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Ashaka Cement, GSK, Fidson Emerge Top Market Losers

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Nigerian Exchange Limited - Investors King

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.

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Crude Oil

Oil Holds Near Highest Since 2018 With Global Markets Tightening

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Crude Oil - Investors King

Oil held steady near the highest close since 2018, with the global energy crunch set to increase demand for crude as stockpiles fall from the U.S. to China.

Futures in London headed for a third weekly gain. Global onshore crude stocks sank by almost 21 million barrels last week, led by China, according to data analytics firm Kayrros, while U.S. inventories are near a three-year low. The surge in natural gas prices is expected to force some consumers to switch to oil, tightening the market further ahead of the northern hemisphere winter.

China on Friday sold oil to Hengli Petrochemical Co. and a unit of PetroChina Co. in the first auction of crude from its strategic reserves said traders with the knowledge of the matter. Grades sold included Oman, Upper Zakum and Forties.

Oil has rallied recently after a period of Covid-induced demand uncertainty, with some of the world’s largest traders and banks predicting prices may climb further amid the energy crisis. Global crude consumption could rise by an additional 370,000 barrels a day if natural gas costs stay high, according to the Organization of Petroleum Exporting Countries.

“Underpinning the latest bout of price strength is a tightening supply backdrop,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd.

Various underlying oil market gauges are also pointing to a strengthening market. The key spread between Brent futures for December and a year later is near $7, the strongest since 2019. That’s a sign traders are positive about the market outlook.

At the same time, the premium options traders are paying for bearish put options is the smallest since January 2020, another indication that traders are less concerned about a pullback in prices.

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Energy

Unlocking Investments into Africa’s Renewable Energy Market

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green energy - Investors King

The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT. 

The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.

Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.

In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.

Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustain­able energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.

The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.

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Energy

Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips

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Shell profit drops 44 percent

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.

“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.

Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.

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