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Market Gains N121bn Despite Losses by 14 Firms

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Nigerian Stock Exchange

The value of equities in the Nigerian Stock Exchange appreciated by N121bn on Thursday in a second-day gain after straight losses for 10 days. This feat was realised despite the fall in the share prices of 14 firms quoted on the Exchange.

Data at the end of trading showed a rise in market capitalisation from N8.025tn to N8.146tn and an appreciation in the NSE All-Share Index from 23,335.01 basis points to 23,686.67 basis points.

A total of 476.148 million shares worth N3.636bn exchanged hands in 5,398 deals, with 29 firms gaining on their share value.

The highest index point recorded in the trading session was 23,686.67 basis points, while the lowest and the average index points were 22,456.32 and 23,108.57 basis points, respectively.

FBN Holdings Plc, Union Bank Nigeria Plc, Nigerian Breweries Plc, Okomu Oil Palm Plc and 7UP Bottling Company Plc emerged top five gainers after the close of trading.

Other gainers were: Skye Bank Plc, Livestock Feeds Plc,Nestle Nigeria Plc, AIICO Insurance Plc, Nascon allied Industries Plc, UACN Plc, Portland Paints and Products Plc, Nigerian Aviation Handling Company Plc, Zenith Bank Plc, N.E.M. Insurance Company Nigeria Plc, Eterna Plc, Cutix Plc, Airline service and Logistics Plc, May & Baker Nigeria Plc, Tiger Branded Consumer Goods Plc, and Diamond Bank Plc.

Unity Bank Plc, Learn Africa Plc, PZ Cussons Nigeria Plc, Guinness Nigeria Plc, Transnational Corporation of Nigeria Plc, Dangote Sugar Refinery Plc, Custodian and Allied Plc, and Dangote Cement Plc also emerged gainers.

FBN Holdings shares appreciated by N0.41 (10.25 per cent) to close at N4.41 from N4, while those of Union Bank gained N0.49 (9.94 per cent) to close at N5.42 from N4.93.

The share price of Nigerian Breweries closed at N105.50 from N97.60, gaining N7.90 (8.09 per cent).

Similarly, the shares of Okomu Oil Palm appreciated by N2.01 (7.18 per cent) to close at N30 from N27.99, while those of 7UP rose by N10.99 (6.78 per cent) to close at N172.99 from N162.

Honeywell Flour Mill Plc, Sterling Bank Plc, Vitafoam Nigeria Plc, Axamansard Insurance Plc, and Fidelity Bank Plc emerged the top five losers on Thursday.

Other losers on Thursday were: Ecobank Transnational Incorporated, Ashaka Cement Plc, Lafarge Africa Plc, Flour Mill Nigeria Plc, Africa Prudential Registrars Plc, Stanbic IBTC Holdings Plc, Berger Paints Plc, Guaranty Trust Bank Plc and Access Bank Plc.

Honeywell Flour Mill shares fell by N0.15 (9.2 per cent) to close at N1.48 from N1.63, while those of Sterling Bank lost N0.16 (8.99 per cent) to close at N1.62 from N1.78.

The share price of Vitafoam Nigeria Plc depreciated by N0.40 (8.03 per cent) to close at N4.58 from N4.98.

Axamansard Insurance shares fell to N2.28 from N2.40, losing N0.12 (five per cent), while Fidelity Bank shares recorded a loss of N0.06 (4.48 per cent) to close at N1.28 from N1.34.

In the second week of this month, some capital market experts in the country had expressed optimism about the performance of the market this year.

They said the current bearish trend in the market was temporary, as the market was expected to be slightly bullish later in the year.

Research analysts at Meristem Securities, in the company’s 2016 outlook, said, “Based on our mix of methodologies, we arrived at a forecast 2016 index level of 30,244 points, indicating a 5.59 per cent potential market return by December 31, 2016.

“Although predicted, the extended bearish mood in the stock market appeared to have unsettled investors as sell sentiments pervaded activities on the Nigerian bourse, with 31 stocks recording positive year-on-year returns, while 88 stocks diminished in value by 2015 year end.

“In line with this trend, the Nigerian Stock Exchange All-Share Index, which measures the performance of the bourse, pegged at 28,642.25 points, representing a 17.36 per cent decline from December 31, 2014.”

For 2015, they said the performance of the equities market was largely buoyed by weak corporate earnings occasioned by major economic headwinds, weak demand, rising insurgency and foreign exchange conundrum.

While the analyst expected some respite in 2016, they also anticipated that the trends in equities market would be extended to the early months of 2016.

Punch

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

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Markets

Flashing Green

Oil prices have rebounded strongly over the last few days – up around 10% from the lows – buoyed by the prospect of a lower price cap on Russian crude

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Traders Wall Street

By Craig Erlam, Senior Market Analyst, UK & EMEA, OANDA

We’re seeing green flashing across the board on Thursday, with sentiment buoyed by positive signals on Fed rate hikes and China’s Covid response.

While it could be argued that Jerome Powell’s comments on Wednesday were relatively balanced – slower tightening now but rates high for longer – the last year has proven that anticipating the path of inflation even a short period ahead is incredibly difficult. Knowing what the Fed intends to do next is far more valuable than what it thinks it may do 6-12 months down the line.

And anything that is perceived to reduce to possibility of an interest rate recession is going to be a positive for equity markets. The Fed has every opportunity to tighten more in the months ahead if the data doesn’t play ball. What’s far more difficult is undoing the damage caused by moving too fast now with little to no visibility on how impactful past tightening has been.

Positive signals

The signals coming from China also look very positive. While we shouldn’t expect a dramatic shift in policy from the leadership, particularly before the March Congress, any modest softening in its Covid-zero policy will and should be welcomed. The approach has been extremely damaging to growth and confidence and the protests highlight how public opinion towards it is changing.

We shouldn’t be naive to the fact that a move away from the policy won’t be easy and there’ll be plenty of setbacks. But it’s certainly a step in the right direction that, along with the measures announced to revive the property market, could put the economy on a much better path.

A huge few days for oil markets

Oil prices have rebounded strongly over the last few days – up around 10% from the lows – buoyed by the prospect of a lower price cap on Russian crude, another large production cut from OPEC+ this weekend, and China’s evolving Covid stance. There remains considerable uncertainty surrounding all of the above though which will likely ensure prices remain volatile going into the weekend. That could carry more risk than normal if the OPEC+ meeting does go ahead as planned on Sunday and the EU hasn’t agreed to the price cap level by the close of play Friday. The range of possibilities on these two things alone is huge which will make rumours and speculation over the coming day or two all the more impactful.

Gold testing range highs

Gold bulls were particularly happy with Powell’s comments on Wednesday with the yellow metal rallying strongly to trade at the upper end of its recent range. It faces strong resistance around $1,780 though which was a significant level of support in the first half of the year. With so much data to come over the next day or so, it may not prove particularly resilient if traders are given further hope that rates will rise more slowly and peak lower.

Some relief for cryptos

The risk relief rally is coming at just the right time for bitcoin, helping it to recover from the lows to trade around $17,000. This is around the highs of the last few weeks since it settled after its latest plunge. Whether it will be enough to revive interest in the cryptocurrency, I’m not sure. The FTX fallout is continuing to weigh heavily on the space and the prospect of more contagion or scandals is hard to ignore.

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Crude Oil

Oil Revenue into Foreign Reserve Dropped From $3bn Monthly in 2014 to Zero in 2022

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Oil

The official foreign exchange receipt from crude oil sales into Nigeria’s official reserves has dried up steadily from above US$3.0 billion monthly in 2014 to an absolute zero dollar today, the Central Bank of Nigeria (CBN) governor, Godwin Emefiele disclosed.

Speaking at the 57th annual bankers’ dinner organized by the Chartered Institute of bankers of Nigeria (CIBN) in Lagos, the CBN governor noted that there has been a significant loss in foreign reserves due to the naira’s struggle and the rise in demand for forex. 

He added that the sharp increase in the number of Nigerians who are seeking education in foreign countries particularly the UK has resulted in an unprecedented demand for foreign exchange. 

According to him, the number of student visas issued to Nigerians by the UK alone has increased from an annual average of about 8,000 visas as of 2020 to nearly 66,000 in 2022.

Emefiele also lamented about the level of crude oil theft in Nigeria which has significantly affected the country’s oil production. He noted that crude oil theft has adversely impacted the Country’s foreign exchange reserves.

Investors King had earlier reported that Nigeria has lost its coveted position as Africa’s largest oil producer after oil production dropped below the mark of 1 million barrels per day. 

Nigeria currently trails Angola, Libya and Algeria to the fourth position. 

Meanwhile, on the Naira-4-Dollar scheme which the CBN introduced to boost migrant remittances into the Nigerian economy, the CBN governor noted that the scheme has largely been successful. 

“I am happy to note that, so far, the Naira-for-Dollar scheme has been successful in increasing remittance inflows through our registered International Money Transfer Organisation (IMTOs),” he said.

Emefiele also noted that the introduction of the National Domestic Card Scheme (NDCS) will help to reduce the operating cost incurred by commercial banks while using foreign cards. 

It could be recalled that the CBN earlier announced that it planned to introduce Nigeria-made transactional cards to replace well-known cards such as Visa and MasterCard.

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Crude Oil

Crude Oil Gained 2% as U.S. Oil Inventories Dipped Last Week

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Crude Oil - Investors King

Crude oil appreciated on Tuesday on signs global supply is declining amid better-than-expected optimism on Chinese economic recovery and a weaker dollar.

But the likelihood that OPEC+ will leave output unchanged at its upcoming meeting limited the gains.

Brent crude futures rose $2.06, or 2.48% to $85.09 per barrel by 1044 GMT. The more active February Brent crude contract rose by 2.02% to $85.95.

U.S. West Texas Intermediate (WTI) crude futures climbed $1.69, or 2.16%, to $79.89.

Support followed expectations of tighter crude supply.

U.S. crude oil stocks dropped by 7.9 million barrels in the week ended Nov. 25, according to market sources citing American Petroleum Institute figures on Tuesday.

Official figures are due from the U.S Energy Information Administration on Wednesday.

And the International Energy Agency expects Russian crude production to be curtailed by some 2 million barrels of oil per day by the end of the first quarter next year, its chief Fatih Birol told Reuters on Tuesday.

On the demand side, further support came from optimism over a demand recovery in China, the world’s largest crude buyer.

China reported fewer COVID-19 infections than on Tuesday, while the market speculated that weekend protests could prompt an easing in travel restrictions.

Guangzhou, a southern city, relaxed COVID prevention rules in several districts on Wednesday.

A fall in the U.S. dollar was also bearish for prices. A weaker greenback makes dollar-denominated oil contracts cheaper for holders of other currencies, and boosts demand.

Fed Chair Jerome Powell is scheduled to speak about the economy and labour market on Wednesday, with investors looking for clues about when the Fed will slow the pace of its aggressive interest rate hikes.

Capping gains, the OPEC+ decision to hold its Dec. 4 meeting virtually signals little likelihood of a policy change, a source with direct knowledge of the matter told Reuters on Wednesday.

“Market fundamentals favour another cut, especially given the uncertainty over China’s COVID situation … Failure to do so risks sparking another selling frenzy,” said Stephen Brennock of oil broker PVM.

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