Connect with us

Markets

Election 2019: Nigeria’s Stock Market May Rally if President Buhari Loses – Analysts

Published

on

Nigerian stock market

Indications have emerged that the Nigeria’s stock market may rally if President Muhammadu Buhari loses this weekend’s election.

As contained in a report by Bloomberg which quoted analysts at citigroup, the Nigerian stock market will recover, ending a run that has seen it fall more than any other in the world in dollar terms since President Buhari came to office in May 2015.

According to the report, some foreign investors would prefer a government led by ex-Vice President and businessman, Atiku Abubakar.

However, while Atiku has pledged to float the naira, Central Bank Governor, Godwin Emefiele has refuted the proposed move as a recipe for disaster.

Reuters, in a separate report has it that the Nigerian stocks could see a relief rally once this weekend’s presidential election is off the way, as investors have started picking up shares to position for a post-election rally.

The Nigerian shares index lost 17.8 per cent in 2018, stood at 29,336 points in January, picked up to around 31,000 points at the moment and it is expected that the post-election rally could help lift it up to 35,000 points.

Analysts forecast that a win by either candidate, especially Atiku, would bring on a post-election fund inflow into Nigeria’s equities, after foreign investors pulled $2.1 billion out of the Lagos stock market in 2018.

“On stock exchange performance under either candidate, we expect to see significant inflows post-elections. There is this view that Atiku is a bit more pro-business so we could see a relief rally,” analysts at Stanbic said.

As Nigerians await the outcome of the upcoming weekend presidential election, President Buhari and his Vice, Prof. Yemi Osinbajo, would be hoping that their records on corruption, economy and security, which was their main focus, earn them a second four-year term in office, while Atiku and his fellow pro-business counterpart, Peter Obi hope their mapped out policies and strategies to get Nigeria working again secure them an opportunity to do so.

Continue Reading
Comments

Investment

Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies

Published

on

Barclays Bank

Barclays to High Net Worth Clients, Stay Off Africa and Other Emerging Economies

Barclays, one of the world’s largest investment banks, has started advising high net worth clients to stay off Africa and other emerging economies.

According to Barclays, despite the recent recovery noticed in emerging-market stocks, investors are better off avoiding the risks that still abound in emerging nations. Barclays Plc, however, advised high net worth clients to focus on U.S equities despite the S&P’s breakneck rally.

The investment bank said emerging economies do not have enough fiscal buffers to spend their way out of the COVID-19 pandemic and will likely continue to struggle in the near-time compared to the US with 12 percent of gross domestic product fiscal-support.

It said the huge US stimulus may halt rebound in emerging-markets stocks as more money is expected to flow into the world’s largest economy and its European counterparts.

“Compared to the U.S., emerging-market economies appear more vulnerable,” said Haider, the London-based managing director and head of global growth markets. “Their central banks have less room to maneuver, their governments may not be able to provide unlimited support and equity markets, given their sector mix, can be more challenged by an economic slowdown.”

Barclays added that even after 33 percent rebound in stocks of emerging markets since the panic selloff subsided in March, stocks are still down by 9 percent from year-to-date while the US S&P 500 stocks are up by 45 percent. Presently, their stocks trading at a 36 percent discount to US stocks, up from 25 percent three months ago.

Continue Reading

Economy

Crude Oil Rises to $43.1 Per Barrel on Production Cuts Extension

Published

on

opec 2
  • Crude Oil Hits $43.1 Per Barrel Following OPEC’s Production Cuts Extension

Brent crude oil, against which Nigerian oil price is measured, rose by 1.25 percent on Monday during the Asian trading session following OPEC and allies’ agreement to extend crude oil cuts to the end of July.

OPEC and allies, known as OPEC plus, agreed to extend production cuts of 9.7 million barrels per day reached in April to July on Saturday.

In the virtual conference, delegates agreed that members, including Nigeria and Iraq presently struggling to attain a 100 percent compliance level must keep to the agreement or be forced to do so in subsequent months.

Nigeria, Iraq and others failed to keep to the cartel’s agreement in May after reports show that Nigeria only managed to attain a 19 percent compliance level during the month while Iraq struggled to attain just 38 percent in the same month.

Russia and Saudi Arabia, the two largest producers of the group, warned members to stick to the agreed quota if they want to rebalance the global oil market.

While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.

The potential return of Libyan output could also cause considerable challenges for the OPEC leadership.

Earlier on Monday, Brent crude oil hits $43.1 per barrel, more than a month record-high, before pulling back slightly to $42.83 per barrel.

Continue Reading

Economy

Gold Dips by 2 Percent on Better Than Expected Job Report

Published

on

gold bars
  • Gold Dips by 2 Percent on Better Than Expected Job Report

Gold prices declined by 2 percent on Friday following a better than expected US non-farm payroll report.

The report showed an increase of 2.5 million payroll numbers against a decline of 7.5 million predicted by many experts.

The surprise number boosted investors’ confidence in US recovery as many dumped their haven investment (gold) for the stock market.

“We had significantly stronger-than-expected U.S. payroll numbers – an increase of 2.5 million versus an expectation of a decline of 7.5 million – that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.

Spot gold immediately declined by 1.9 percent per ounce to $1,678.81 while the U.S. gold futures slid 2.6 percent to settle at $1,683.

Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.

The surprise didn’t stop there, US Dow Jones was up 614 points despite the protest going on the US and US-China tension.

Also, NASDAQ rose by 29 points while the S&P index added 50 points increase.

Note: Investors generally increase their investments in gold and other haven assets during a crisis to avert risk exposure and do the opposite once they sense a better economy.

Continue Reading
Advertisement
Advertisement
Advertisement
Advertisement

Trending