money and Flutterwave said that the funding round values the company at $3.2 billion. It's a Nigerian company and we are proud of uh what they are doing. It's not just bad news that comes out of Nigeria. The deal is set to integrate Ripple's US dollarbacked stable coin uh USD into Flutterwave's payment infrastructure, allowing businesses to settle some international transactions using digital dollars rather than relying solely on traditional banking network. We say congratulations to flo good news for Nigeria. At least let it not be all bad.

[00:20:52]And also another story says current reports from Reuters suggest that Binance, the world's largest crypto exchange, is set to lose permission to serve um European Union clients from next month because its license application is about to be rejected.

[00:21:11]That's what reports um suggest. Under the new EU rules called Mika, crypto firms have until the end of June to obtain a license to allow them keep servicing clients across the block in EU. Binance application made to Greece market regulator is set to be turned down and European regulators have been attempting to reign in crypto exchanges which allow people to trade cryptocurrencies such as Bitcoin around the g globe. So that's a worrying one for a whole block in the EU. Um Binance there might lose position. Then China is paying some close attention this China central bank to stable coins as privately issued digital currencies take on more um uh transactions across for crossborder payment. The director general of research bureau, the people's bank of China is asking authorities to closely monitor the impact of stable coins while improving international coordination and regulation. And we know that recently the IMF also warned of some risks um to Nigeria because of the increasing digital assets that they have noticed. So those are the top stories.

[00:22:22]Looking at the numbers, the price of Bitcoin, I believe we're still in red.

[00:22:27]Uh when it comes to the price of Bitcoin, it hasn't uh really recovered yet. Uh there you have it. 64,897.03, lost 2.21% in the last 24 hours.

[00:22:40]Ethereum is growing farther and farther away from 2000, lost more than 3%. XRP and all of that. Sir, should we be hopeful that the peace between Iran and and um the US will bring peace and calm to the market? Seems like a long time since we saw over a 100,000 for Bitcoin.

[00:23:01]We've lost that, but we're live and we are trading and we here on Channels TV, we would report. Thank you so much for being a part of the program. I'm In John McQua. I'll see you tomorrow. God's grace. [music]