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Egypt Stocks Continue Slide as Iran Re-entry Drives Oil Prices Lower

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Egyptian Stock Exchange in Cairo

Egypt stocks continued to fall on Sunday in line with regional markets as global oil prices hit new lows after economic sanctions on Iran were officially lifted.

Egypt’s main EGX30 index was down 1.66 percent at the end of the session to reach 5,760 points as local investors, who account for over 81 percent of trade, dumped a net LE23.9 million worth of shares, according to bourse data.

Market bellwether Commercial International Bank dropped 1.59 percent to trade at LE31.03 a share while the second largest listed share TMG Holding fell 2.21 percent to LE5.30 a share.

Blue chip Global Telecom Holding fell 3.01 percent to LE1.61 a share, while state-owned landline operator Telecom Egypt saw its share price drop 1.91 percent to LE5.65.

Saudi stocks were down close to 6 percent at the time of writing, while Dubai’s index tumbled 6 percent in the first hour of trade after benchmark oil prices fell to a 12-year low of $29 over the weekend in anticipation of the worsening of a global supply glut with increased production from Iran.

The oil-producing Iran has said that it plans to export an additional 500,000 extra barrels of crude oil a day in the short-term, after inspections on Saturday confirmed it had fulfilled the requirement of a nuclear agreement allowing for the lifting of international economic sanctions on the country for the first time in 40 years.

The EGX30 had reached a low of 5,531 points at the beginning of the day’s session before rebounding.

The Egyptian bourse issued a press release to calm investors on Sunday amid the sell-off, according to which 60 percent of the listed companies have P/E ratios of under 10, and that 11 percent of the companies had PE ratios of between 10 and 15.

Chairman Mohamed Omran also said in the release that 37 percent of the listed companies who issued coupons offered yields exceeding 10 percent.

The bourse had issued another statement last Thursday after a week of losses calling on listed companies to disclose their 2015 financial statements “so as to reflect the real situation of those companies in a way to help the investor form a realistic vision about their performance away from the cases of unexplained panic sweeping markets at some times, which is not built on a sound economic basis.”

Foreign investors were heavy sellers of Egyptian and other emerging market stocks last week, prompting local Egyptian investors to follow suit.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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