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Goldman Sachs Pick Stocks of Shell, BP and Other European Integrated Majors to Rally by 50% in 2021

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Goldman Sachs Says Shell, BP and Other European Integrated Majors Stocks Will Rally Over by 50% this Year

Goldman Sachs, one of the world’s leading investment banks, has picked oil stocks expected to rally by over 50 percent in 2021 as economies gradually reopen and the transport market recovers.

Analysts at the world-leading investment bank said a strong recovery is expected from the sector in the second half of the year.

As we look farther into 2021, we believe that the combination of oil price recovery, improving downstream margins and cost-cutting will trigger the beginning of a positive earnings revision cycle for the European integrated majors,” Goldman’s analysts led by Michele Della Vigna wrote in a note published this week.

Goldman Sachs said BP has the highest upside potential, largely due to its huge exposure to transportation oil demand, the net-zero pledge and the possibility of share buybacks.

The company also stated that BP’s ADRs listed on the New York Stock Exchange has the potential to rally as much as 60 percent in the next 12 months while the London-listed could do 54 percent.

It further stated that Shell’s stock could rally by 30 percent, France’s Total could jump by 26 percent, Repsol of Spain could do 18 percent, and Italy’s Eni by 15 percent.

Goldman Sachs added that “A transportation recovery can reignite momentum for the underlying commodity and Big Oils equities, which we expect could be one of the key recovery/value trades in the coming months.”

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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Bonds

African ESG Bond Issuance Surges to $4.4bn in 2024

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The landscape of sustainable investment in Africa is experiencing a significant upswing as the issuance of Environmental, Social, and Governance (ESG) bonds by African entities hit $4.4 billion in 2024.

This substantial increase highlights a growing commitment among African institutions to raise funds for investments aligned with ESG principles.

The surge in ESG bond issuance underscores a broader trend towards responsible and sustainable investing on the continent.

The African Development Bank (AfDB) emerges as a key player in this segment, having successfully issued social bonds worth $2 billion in January 2024, in addition to hybrid sustainable bonds amounting to $750 million.

Joining the AfDB in this endeavor is the Arab Bank for Economic Development in Africa (BADEA), which, with the support of the African Export-Import Bank, has issued bonds totaling €500 million.

This momentum in the ESG bond market has propelled financial institutions like BNP Paribas, JPMorgan, and Bank of America Securities into leading positions as arrangers for such bonds on the continent.

The surge in ESG bond issuance reflects a broader global trend towards sustainable finance, with the total value of emissions of this kind expected to reach $950 billion in 2024, according to Moody’s.

It is evident that ESG bonds are gaining traction in Africa, supported by development finance institutions and initiatives aimed at fostering sustainable economic growth and development across the continent.

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Nigerian Exchange Limited

Nigerian Exchange Extends Bullish Run as Investors Gain N2.123 Trillion Last Week

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Nigerian Exchange Limited - Investors King

The Nigerian Exchange Limited (NGX) extended its bullish run last week as investors gained N2.123 trillion following a N3.258 trillion profit reported in the previous week.

During the week, investors exchanged 1.773 billion shares worth N52.867 billion in 44,713 deals, against a total of 2.157 billion shares valued at N108.824 billion that exchanged hands in 51,556 deals in the previous week.

The Financial Services Industry led the activity chart with 1.136 billion shares valued at N23.185 billion traded in 19,896 deals. Therefore, contributing 64.04% and 43.86% to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 339.390 million shares worth N5.874 billion in 3,650 deals.

The third place was the Consumer Goods Industry, with a turnover of 82.645 million shares worth
N6.724 billion in 6,155 deals.

Transnational Corporation Plc, Guaranty Trust Holding Company Plc and Access Holdings Plc were the three most traded equities and accounted for a combined 677.439 million shares worth N17.287 billion in 7,789 deals. The three equities contributed 38.21% and 32.70% to the total equity turnover volume and value respectively.

The NGX All-Share Index appreciated by 3.71% or 3,754.40 index points from 101,330.85 index points reported in the previous week to 105,085.25 index points last week.

The market capitalization rose by 3.71% to close the week at N59.416 trillion, up from N57.293 trillion filed in the previous week.

Similarly, all other indices finished higher with the exception of NGX Oil and Gas and NGX Sovereign Bond which depreciated by 0.11% and 3.12% respectively.

Fifty-five equities appreciated in price during the week higher than twenty-two equities in the previous week. Twenty-four equities depreciated in price lower than fifty-six in the previous week, while seventy-five equities remained unchanged, lower than seventy-six recorded in the previous week.

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Stock Market

US Equity Funds Fueled by Record $56 Billion Inflows Amid Stagflation Concerns

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Dow

Despite looming concerns over stagflation, US equity funds have experienced an unprecedented surge as $56 billion inflows into the market.

Bank of America Corp. revealed the influx, underscoring investors’ apparent dismissal of the risks associated with the economic phenomenon.

The influx, reported by strategist Michael Hartnett, cited data from EPFR Global and highlighted a remarkable turnaround for technology stocks, which witnessed the largest inflow among sectors, tallying $6.8 billion.

This resurgence follows a previous record outflow, indicating a notable shift in sentiment among investors.

However, amidst this bullish wave, Bank of America Corp. strategist Michael Hartnett has sounded a cautionary note, noting the shift in the macroeconomic landscape from a Goldilocks scenario to one potentially characterized by stagflation.

Stagflation, marked by high inflation and stagnant economic growth, poses a significant threat to traditional asset classes.

Hartnett’s observations are not without merit, as economic data presents a mixed picture. While prices paid to US producers exceeded forecasts in February and consumer prices rose briskly, fewer people applied for jobless benefits.

Such contradictions underscore the complexity of the economic environment investors currently navigate.

Yet, despite the ominous signs, US equity markets seem undeterred, with Barclays Plc strategist Emmanuel Cau noting that investors maintain a positive outlook, bolstered by the Federal Reserve’s endorsement of market expectations.

Cau points to a prevailing narrative of a soft landing, further fueled by ample liquidity awaiting deployment into risk assets.

As the markets continue to grapple with the specter of stagflation, the resilience of US equity funds in the face of such concerns reflects a potent cocktail of investor optimism and risk appetite, tempered by cautious optimism amidst an uncertain economic landscape.

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