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NSE Index Rises 0.98% as Investors Swoop on Oil Stocks

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  • NSE Index Rises 0.98% as Investors Swoop on Oil Stocks

A significant rally in oil and gas stocks assisted to extend gains at the stock market to the fourth session as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose 0.98 per cent to close at 26,071.16.

The market had last week sustained a positive momentum to close higher for the second consecutive week, rising by 0.30 per cent. That uptrend followed investors’ swoop on undervalued and fairly priced stocks after the selloffs experienced in November.

When the market resumed yesterday, the bulls maintained their control of the market driven by a significant rally in oil and gas stocks as investors reacted to a jump in crude oil prices to an 18-month high – supported by strong demand in Asia and supply cuts by Abu Dhabi, Kuwait and Qatar as part of production curbs organised by OPEC and other exporters. Yesterday’s performance pushed the month-to-date growth in NSE ASI to 3.05 per cent.

Seplat Petroleum Development Company Plc and Forte Oil Plc led the price gainers with 10.2 apiece to close at N374.85 and N117.11 respectively. Champion Breweries Plc followed with 9.6 per cent, while Dangote Flour Mills Plc went up by 7.6 per cent.

Oando Plc and Total Nigeria Plc appreciated 6.7 per cent and 5.0 per cent in that order.

Neimeth International Pharmeuticals Plc, Honeywell Flour Mills Plc and Transcorp Plc chalked up by 5.0 per cent, 4.7per cent, 4.7 per cent respectively. In all, 23 stocks appreciated while 14 stocks depreciated.

Conversely, Avoncrowncaps Plc led the price losers with 5.0 per cent, trailed by Portland Paints and Products Nigeria Plc with 4.8 per cent. Union Bank of Nigeria Plc, AXA Mansard Insurance Plc, Fidson Healthcare Plc and Fidelity Bank Plc shed 4.7 per cent, 4.6 per cent and 3.4 per cent in that order.

In terms of sectoral performance, the NSE Oil & Gas Index led with 6.3 per cent on the back of increased buying interest in Seplat and Forte Oil while the NSE Industrial Goods Index gained 0.9 per cent. The NSE Banking Index rose by 0.7 per cent as gains in Guaranty Trust Bank (+2.0 per cent) and Access Bank (+2.0 per cent) buoyed the sector. Contrarily, the NSE Insurance Index declined 0.7 per cent as losses in AXA Mansard (-4.7 per cent) and WAPIC Insurance Plc (-2.0 per cent) impacted sector performance. The NSE Consumer Goods Index shed 0.02 per cent.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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