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NSE: Shares Dip by 53.84% in Oct.

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  • NSE: Shares Dip by 53.84% in Oct.

The total volume of shares traded on the Nigerian Stock Exchange (NSE) in the month of October dipped by 53.84 per cent.

Statistics obtained from the exchange in Lagos on Wednesday showed that investors during the period traded 3.67 billion shares worth N32.02 billion transacted in 55,397 deals.

The statistics was lower than 7.95 billion shares valued at N47.39 billion achieved in 65,193 deals in September.

A further breakdown of the statistics indicated that the Financial Service Sector recorded the highest volume of activities, trading 2.59 billion shares worth N12.26 billion transacted in 22,698 deals.

Premium Board Sector came second with a total of 455.26 million shares valued at N4.53 billion achieved in 9,081 deals.

Conglomerates industry trailed with 244.46 million shares worth N434.95 million transacted in 2,326 deals, while Consumer Goods Sector sold 147.59 million shares valued at N7.62 billion in 9,735 deals.

NAN reports that the market capitalisation during the review period dropped by N384 billion or 3.95 per cent to close at N9.349 trillion, against N9.733 trillion achieved in September.

Also, the NSE All-Share Index lost 1,115.31 points or 3.94 per cent to close at 27,220.09 from 28,335.40 recorded in September due to profit taking.]

Forte Oil emerged as the worst performing stock during the period under review in percentage terms, dropping by 27.67 per cent or N45.90 to close at N120 per share against the month opening price of N165.90.

NAHCO trailed with a loss of 25.72 per cent or 0.89k to close at N2.57 per share against N3.46 it closed for the month of September.

Ashaka Cement lost 24.65 per cent or N4.01 to close at N12.26 against N16.27 achieved in September, while Glaxosmithkline lost 23.88 per cent or N4.68 to close at N14.92 compared with N19.60 in the preceding period.

Conversely, Caverton emerged the best performing stock in percentage terms, appreciating by 44.74 per cent to close at N1.10 per share compared with 76k it opened for the month.

Total garnered 16.95 per cent to close at N345 against N295 per share it opened trading for the month of September.

Okomu Oil increased by 13.29 per cent to close at N43.05 compared with N38 in September and Air Space rose by 10 per cent to close at N2.20 against N2 achieved in the previous month.

Some stakeholders attributed dismal performance of the market to unimpressive third results released by most quoted companies due to challenging economic environment.

Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said that disappointing  third quarter earnings affected the volume and value of shares during the period.

Kurfi said that the results declared by the companies were a true reflection of the economy, noting that Nestle’s inability to declare interim dividend is a reflection of the market downturn.

He stated that the market would likely maintain the negative trend in November because of  loss of confidence.

Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., described the month of October as a disappointment despite its being an earning season.

“The market performance for October was a disappointment to many investors being an earning season month expected to turn the market around,” Omordion said.

He explained that the poor corporate earnings, weak economic fundamentals and lack of concrete economic plan to pull the nation out of recession contributed to the market lull.

Omordion said that these challenges had led to fear and dwindling confidence of investors in the market which affected demand for equities.

He, however, expressed optimism that fund managers and some investors were expected to reposition their portfolios for yearend activities on the strength of some positive third quarter earnings.

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 Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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