Global News: Gold rebounds amid geopolitical tensions and US election uncertainty.
Nigeria Approves Exxon’s $1.3B Onshore Oil Asset Sale to Seplat
Gold prices rebounded after retracing to a certain extent from a new high yesterday. The asset could remain exposed to a stronger dollar and rising Treasury yields, led by increasing expectations that the Federal Reserve could take a cautious approach to monetary policy easing.
Our thoughts
Gold touched another record high this week. The commodity is seen as a hedge against political uncertainity. Seeing that US is the country of the world, their upcoming elections, a sprinkle of concerns about inflation and rising tensions in the middle east is what is driving demand for gold right now!
Other drivers?
It appears that Central banks have increased their reserve gold stock and retail investors have joined the frenzy by buying gold coins at costco.
Does this price increase affect your gold Jewelry? OF COURSE!
Preowned jewelry will of course be slightly discounted but the price will follow the trend.
Should you buy gold? Yes! It is always a good inflation hedge, will increase in value over time.This is a good diversification option.
How can you buy gold:
Buy from your regular (legit) gold souk
Buy a gold bar (or 2 from costco)
Investing in gold ETFs (e.g. New Gold ETF (Nigeria) and GLDPA (SPDR Gold).
African News: Kenyan Court Upholds Ruto’s Tax to Fund Affordable Housing.
The Housing Levy was properly enacted and in accordance with the Constitution, the High Court has ruled. The Court dismissed six petitions which were challenging the affordable housing Act.
Our thoughts
Africans aren't used to paying to fund their collective advancement. There are very few countries that can achieve significant development without increasing taxes. These "few good ones" have successfully harnessed their assets for collective prosperity and are reaping the fruits of it.
Till we get to that point (if we ever do) taxes (and the steady increase in them) is here to stay. Do you plan to be uber rich in 20 yrs? Plan your taxes today! Don't be caught sleeping.
Nigerian News: Nigeria Approves Exxon’s $1.3B Onshore Oil Asset Sale to Seplat
Nigeria has approved Exxon Mobil Corp.'s $1.3 billion sale of its onshore oil and gas assets to Seplat Energy Plc, ending a two-year delay in concluding the deal. However, the Nigerian government rejected a similar transaction by Shell Plc to sell its onshore assets to a local consortium for the same amount.
Our thoughts
Interesting that this deal was announced in 2022 and is just being approved. From an investor perspective Seplat has 4 additional oil mining leases (omls) to make (more?) money from.
from a risk perspective - international oil companies have struggled to manage onshore assets in recent times due to security & community issues, do we see Seplat being able to navigate these challenges better?
A deal has been closed, Seplat will now begin the work of securing and exploiting their newly purchased assets. This should be good for their stock price.
What’s happening at the Money Wit Club…..
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Highlights in the Club this Week:
This week in the club, we launched our fireside chat which was a success. Members enjoyed a valuable session with our guest, Mr. Tarela, who is also a member of the club. He shared his expertise during our Fireside Chat on mortgages as an investment tool.
Key insights from the discussion included:
Property Title: Members learned the importance of ensuring that any property has a marketable and recognizable title, with the owner authorized to sell it. A viable property can be an excellent candidate for a mortgage.
Commercial vs. Private Mortgages: Attendees discovered that commercial pricing is generally higher than that of privately funded mortgages.
Fixed Mortgages: The session emphasized how a fixed mortgage can provide protection against rising interest rates, ensuring financial stability.
Entering the Property Market: Members were reminded of the significance of due diligence when entering the property market.
Rent Vs Mortgage: Mortgages are a long-term strategy, while renting often serves as a short-term solution, especially in Nigeria’s economy of Today.
Our next session by another seasoned guest happens November 7th. Here are details on how to join the club below: