- Stockbrokers to Brainstorm on National Economic Growth
Stockbrokers and other major stakeholders in the Nigerian economy will take a long view of the post-election period to chart ways for sustainable national growth and development.
At the 22nd annual conference of the Chartered Institute of Stockbrokers (CIS) scheduled for next week in Lagos, financiers and economic experts will dissect critical issues that must be addressed to attract both domestic and global investors to the Nigerian capital market and build a strong capital base for national growth.
Addressing capital market correspondents yesterday in Lagos, Chairman, Conference Committee of CIS, Mrs Lilian Olubi said this year’s conference was designed to address developmental issues that would move the market to the next level.
According to her, the growth of the Nigerian economy largely influences the growth within the capital market, thus key policies already designed by the government and associated authorities would be worthy of consideration.
“Nigeria and all stakeholders have cast focus to the 2019 general elections which is already fast approaching. The end of the election will either retain the incumbent who will be focused on improving his achievements in his first four years or produce a new government that may likely develop new framework to achieve his own ambition. Regardless of the outcome, it is apparent that focus would be on improving the Nigerian economy, thus we deem it fit to also channel discussions what the focus should be after 2019 elections,” Olubi said.
She added that regulatory approach to capital market architecture would also form a vital part of discussion at the conference noting that a digital economy has been a key driver of growth in major developments markets across the world.
“Digitization of activities and transactions has helped to boost market depth, investor participation and seamless operations. In Nigeria, FINTECHs are fast becoming a tool for pooling retail savings, executing similar technology to pool retail investments would help boost investor participation,” Olubi said.
First Vice President, Chartered Institute of Stockbrokers (CIS), Mr Olatunde Amolegbe said the annual conference has remained a major platform where capital market regulators, top-level government functionaries and members of the Organized Private Sectors discuss issues that affect the economy and the way forward.
He noted that leaders of shareholders’ associations are usually invited to the conference for their inputs as part of stakeholders in the capital market ecosystem
Commenting on low level of product development by stockbrokers, a member of the Conference Committee, Mr Akeem Oyewale said it was not for lack of ideas or unwillingness but due to regulatory issues such as taxation and its effects on finance business in Nigeria.
He noted that the annual conference allows capital market operators and regulators to continually explore ways to resolve issues and ways to development the market and the economy generally.
Registrar and Chief Executive Officer, Chartered Institute of Stockbrokers (CIS), Mr Adedeji Ajadi said the annual conference has been contributing to national policy making pointing out that many government’s policies had emanated from the previous conferences of the institute.
Ajadi cited the concepts and ideas of debt resolutions and forbearance that led to the creation of the Asset Management Corporation of Nigeria (AMCON) as part of the gains of the annual conference.
Oil Prices Recover Slightly Amidst Demand Concerns in U.S. and China
Oil Prices Continue Slide as Market Skepticism Grows Over OPEC+ Cuts
Global oil markets witnessed a continued decline on Wednesday as investors assessed the impact of extended OPEC+ cuts against a backdrop of diminishing demand prospects in China.
Brent crude oil, the international benchmark for Nigerian crude oil, declined by 63 cents to $76.57 a barrel while U.S. WTI crude oil lost 58 cents to $71.74 a barrel.
Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed to maintain voluntary output cuts of approximately 2.2 million barrels per day through the first quarter of 2024.
Despite this effort to tighten supply, market sentiment remains unresponsive.
“The decision to further reduce output from January failed to stimulate the market, and the recent, seemingly coordinated, assurances from Saudi Arabia and Russia to extend the constraints beyond 1Q 2024 or even deepen the cuts if needed have also fallen to deaf ears,” noted PVM analyst Tamas Varga.
Adding to the unease, Saudi Arabia’s decision to cut its official selling price (OSP) for flagship Arab Light to Asia in January for the first time in seven months raises concerns about the struggling demand for oil.
Amid the market turmoil, concerns over China’s economic health cast a shadow, potentially limiting fuel demand in the world’s second-largest oil consumer.
Moody’s recent decision to lower China’s A1 rating outlook from stable to negative further contributes to the apprehension.
Analysts will closely watch China’s preliminary trade data, including crude oil import figures, set to be released on Thursday.
The outcome will provide insights into the trajectory of China’s refinery runs, with expectations leaning towards a decline in November.
Russian President Vladimir Putin’s diplomatic visit to the United Arab Emirates and Saudi Arabia has added an extra layer of complexity to the oil market dynamics.
Discussions centered around the cooperation between Russia, the UAE, and OPEC+ in major oil and gas projects, highlighting the intricate geopolitical factors influencing oil prices.
U.S. Crude Production Hits Another Record, Posing Challenges for OPEC
U.S. crude oil production reached a new record in September, surging by 224,000 barrels per day to 13.24 million barrels per day.
The U.S. Energy Information Administration reported a consecutive monthly increase, adding 342,000 barrels per day over the previous three months, marking an annualized growth rate of 11%.
The surge in domestic production has led to a buildup of crude inventories and a softening of prices, challenging OPEC⁺ efforts to stabilize the market.
Despite a decrease in the number of active drilling rigs over the past year, U.S. production continues to rise.
This growth is attributed to enhanced drilling efficiency, with producers focusing on promising sites and drilling longer horizontal well sections to maximize contact with oil-bearing rock.
While OPEC⁺ production cuts have stabilized prices at relatively high levels, U.S. producers are benefiting from this stability.
The current strategy seems to embrace non-OPEC non-shale (NONS) producers, similar to how North Sea producers did in the 1980s.
Saudi Arabia, along with its OPEC⁺ partners, is resuming its role as a swing producer, balancing the market by adjusting its output.
Despite OPEC’s inability to formally collaborate with U.S. shale producers due to antitrust laws, efforts are made to include other NONS producers like Brazil in the coordination system.
This outreach aligns with the historical pattern of embracing rival producers to maintain control over a significant share of global production.
In contrast, U.S. gas production hit a seasonal record high in September, reaching 3,126 billion cubic feet.
However, unlike crude, there are signs that gas production growth is slowing due to very low prices and the absence of a swing producer.
Gas production increased by only 1.8% in September 2023 compared to the same month the previous year.
While the gas market is in the process of rebalancing, excess inventories may persist, keeping prices low.
The impact of a strengthening El Niño in the central and eastern Pacific Ocean could further influence temperatures and reduce nationwide heating demand, impacting gas prices in the coming months.
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