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Market Rebounds, eTranzact, Learn Africa, Unilever, Others Appreciate

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NSE
  • Market Rebounds, eTranzact, Learn Africa, Unilever, Others Appreciate

The Nigerian Stock Exchange All-Share Index turned slightly positive in Wednesday’s session, halting a three-day loss as most key sectors closed positive.

The NSE ASI rose by 0.08 per cent as 20 stocks appreciated amid 17 losers.

A total of 159.989 million shares worth N1.741bn exchanged hands in 2,396 deals.

The NSE market capitalisation rose to N9.315tn from N9.307tn, while the ASI closed at 27,120.39 basis points from 27,098.52 basis points.

The consumer goods sector added the most points to the ASI following gains in Unilever Nigeria Plc by 4.6 per cent, Nigerian Breweries Plc by 0.34 per cent and Dangote Sugar Refinery Plc by 4.5 per cent.

The financial services sector inched 0.14 per cent higher amid advances in United Bank of Africa Plc by 1.67 per cent, Diamond Bank Plc by 2.73 per cent and Union Bank of Nigeria Plc by 0.44 per cent.

However, the industrial sector stocks closed flat, while the oil and gas sector dropped by o.65 per cent owing to a slide in Forte Oil Plc by 2.99 per cent.

Global markets traded mostly lower amidst a raft of disappointing earnings. Notably, Apple Incorporated posted its first full year revenue decline since 2001.

On what would shape the next trading session, analysts at Vetiva Capital Management Plc said, “We highlight that a couple of earnings of key stocks were released after the session close, and believe the market will open to investor reaction to these results in the session ahead.”

Meanwhile, the Central Bank of Nigeria held an Open Market Operation auction for a third successive day, selling N4.8bn and N49bn on the 183-day and 358-day bills (N30bn on offer for each) at respective stop rates of 18 per cent and 18.5 per cent (effective yields: 19.78 per cent and 22.60 per cent).

Despite this, the interbank call rate moderated a marginal 17 basis point to 10.50 per cent. At the foreign exchange interbank market, the naira depreciated N1.78 against the dollar to settle at N306.78 at the spot market whilst the one year forward rate remained unchanged at N348.14.

Bearish sentiment persisted in the Treasury bills space as yields climbed 22 basis points on average. Sell pressure was concentrated on the short-mid dated maturities with yields on the 22 day-to-maturity, 113DTM, and 148DTM bills rising to 16.12 per cent, 18.64 per cent, and 18.64 per cent, respectively.

The bond market also traded mildly bearish, with yields on benchmark bonds up two basis points on average. The largest advances were recorded on the 15.54 per cent FGN February 2020 and 14.20 per cent FGN March 2024 bonds, which rose four basis points each to settle at 14.99 per cent and 15 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

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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Crude Oil

Oil Prices Extend Gains to $64.32 Ahead of OPEC+ Meeting

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Oil Prices Rise to $64.32 Amid Expected Output Extension

Oil prices extended gains during the early hours of Thursday trading session amid the possibility that OPEC+ producers might not increase output at a key meeting scheduled for later in the day and the drop in U.S refining.

Brent crude oil, against which Nigeria oil is priced, gained 0.4 percent or 27 cents to $64.32 per barrel as at 7:32 am Nigerian time on Thursday. While the U.S West Texas Intermediate gained 19 cents or 0.3 percent to $61.47 a barrel.

“Prices hinge on Russia’s and Saudi Arabia’s preference to add more crude oil production,” said Stephen Innes, global market strategist at Axi. “Perhaps more interesting is the lack of U.S. shale response to the higher crude oil prices, which is favourable for higher prices.”

The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, are looking to extend production cuts into April against expected output increase due to the fragile state of the global oil market.

Oil traders and businesses had been expecting the oil cartel to ease production by around 500,000 barrels per day since January 2021 but because of the coronavirus risk and rising global uncertainties, OPEC+ was forced to role-over production cuts until March. Experts now expect that this could be extended to April given the global situation.

“OPEC+ is currently meeting to discuss its current supply agreement. This raised the spectre of a rollover in supply cuts, which also buoyed the market,” ANZ said in a report.

Meanwhile, U.S crude oil inventories rose by more than a record 21 million barrels last week as refining plunged to a record-low amid Texas weather that knocked out power from homes.

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