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Investors Lose N804bn in Seven Days

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Economic Diversification

Equity investors in the country’s capital market in the first seven trading days of the year lost N804tn of their investment worth.

Market capitalisation after the trading on the floor of the Exchange on Tuesday closed at N8.95tn while on the first day of trading in 2016 (January 4), market capitalisation was pegged at N9.75tn. This depicts a loss of N804bn.

The All-Share Index also dropped from 28,370.32 basis points on the first day of trading in 2016 to 26,034.94 basis points on Tuesday.

The daily market performance of the NSE showed a drop in market capitalisation from N9.062tn on Monday to N8.953tn while the ASI also depreciated from 26,350.18 points to 26,034.93 on Tuesday.

A total of 223.385 million shares worth N2.512bn were traded in 2,776 deals. The highest index point recorded was 27,266.18 while the lowest and average index points were 26,034.93 and 26,350.18, respectively.

After the close of trading on Tuesday, 32 quoted firms emerged losers while only eight had their share prices appreciated.

On the other hand, 18 companies emerged losers while 12 gained on the first day of trading in 2016.

Livestock Feeds Plc, Tiger Branded Consumer Goods Plc, Nigerian Aviation Handling Company Plc, UAC Properties Plc and Cadbury Nigeria Plc emerged top losers.

The share price of Livestock Feeds closed at N1.22 from N1.34, losing N0.12 (8.96 per cent) while that of Tigerbrands shed N0.08 (8.51 per cent) to close at N0.86 from N0.94. NAHCO shares depreciated by N0.18 (five per cent) to close at N3.42 from N3.60.

UAC Properties shares also lost N0.29 (five per cent) to close at N5.51 from N5.80 while that of Cadbury closed at N15.49 from N16.30, losing N0.81 (4.97 per cent).

Other losers were Zenith Bank Plc, Oando Plc, PZ Cussons Nigeria Plc, Transnational Corporation of Nigeria Plc, Berger Paints Plc, Diamond Bank Plc, N.E.M. Insurance Company Nigeria Plc, Law Union and Rock Insurance Plc, Vono Products Plc, African Prudential Registrars Plc, Nigerian Breweries Plc, Unity Bank Plc, United Capital Plc, Ashaka Cement Plc, Cutix Plc, and Ecobank Transnational Incorporated.

Guaranty Trust Bank Plc, Neimeth International Pharmaceuticals Plc, Continental Reinsurance Plc, Wema Bank Plc, FBN Holdings Plc, UACN Plc, FCMB Group Plc, United Bank for Africa Plc, Skye Bank Plc, Stanbic IBTC Holdings Plc and Union Bank Nigeria Plc also emerged losers after the day’s trading.

May and Baker Nigeria Plc, Champion Breweries Plc, Eterna Plc, Portland Paints and Products Nigeria Plc, and Trans-national Express Plc topped the gainers table.

May & Baker shares gained N0.05 (five per cent) to close at N1.05 from N1 while that of Champion Breweries closed at N3.38 from N3.22, appreciating by N0.16 (4.97 per cent).

The share price of Eterna also closed at N1.69 from N1.61, gaining N0.08 (4.97 per cent) while that of Portland Paints and Products appreciated by N0.19 (4.82 per cent) to close at N4.13 from N3.94.

Trans-national Express shares gained N0.04 (3.60 per cent) to close at N1.15 from N1.11. Learn Africa Plc, Access Bank Plc and International Breweries Plc also emerged gainers after the close of trading at the Exchange.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Energy

Unlocking Investments into Africa’s Renewable Energy Market

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green energy - Investors King

The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT. 

The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.

Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.

In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.

Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustain­able energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.

The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.

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Energy

Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips

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Shell profit drops 44 percent

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.

“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.

Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.

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Crude Oil

Oil Gains 1 Percent on Possible Tight Supply 

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Oil prices - Investors King

Oil prices rose on Tuesday as analysts pointed to signs of U.S. supply tightness, ending days of losses as global markets remain haunted by the potential impact on China’s economy of a crisis at heavily indebted property group China Evergrande.

Brent crude gained 95 cents or 1.3% to $74.87 a barrel by 0645 GMT, having fallen by almost 2% on Monday. The contract for West Texas Intermediate (WTI) , which expires later on Tuesday, was up 91 cents or 1.3% at $71.20 after dropping 2.3% in the previous session.

Global utilities are switching to fuel oil due to rising gas and coal prices, and lingering outages from the Gulf of Mexico after Hurricane Ada that imply less supply is available, ANZ analysts said.

“While slowing Chinese economic growth and uncertainty around the (U.S.) Fed’s tapering timetable weighed on market sentiment, other developments still point to higher oil prices,” ANZ Research said in a note.

Still, investors across financial assets have been rocked by the fallout from heavily indebted Evergrande (3333.HK) and the threat of a wider market shakeout in the longer term.

“Evergrande’s woes are threatening the outlook for the world’s second-largest economy and making some investors question China’s growth outlook and whether it is safe to invest there,” said Edward Moya, senior market analyst at OANDA.

While that view of the state of China’s economy is weighing on markets, the U.S. Federal Reserve is also expected to start tightening monetary policy – likely to make investors warier of riskier assets such as oil.

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