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Asian Stocks Follow U.S. Shares Higher as Japan Advances on Yen

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Indonesia Stock Exchange

Asian stocks followed U.S. shares higher ahead of a meeting of finance chiefs from the Group of 20 countries as a weaker yen buoyed Japanese equities.

The MSCI Asia Pacific Index rose 0.3 percent to 119.76 as of 9:02 a.m. in Tokyo, headed for a 0.1 percent increase this week. The Standard & Poor’s 500 Index climbed 1.1 percent in New York Thursday to close at its highest since Jan. 6 and West Texas Intermediate crude rose 2.9 percent, as a rout in Chinese equities failed to spread. Focus turns to the G-20 meeting from Friday in Shanghai as volatility in markets unsettles investors this year.

“With the upcoming G-20 meeting, we may well see a lot of talk and little action,” said Niv Dagan, Melbourne-based executive director at Peak Asset Management LLC. “What we’d like to see is a coordinated approach from the G-20 to boost spending and produce some sense of certainty for markets. Investors remain cautious. We are not seeing too many companies increasing their profit guidance and investors are happy to sit on their hands.”

Japan’s Topix index rose 1.1 percent, with all 33 industry groups advancing, as the yen traded at 113.14 per dollar after falling 0.7 percent Thursday.

South Korea’s Kospi index gained 0.4 percent and New Zealand’s S&P/NZX 50 Index slid 0.1 percent. Australia’s S&P/ASX 200 Index lost 0.4 percent.

Sharp Corp. sank 11 percent in Tokyo. Hours after winning a board vote to take control of the Japanese electronics maker, Taiwan’s Foxconn Technology Group said it wouldpostpone signing a definitive agreement because of “new material information.” This refers to about 350 billion yen ($3.1 billion) of contingent liabilities at Sharp, the Wall Street Journal reported, citing unidentified people familiar with the matter.

Woolworths Drops

Woolworths Ltd. fell 2.1 percent in Sydney after Australia’s largest supermarket chain posted a first-half loss and appointed Brad Banducci as chief executive officer to turn around the company’s fortunes.

Futures on Hong Kong’s Hang Seng Index rose 0.7 percent in most recent trading and contracts on the Hang Seng China Enterprises Index of mainland Chinese firms listed in the city advanced 1.2 percent. Futures on the FTSE China A50 Index added 0.5 percent.

The Shanghai Composite Index tumbled 6.4 percent on Thursday as surging money-market rates signaled tighter liquidity and the offshore yuan declined for a fifth day. Central bank Governor Zhou Xiaochuan is set to speak in Shanghai Friday as governments and private sector analysts continue to downgrade their outlook for the world economy amid China’s slowdown, tumbling oil prices and tepid demand.

No Turnaround

The MSCI Emerging Markets Index added 0.2 percent on Friday, trimming its decline over the past year to 26 percent. John-Paul Smith, one of few to anticipate the slump in developing markets that began in 2011, sees no sign of a turnaround and says the current environment resembles that of the late 1990s, when crises in Southeast Asia and Russia roiled the entire asset class.

Futures on the S&P 500 added 0.1 percent. The underlying U.S. equities gauge rose to a seven-week high Thursday as banks and consumer-staples shares climbed amid optimism on the economy after data showed weakness in manufacturing may be easing. A report showed orders for U.S. capital goods rebounded in January by the most since June 2014. Orders for all durable goods rose 4.9 percent, the most since March.

The MSCI Asia Pacific gauge trades at 12.7 times estimated earnings, below its average for the past five years. The gauge slumped 14 percent from the start of the year through the low on Feb. 12 and has since rallied 6.4 percent.

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.

Markets

Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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