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PwC, LSEG Unveil Report as Market Eyes Gains

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  • PwC, LSEG Unveil Report as Market Eyes Gains

PwC Nigeria, a professional services firm, and the London Stock Exchange Group have unveiled the inaugural ‘Companies to Inspire Africa’ report with the top 59 Nigerian companies featuring in the report.

The report is the LSEG’s celebration of some of the fastest-growing and most dynamic privately-held companies in Africa. The research project was carried out in partnership with the PwC, Africa Development Bank Group, and CDC Group, PwC said.

This is coming as financial analysts anticipate increased market activity this week amid continued investor reaction to earnings releases. With most of the earnings announcement coming in better-than-expected, the Nigerian Stock Exchange All-Share Index is expected to open the new trading week in the green.

The NSE ASI closed the past week in the green zone, much in line with expectation, after returning 2.29 per cent week-on-week to bring the year-to-date return to -4.12 per cent.

There were 38 advancers and 25 laggards, with the market turnover and volume of transactions increasing by 50.13 per cent and 63.75 per cent, accordingly.

Meanwhile, in addition to identifying 343 companies from 42 African countries as the continent’s most exciting and dynamic firms, the PwC report examined in detail, the opportunities and challenges facing the companies’ growth, while looking at the sectors and trends that would shape the future of the African economy.

The report also highlighted strong company performances and the potential for the firms to become the next corporate champions powering Africa’s future economic and social development.

Fifty-nine Nigerian companies were named in the report, representing 17 per cent of the total number of companies in the report.

“This makes Nigeria the highest concentration of high-growth companies in Africa. Industry is the biggest sector to be represented in Nigeria, with 17 companies featuring on the list, closely followed by consumer services, where 11 providers have been selected, demonstrating the success of Nigeria’s efforts to diversify its economy,” PwC said in a statement.

The co-Head of Emerging Markets Strategy, LSEG, Ibukun Adebayo, said, “The 59 businesses from Nigeria show the strong base of successful growth companies in the country, and the potential for further growth, providing a vital platform for job creation and skills development.”

Also commenting on the report, the Country Senior Partner, PwC Nigeria, Uyi Akpata, said, “We are very proud to have partnered the LSEG on this first of its kind report. The report demonstrates the huge role that small and medium-sized enterprises are playing as the driving force behind African economies: developing skills, creating high quality jobs and delivering growth.

“For us as a firm, this also demonstrates our commitment to raising awareness about the unrivalled potential and opportunities in this market while also celebrating leading businesses adding value to the economy. We are optimistic that this will serve in educating investors and introducing them to the opportunities that these companies and countries may offer.”

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 Posts 2% Gain for the Week Despite India Virus Surge

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Oil prices steadied on Friday and were set for a weekly gain against the backdrop of optimism over a global economic recovery, though the COVID-19 crisis in India capped prices.

Brent crude futures settled 0.28% higher at $68.28 per barrel and U.S. West Texas Intermediate (WTI) crude advanced 0.29% to $64.90 per barrel.

Both Brent and WTI are on track for second consecutive weekly gains as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand.

In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity.

However, crude imports by the world’s biggest buyer fell 0.2% in April from a year earlier to 40.36 million tonnes, or 9.82 million barrels per day (bpd), the lowest since December.

In the United States, the world’s largest oil consumer, jobless claims have dropped, signalling the labour market recovery has entered a new phase as the economy recovers.

The recovery in oil demand, however, has been uneven as surging COVID-19 cases in India reduce fuel consumption in the world’s third-largest oil importer and consumer.

“Brent came within a whisker of breaking past $70 a barrel this week but failed at the final hurdle as demand uncertainty dragged on prices,” said Stephen Brennock at oil brokerage PVM.

The resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of the lost demand has been offset by countries such as China, where recent Labour Day holiday travel surpassed 2019 levels.

“Gasoline demand in the U.S. and parts of Europe is faring relatively well,” FGE said.

“Further out, we could see demand pick up as lockdowns are eased and pent-up demand is released during the summer driving season.”

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Commodities

Lagos Commodities and Futures Exchange to Commence Gold Trading

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With the admission of Dukia Gold’s diversified financial instruments backed by gold as the underlying asset, Lagos Commodities and Futures Exchange is set to commence gold trading.

According to Dukia Gold, the instruments will be in form of exchange-traded notes, commercial papers and other gold-backed securities, adding that it will enable the company to deepen the commodities market in Nigeria, increase capacity, generate foreign exchange for the Nigerian government to better diversify foreign reserves and create jobs across the metal production value chain.

Tunde Fagbemi, the Chairman, Dukia Gold, disclosed this while addressing journalists at Pre-Listing Media Interactive Session in Lagos on Thursday.

He said, “We are proud to be the first gold company whose products would be listed on the Lagos Futures and Commodities Exchange. The listing shall enable us facilitate our infrastructure development, expand capacity and create fungible products.

“This has potential to shore up Nigeria’s foreign reserve and create an alternative window for preservation of pension funds. A gold-backed security is a hedge against inflation and convenient preservation of capital.”

“As a global player, we comply with the practices and procedures of London Bullion Market Association and many other international bodies. Our refinery will also have multiplier effects on the development of rural areas anywhere it is located,” he added.

Mr Olusegun Akanji, the Divisional Head, Strategy and Business Solutions, Heritage Bank, said the lender had created a buying centre for verification of quality and quantity of gold and reference price to ensure price discovery in line with the global standard.

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Crude Oil

Oil Nears $70 as Easing Western Lockdowns Boost Summer Demand Outlook

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Crude oil

Oil prices rose for a third day on Wednesday as easing of lockdowns in the United States and parts of Europe heralded a boost in fuel demand in summer season and offset concerns about the rise of COVID-19 infections in India and Japan.

Brent crude rose 93 cents, or 1.4%, to $69.81 a barrel at 1008 GMT. U.S. West Texas Intermediate (WTI) crude rose 85 cents, or 1.3%, to $66.54 a barrel.

Both contracts hit the highest level since mid-March in intra-day trade.

“A return to $70 oil is edging closer to becoming reality,” said Stephen Brennock of oil broker PVM.

“The jump in oil prices came amid expectations of strong demand as western economies reopen. Indeed, anticipation of a pick-up in fuel and energy usage in the United States and Europe over the summer months is running high,” he said.

Crude prices were also supported by a large fall in U.S. inventories.

The American Petroleum Institute (API) industry group reported crude stockpiles fell by 7.7 million barrels in the week ended April 30, according to two market sources. That was more than triple the drawdown expected by analysts polled by Reuters. Gasoline stockpiles fell by 5.3 million barrels.

Traders are awaiting data from the U.S. Energy Information Administration due at 10:30 a.m. EDT (1430 GMT) on Wednesday to see if official data shows such a large fall.

“If confirmed by the EIA, that would mark the largest weekly fall in the official data since late January,” Commonwealth Bank analyst Vivek Dhar said in a note.

The rise in oil prices to nearly two-month highs has been supported by COVID-19 vaccine rollouts in the United States and Europe.

Euro zone business activity accelerated last month as the bloc’s dominant services industry shrugged off renewed lockdowns and returned to growth.

“The partial lifting of mobility restrictions, the expectation that tourism will return in the near future, and the lure of the psychologically important $70 mark are all likely to have contributed to the price rise,” Commerzbank analyst Eugen Weinberg said.

This has offset a drop in fuel demand in India, the world’s third-largest oil consumer, which is battling a surge in COVID-19 infections.

“However, if we were to eventually see a national lockdown imposed, this would likely hit sentiment,” ING Economics analysts said of the situation in India.

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