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Inflation Debate Volatility Will Shape Markets for the Rest of 2021: deVere CEO

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Inflation - Investors King

Inflation debate volatility will define stock markets in the second half of 2021, and investors need to be “super-selective” and ensure “proper diversification,” to take advantage of the turbulence, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The warning from Nigel Green, deVere Group CEO and founder, comes ahead of the release of inflation figures for the biggest economy in the world.

The U.S. CPI is predicted to rise to a 13-year high of 4.7% from a year earlier, up from 4.2% in April – which was already the fastest jump since 2008.

Mr Green says: “Global financial markets are bracing for further turbulence as attention focuses on inflation for the world’s largest economy.

“A larger-than-expected rise in U.S. core inflation and a retreat in commodities and equities may result in a sharp increase in volatility across most asset classes.

“It will stir fears that central banks will be forced to row back from policies that have kept interest rates low, driven liquidity and provided fuel for the stock market gains.”

He continues: “If inflation is lower than expected, the rising prices will more likely be seen as transient, and that they will fade after pent-up consumer spending drops back and the supply bottlenecks ease.

“Either way, today’s inflation figures won’t end the debate amongst investors – in fact, it will get hotter – as it remains too early to say either way about whether inflation is transient or persistent.

“This debate will stir-up volatility which will define the second half of 2021 in global financial markets.”

This market turbulence demands that “investors ensure proper diversification of their portfolios” if they are “serious about creating, building and safeguarding wealth,” says Mr Green.

Diversification is universally regarded as investors’ best tool to mitigate risk and seize opportunities. A sufficiently diversified portfolio covers geographical regions, asset classes, sectors and currencies.

The deVere CEO goes on to add: “We can expect a stronger than had previously been forecast global economic rebound this year, particularly in developed economies.

“We are likely to see the fastest growth in decades – and investors will want to capitalise on this.

“But as the world readjusts investors must be super-selective as there will be ongoing volatility.

“We saw this last month with the tech sell-off – although nobody seriously believes the future isn’t going to be tech-driven.  As such savvy investors were drawn to the massive growth that tech offers and used the sell-off as a buying opportunity.”

Mr Green concludes: “This is a major day for the markets. The inflation argument is here to stay for at least the rest of 2021, stirring up volatility. Investors need to shore-up their portfolios to seize the opportunities that this will provide.”

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 Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns

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Crude oil

Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.

Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.

The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.

This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.

While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.

Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.

Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.

Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.

Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.

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Crude Oil

Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm

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Dangote Refinery

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.

Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.

The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.

However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.

Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.

He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.

Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.

The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.

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Energy

NNPCL Pledges End to Nigeria’s Energy Scarcity Within a Decade

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Mele Kyari - Investors King

The Nigerian National Petroleum Company Limited (NNPCL) has announced a bold initiative aimed at ending Nigeria’s persistent energy scarcity within the next decade.

Mele Kyari, the Group Chief Executive Officer of NNPCL, revealed this ambitious plan during the opening ceremony of the seventh Nigerian International Energy Summit in Abuja.

Kyari’s announcement comes as a beacon of hope for millions of Nigerians grappling with chronic power shortages and energy deficiencies.

In his statement, Kyari expressed confidence that all issues related to energy scarcity in the country would be resolved within the next 10 years.

Assuring stakeholders of NNPCL’s unwavering commitment, Kyari emphasized the company’s dedication to collaborating with partners to bridge the energy deficit gap and foster prosperity for all Nigerians.

He highlighted NNPCL’s pivotal role as a key partner to oil-producing companies in Nigeria, facilitating the divestment of international oil companies from onshore and shallow water assets in the country.

Furthermore, Kyari underscored NNPCL’s statutory mandate as the enabler of national energy security, emphasizing the importance of sustainable production from divested assets to ensure energy security for Nigerians.

In addition to addressing domestic energy challenges, NNPCL is also exploring avenues for sustainable energy investment across Africa.

Kyari revealed the company’s intention to invest in the proposed African Energy Bank, aiming to secure funding for energy projects on the continent and guarantee regional energy security.

The event, attended by prominent stakeholders including government officials and representatives from international organizations, marks a significant step towards reshaping Nigeria’s energy landscape and fostering economic development through improved energy access.

As NNPCL charts its course towards energy abundance, Nigerians remain cautiously optimistic about the prospects of a brighter energy future.

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