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Stock Market Sustains Positive Run for the Second Day



  • Stock Market Sustains Positive Run for the Second Day

The Nigerian equities market closed on a positive note for the second day yesterday as the Nigerian Stock Exchange All-Share Index (NSE ASI) rose 0.09 per cent to close at 25,265.08. The market had rebounded the previous day to halt five days losing streak following the activities of bargain hunters. The positive run was sustained yesterday with the NSE ASI rising by 0.09 per cent to be at 25,265.08, while market capitalisation added N2.2 billion to close at N8.7 trillion.

However, analysts at Cordros Capital Limited said the marginal gains of the past two days , despite the huge sell-off experienced last month, do not point to sustainable recovery.

According to analysts at Meristem Securities Limited, performance of the market was driven mostly by bargain hunting on selected stocks and buy sentiments towards the oil and gas stocks, following OPEC’s decision to cut crude oil output by 1.2mbpd on Monday.

“We expect this trend to persist for the rest of the week,” they said.
In line with the renewed interest in oil and gas stocks, Mobil Oil led the price gainers for the fourth consecutive day, rising by 10.2 per cent. Similarly, Forte Oil Plc added 10.2 per cent, just as Oando Plc garnered 4.8 per cent. Outside the oil and gas sector, Portland Paints chalked up 9.2 per cent, while Okomu Oil Palm added 5.0 per cent.

In terms of performance across the sectors, two sectors appreciated, while three declined. Obviously, the NSE Oil & Gas Index led with 3.0 per cent driven by sustained rally in Mobil Oil Nigeria, Oando Plc as well as bargain hunting in Forte Oil Plc. The NSE Banking Index followed, advancing 0.3 per cent on account of renewed buying interest in Guaranty Trust Bank Plc (+0.7 per cent), Wema Bank Plc(+1.9 per cent) and United Bank for Africa Plc(+0.2 per cent).

Analysts at FSDH Research recently said many banking stocks are trading at huge discounts compared to their peers in other jurisdictions.

Conversely, the NSE Consumer Goods Index fell 0.5 per cent on the back of decline in Nigerian Breweries Plc (-1.4 per cent) while the NSE Insurance Index slid 0.1 per cent as a result of profit-taking in WAPIC Insurance Plc (-2.8 per cent). Similarly, the NSE Industrial Goods Index shed 0.04 per cent.

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.

Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday



Crude oil

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




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



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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