Forex

European Shares Jump Into June as Italy Reaches Government Deal

Published

6 years ago

June 4, 2018

European Shares Jump Into June as Italy Reaches Government Deal

European shares breathed a sigh of relief on Friday with Italian stocks supported after a deal to form a coalition government ended three months of political deadlock and removed the risk of another general election.

The pan-European STOXX 600 index rose 1 percent, while German stocks .GDAXI gained 0.9 percent and Britain’s FTSE 100 .FTSE rose 0.3 percent.

Italian stocks .FTMIB rallied as much as 2.9 percent, the standout performers in Europe as Italian banks .FTIT8300 gained 3.8 percent. Recent political uncertainty has roiled Italian stocks, resulting in a slide of more than 9 percent for the Italian benchmark in May, its worst month since June 2016.

Giuseppe Conte was sworn in on Friday as Italy’s prime minister, heading western Europe’s first anti-establishment government. Investors had feared that a repeat vote could become a proxy referendum on Italy’s euro membership.

Shares in Italian banks Banco BPM (BAMI.MI), BPER (EMII.MI), UBI (UBI.MI) and Intesa Sanpaolo (ISP.MI) were among the biggest risers on the STOXX, up between 3.3 percent to 8.5 percent after sustaining heavy losses in the previous month.

However, some market watchers remained cautious given that Italy’s anti-establishment parties, the League and the 5-Star Movement, are planning to spend big.

“Pending better visibility on the new government’s actions, Italian assets may continue to price in some policy uncertainty,” Matteo Ramenghi, chief investment officer UBS WM Italy, said in a note.

Italian shares ended off highs, weighed down by a Reuters report that EU lawmakers from the two parties forming its new government coalition backed this week a rejected proposal to set up funds to help countries quit the euro.

A trader at a European bank said the decline was also triggered by tecnhnical factors and a 4.5 percent slump in Fiat Chrysler (FCHA.MI) shares.

Fiat Chysler’s departing CEO Sergio Marchionne delivered a plan to ramp up sport utility vehicles and invest 9 billion euros in electric and hybrid cars in a bid to double operating profit by 2022. Some investors who had expected news about possible spin offs were disappointed.

Elsewhere Spanish equities .IBEX rose 1.8 percent after Spanish socialist Pedro Sanchez was catapulted to power, taking over as prime minister from veteran conservative Mariano Rajoy, who lost a no-confidence vote in the wake of a corruption scandal.

Away from politics, semiconductor stocks were a weak spot after shares in Dialog Semiconductor (DLGS.DE) plunged 15 percent. The chipmaker said that Apple was planning on cutting smartphone power chip orders, which will shave 5 percent off Dialog’s 2018 revenues.

Peer AMS (AMS.S) declined before recovering losses to end down 0.6 percent.

“Becoming more positive for the investment case remains difficult due to the uncertainty related to the company’s Apple business,” analysts at Baader Helvea said in a note.

Dialog’s shares have slumped nearly 40 percent so far in 2018, following a loss of 35 percent in 2017.

Elsewhere shares in Deutsche Bank (DBKGn.DE) recovered some of the previous session’s heavy losses, climbing 2.8 percent higher following Thursday’s drop of more than 7 percent in the after a report that the U.S. Federal Reserve last year designated the bank’s U.S. operations to be in “troubled condition”.

On Thursday, S&P downgraded Deutsche Bank’s credit rating to BBB+ from A-

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Naira

Nigerian Naira Falls to N1,641.27 Amid Improved FX Supply

Published

2 days ago

October 12, 2024

Iyanuoluwa Martins

The Naira closed the week weaker against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, October 11 to N1,641.27/$1, as the local currency lost 1.15 per cent at the specialised window, according to data obtained from FMDQ Securities Exchange.

The week’s closing value was down N18.70 compared to N1,622.57/$1 published in the preceding session on Thursday.

There was a surge in turnover recorded on Friday as secondary data showed an aggregate of $616.73 million cleared on record, compared to $145.56 million, a rise of $471.17 million or 323.7 per cent.

This is more than $543.5 million announced by the Central Bank of Nigeria (CBN) announced that it sold to authorised dealer local deposit money banks (DMBs) to reduce observed market volatility driven by high demand for commodity imports and seasoned demand for FX between September 6 and 30, 2024.

The rise in supply could be a result of fresh CBN intervention in the market after it had paused for the past two weeks.

In a different pattern, the local currency closed flat against the Pound Sterling and the Euro in the week’s closing session at the official FX market.

Trading against the British currency, the local currency closed at N2,126.26/£1 while it closed at the rate of N1,772.69/€1 against the Euro.

In the Parallel market, the Naira gained on the American currency as it closed at N1,673.54 to the US Dollar, a rise of 94 Kobo compared to N1,674.48/$1 it closed during the Wednesday trading session.

The Naira strengthened its value against the Pound Sterling in the official market by N3.70 to sell at N2,136.68/£1 compared with the preceding session’s N2,140.38/£1 and followed the same pattern against the Euro as it appreciated N7.54 to quote at N1,830.29/€1 versus the previous day’s rate of N1,837.83/€1.

The local currency also appreciated N8.59 to close at N1,202.47 per Canadian Dollar, compared to Wednesday’s N1,211.06 per CAD.

Naira

Naira Records Marginal Rise on Dollar as Supply Weakens

Published

3 days ago

October 11, 2024

Iyanuoluwa Martins

The Naira exchange rate improved slightly in the official forex market as the Central Bank of Nigeria (CBN) failed to resume the retail Dutch auctions again.

The Naira rose by 0.16 percent on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) to exchange at N1,622.57/$1 on Thursday, October 10 amid a further drop in supply at the official market.

The local currency rose on the greenback by N2.56 versus N1,625.13/$1 which it closed at the previous session on Wednesday.

Demand for foreign currency continues to overshadow FX liquidity, leaping exchange rate movement tight across the markets.

Data showed a decline in supply as the turnover published on the FMDQ Group website stood at $145.56 million. This indicated that the session’s turnover fell by 14.7 percent, indicating an appreciation of $25.04 million compared to the $170.60 million published in the last trading session.

Meanwhile, the Naira witnessed losses against the Pound Sterling and the Euro. The domestic currency made a N41.18 slide on the British currency to wrap the penultimate session at N2,126.26/£1 from N2,085.08/£1 that it sold at the previous session.

In the same trend, against the Euro, the Nigerian currency closed at N1,772.69/€1 versus N1,746.58/€1, indicating an N26.11 depreciation.

In the Parallel market, the Naira closed at N1,674.48 to the US Dollar, a difference of N22.32 compared to N1,652.16 it closed during the Wednesday trading session.

The gap between official and parallel market rates had crossed N120 in the recent past until the Central Bank of Nigeria FX intervention which has brought the gap within N50-N60 on the greenback.

The Naira weakened its value against the Pound Sterling in the official market by N27.19 to sell at N2,140.38/£1 compared with the preceding session’s N2,113.19/£1.

It followed the same route against the Euro as it appreciated N22.57 to quote at N1,837.83/€1 versus the previous day’s rate of N1,815.26/€1.

The local currency also pulled a N4.66 depreciation to close on the Canadian Dollar at N1,211.06 against Wednesday’s N1,206.40 per CAD.

Naira

Naira Gains on Dollar at Black Market, Falls at Official FX Market

Published

4 days ago

October 10, 2024

Iyanuoluwa Martins

The Naira strengthened on the US Dollar at the black market but went the other route in the official market on Wednesday, October 9.

The local currency gained N15.23 from the N1,667.39 it closed in the previous session to settle at N1,652.16 at the black market on Wednesday.

At the Nigerian Autonomous Foreign Exchange Market (NAFEX), the local currency lost N63.37 or 4.1 percent to close at N1,625.13/$1, weaker from N1,561.76/$1 it closed on Tuesday.

The daily supply of FX as measured by secondary data from FMDQ Securities Exchange Limited indicated that turnover slumped by $83.08 million or 32.7 percent to $170.60 million from $253.68 million.

The decline in supply comes as the Central Bank of Nigeria (CBN) eased with the latest data indicating that the country is not making enough foreign earnings.

For instance, Foreign Direct Investment into Nigeria in the second quarter of 2024 dropped to $29.83 million, a 65.33 percent drop compared to the $86.03 million recorded in the same period last year.

The development marks the lowest level in the last ten years.

It also reflected in both portfolio investments and foreign currency loans as Nigeria’s foreign portfolio investments for Q2 2024 stood at $1.40 billion, marking a sharp decline of 74.97 percent from $5.60 billion recorded in the preceding quarter, and a 65.3 percent drop compared to the $4.05 billion reported in Q2 2023.

Similarly, foreign loans, which constitute a substantial portion of Nigeria’s capital importation, recorded an inflow of $1.15 billion in Q2 2024, reflecting a 74.98 percent decrease from $4.60 billion in Q1 2024.

However, the Naira strengthened its value against the Pound Sterling in the official market by N46.54 to sell at N2,085.08/£1 compared with the preceding session’s N2,131.62/£1.

It followed the same route against the Euro as it appreciated N42.40 to quote at N1,746.58/€1 versus the previous day’s rate of N1,788.98/€1.

The local currency also recorded a gain on the UK Pound Sterling in the black market, the Naira rose to N2,113.19 an N18.94 gain from N2,132.13 and on the Euro, the Naira pulled an N18.37 appreciation to close at N1,815.26 versus N1,833.63 and added 53 cents on the Canadian Dollar to close at N1,206.40 against Monday’s N1,206.93 per CAD.