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Market Gains N52bn Despite 21 Stocks’ Loss

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The Nigerian Stock Exchange’s market capitalisation advanced by N52bn at the close of trading on the Exchange’s floor on Wednesday after recording losses of various degree on 21 stocks.

The market capitalisation appreciated to N9.418tn from N9.366tn recorded on Tuesday; the NSE All-Share Index also rose to 27,421.83 basis points from 27,272.14 basis points.

A total of 391.374 million shares worth N3.395bn were traded in 3,103 deals.

The market, in the course of trading, realised a maximum index point of 27,751.34 basis points, while the lowest and average index points recorded were 27,272.14 and 27,453.23 basis points, respectively.

The market recorded gains in 19 stocks.

Ikeja Hotel Plc, UAC Property Development Company Plc, International Breweries Plc, Dangote Flour Plc and Wema Bank Plc emerged as the top five gainers.

The shares of Ikeja Hotel appreciated by N0.09 (five per cent) to close at N1.89 from N1.80, while those of UAC Property closed at N3.90 from N3.72, gaining N0.18 (4.84 [per cent).

Similarly, the share price of International Breweries Plc closed at N18.08 from N18.05, gaining N0.83 (4.6 per cent), while that of Dangote Flour rose to N4.17 from N3.99, appreciating by N0.18 (4.51 per cent).

Wema Bank shares closed at N0.70 from N0.68, gaining N0.02 (2.94 per cent).

Other gainers were Okomu Oil Palm Plc, Glaxo SmithKline Consumer Nigeria Plc, Custodian and Allied Plc, Nigerian Breweries Plc, Access Bank Plc, Total Nigeria Plc, Stanbic IBTC Holdings Plc, Ecobank Transnational Incorporated Plc, United Capital Plc, Guaranty Trust Bank Plc, Continental Reinsurance Plc, United Bank for Africa Plc, Nestle Nigeria Plc and Dangote Cement Plc.

On the other hand, 7UP Bottling Company Plc, Cap Plc, Fidson Healthcare Plc, May and Baker Nigeria Plc and Livestock Feeds Plc were the top five losers at the close of trading.

7UP share price depreciated by N11.64 (9.74 per cent) to close at N107.86 from N119.50; while that of Cap closed at N33.40 from N37, losing N3.60 (9.73 per cent).

Fidson Healthcare recorded a drop of N0.09 (4.84 per cent) on its share price to close at N1.77 from N1.86; while May and Baker shares slid to N1.09 from N1.14, losing N0.05 (4.39 per cent).

The share price of Livestock Feeds also fell to N0.93 from N0.97, losing N0.04 (4.12 per cent).

Other losers were Aiico Insurance Plc, Diamond Bank Plc, Skye Bank Plc, PZ Cussons Nigeria Plc, Transnational Corporation of Nigeria Plc, NEM Insurance Company Nigeria Plc, Dangote Sugar Refinery Plc, Sterling Bank Plc, FCMB Group Plc, Fidelity Bank Plc, Eterna Plc, Nascon Allied Industries Plc and Honeywell Flour Mill Plc.

Flour Mills Nigeria Plc, Airline Services and Logistics Plc and Vitafoam Nigeria Plc also recorded losses on their share prices.

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

OPEC Agrees to Increase Oil Supply by 500,000 Barrels Per Day Ahead of Surge in Demand

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OPEC and allies finally agreed to ease their 7.7 million barrels per day production cut by 500,000 barrels per day starting from January 2021.

This will now bring the oil cartel’s total production cuts to 7.2 million barrels per day starting from next year.

Oil prices rose after the news as the market believed the approval of Pfizer COVID-19 in the United Kingdom will kick start a series of approvals and helped restore confidence, increase business activities and demand for the commodity across the globe.

After the outcome of the meeting was made public on Thursday, Brent Crude Oil against which Nigerian oil is priced gained 1.35 percent on Friday after gaining 1.4 percent on Thursday to $49.37 per barrel at 11.35 am Nigerian time on Friday.

The US West Texas Intermediate gained 1.29 percent to $46.23 barrel on Friday.

500,000 bpd from January is not the nightmare scenario that the market feared, but it is not what was really expected weeks ago,” said Rystad Energy senior oil markets analyst Paola Rodriguez Masiu. “Markets are now reacting positively and prices are recording a small increase as 500,000 of extra supply is not deadly for balances,” she added.

Investors King increased business sentiment in the energy sector to boost investment, increase activity in the sector and most important improve crude oil demand enough to accommodate the 500,000 barrels per day extra that would be hitting the global market starting from January.

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

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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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