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NSE Records Lowest Trading Volume This Year



  • NSE Records Lowest Trading Volume This Year

The Nigerian Stock Exchange recorded the lowest trade volume this year after the NSE All-Share Index trended lower for the third consecutive session on Wednesday amid cautious trading, with the key sectors making losses.

A total of 81.913 million shares worth N592.5244m were traded in 2,520 deals, as against 154.161 million shares that were traded on Tuesday.

The NSE market capitalisation dropped to N9.438tn on Wednesday from N9.464tn the previous day, while the ASI plunged to 27,4478.04 basis points from 27,555.31 basis points.

The oil and gas sector continued to lead market declines following 7.67 per cent loss in the shares of Forte Oil Plc; Total Nigeria Plc, 4.6 per cent; and Oando Plc,1.37 per cent

The consumer goods and financial services sectors’ stocks posted less significant losses with International Breweries Plc’s shares dropping by 4.95 per cent; Cadbury Nigeria Plc, 2.33 per cent; Wema Bank Plc, 3.17 per cent; and FCMB Group Plc, 2.68 per cent.

The industrial goods sector, however, posted another positive performance on the back of advances by CAP Plc at 1.5 per cent and sustained gains by Lafarge Africa Plc at 0.7 per cent.

The market breadth remained negative with 13 advances and 24 declines.

Commenting on the market trend, analysts at Vetiva Capital Management Plc said, “Given the traditionally high market trades during earnings seasons, we find Wednesday’s extraordinarily low market volume quite surprising; Monday’s volume was also significantly low.

“This suggests that investors maintain a wait-and-see approach this season, hence, we expect the recent bearish trend to persist.”

The interbank call rate plummeted to 18.92 per cent from the previous 151.67 per cent, as the Central Bank of Nigeria concluded recent secondary market intervention sales (with the results yet to be announced). At the foreign exchange interbank market, the naira appreciated by 25 kobo to close at N304.75, while the one-year forward rate remained unchanged at N355.

Vastly improved system liquidity instigated bullish sentiment across fixed income markets in Wednesday’s trading. In the Treasury bills market, yields declined by 50 basis points on average amidst strong buying momentum on short-dated bills.

In particular, the yields on the 15-day-to-maturity, 43DTM and 92DTM bills retreated to 16.82 per cent, 15.22 per cent, and 14.05 per cent, respectively.

Similarly, the bond market turned bullish as yields on benchmark bonds moderated by 10 basis points on the average.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


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




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



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




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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