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Ashaka Cement, GSK, Fidson Emerge Top Market Losers

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Ashaka Cement Plc, GlaxoSmithkline Consumer Nigeria Plc, Fidson Healthcare Plc, Vitafoam Nigeria Plc and Transnational Corporation of Nigeria Plc emerged as the top five losers at the close of trading on the floor of the Nigerian Stock Exchange on Thursday.

The NSE market capitalisation closed flat, moving from N9.699tn to N9.703tn, while the NSE All_Share Index closed at 28,247.56 basis points from 28236.23 basis points.

An aggregate of 365.374 million shares worth N2.09bn exchanged hands in 2,905 deals.

The highest index point attained in the course of trading was 28,263.16 basis points, while the lowest and average index points were 28,236.23 and 28,248.58 basis points, respectively.

The equity market closed relatively flat with the ASI edging four basis points amid mixed closes across key sectors. Global markets closed higher following a rally in oil prices as the Organisation of Petroleum Exporting Countries struck an accord to cut production for the first time since 2008.

The oil and gas sector recorded a 3.07 per cent appreciation and was the only key sector to close higher in Thursday’s session supported by 6.92 per cent gain in the share price of Oando Plc, five per cent rise in the share price of Seplat Petroleum Development Company Limited and 4.72 per cent appreciation in the share price of Conoil Plc.

While the industrial goods sector closed flat, the consumer goods sector snapped its five-session gaining streak as GSK’s share price dropped by 4.39per cent, Vitafoam share price dropped by 4.01 per cent and Nigerian Breweries Plc also dropping by 1.07 per cent.

These losses offset advances in Unilever Nigeria Plc and Nestle Nigeria Plc, which appreciated by 3.25 per cent and 1.2 per cent, respectively.

The financial services sector declined by 0.66 per cent, driven by2.25 per cent, 0.94 per cent and 0.51 per cent declines in Guaranty Trust Bank Plc, FBN Holdings Plc and Zenith Bank Plc, respectively.

The market breadth turned positive with 29 advances and 19 declines.

Commenting on the possible outcome of the next trading session, analysts at Vetiva Capital Management Plc,  in the firm’s daily market analysis, said, “Although the widely positive market breadth somewhat suggests improvement in overall market sentiment, we highlight that most bellwether stocks remain under pressure and think this could weigh on the ASI at week close.”

Amid relatively unchanged liquidity, the interbank call rate moderated slightly to 14.33 per cent, dropping 34 basis points. In the foreign Exchange interbank market, the naira appreciated N7.68 to close at N305.31 but the one year forward rate rose N36.60 to N388.20.

The Treasury bills market traded relatively bullish as yields moderated 11 basis points on average. The declines were particularly stark on the long-dated bills as yields on the 322 day-to-maturity and 357DTM  bills declined to 21.40 per cent and 22.16 per cent respectively.

Meanwhile, the bond market continued its bearish streak with yields on most benchmark bonds inching higher. Notably, yield on the 12.50 per cent Federal Government of Nigeria March 2036 bond moderated 10 basis points to 15.03 per cent; but this was outweighed by advances in the yields of the 14.20 per cent FGN March 2024 and 12.14 per cent FGN July 2034 bonds as they closed at 15.02 per cent and 14.94 per cent respectively.

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.

Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday

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Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension

Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.

Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.

Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.

While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.

According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.

“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.

The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.

I do believe we’re headed for a much healthier supply and demand environment” she said.

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Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

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Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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Gold

Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin

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Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges

Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.

The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.

The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.

We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.

Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.

Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.

In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.

The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.

 

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