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Investors Lose N804bn in Seven Days

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Economic Diversification

Equity investors in the country’s capital market in the first seven trading days of the year lost N804tn of their investment worth.

Market capitalisation after the trading on the floor of the Exchange on Tuesday closed at N8.95tn while on the first day of trading in 2016 (January 4), market capitalisation was pegged at N9.75tn. This depicts a loss of N804bn.

The All-Share Index also dropped from 28,370.32 basis points on the first day of trading in 2016 to 26,034.94 basis points on Tuesday.

The daily market performance of the NSE showed a drop in market capitalisation from N9.062tn on Monday to N8.953tn while the ASI also depreciated from 26,350.18 points to 26,034.93 on Tuesday.

A total of 223.385 million shares worth N2.512bn were traded in 2,776 deals. The highest index point recorded was 27,266.18 while the lowest and average index points were 26,034.93 and 26,350.18, respectively.

After the close of trading on Tuesday, 32 quoted firms emerged losers while only eight had their share prices appreciated.

On the other hand, 18 companies emerged losers while 12 gained on the first day of trading in 2016.

Livestock Feeds Plc, Tiger Branded Consumer Goods Plc, Nigerian Aviation Handling Company Plc, UAC Properties Plc and Cadbury Nigeria Plc emerged top losers.

The share price of Livestock Feeds closed at N1.22 from N1.34, losing N0.12 (8.96 per cent) while that of Tigerbrands shed N0.08 (8.51 per cent) to close at N0.86 from N0.94. NAHCO shares depreciated by N0.18 (five per cent) to close at N3.42 from N3.60.

UAC Properties shares also lost N0.29 (five per cent) to close at N5.51 from N5.80 while that of Cadbury closed at N15.49 from N16.30, losing N0.81 (4.97 per cent).

Other losers were Zenith Bank Plc, Oando Plc, PZ Cussons Nigeria Plc, Transnational Corporation of Nigeria Plc, Berger Paints Plc, Diamond Bank Plc, N.E.M. Insurance Company Nigeria Plc, Law Union and Rock Insurance Plc, Vono Products Plc, African Prudential Registrars Plc, Nigerian Breweries Plc, Unity Bank Plc, United Capital Plc, Ashaka Cement Plc, Cutix Plc, and Ecobank Transnational Incorporated.

Guaranty Trust Bank Plc, Neimeth International Pharmaceuticals Plc, Continental Reinsurance Plc, Wema Bank Plc, FBN Holdings Plc, UACN Plc, FCMB Group Plc, United Bank for Africa Plc, Skye Bank Plc, Stanbic IBTC Holdings Plc and Union Bank Nigeria Plc also emerged losers after the day’s trading.

May and Baker Nigeria Plc, Champion Breweries Plc, Eterna Plc, Portland Paints and Products Nigeria Plc, and Trans-national Express Plc topped the gainers table.

May & Baker shares gained N0.05 (five per cent) to close at N1.05 from N1 while that of Champion Breweries closed at N3.38 from N3.22, appreciating by N0.16 (4.97 per cent).

The share price of Eterna also closed at N1.69 from N1.61, gaining N0.08 (4.97 per cent) while that of Portland Paints and Products appreciated by N0.19 (4.82 per cent) to close at N4.13 from N3.94.

Trans-national Express shares gained N0.04 (3.60 per cent) to close at N1.15 from N1.11. Learn Africa Plc, Access Bank Plc and International Breweries Plc also emerged gainers after the close of trading at the Exchange.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Top Five US Oil and Gas Firms Lost $307bn in Market Value Amid COVID-19 Crisis

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Crude oil

Market Value of US Five Largest Companies Decline by $307bn in 2020

Even before the coronavirus pandemic, the oil and gas industry was faced with slumping prices. However, with a record collapse in oil demand amid the coronavirus lockdown, the COVID-19 crisis has further shaken the market, causing massive revenue and market cap drops for even the largest oil and gas companies.

According to data presented by StockApps.com, the top five oil and gas companies in the United States lost over $307bn in market capitalization year-over-year, a 45% plunge amid the COVID-19 crisis.

Market Cap Still Below March Levels

Global macroeconomic concerns such as the US-China trade war and the oil overproduction set significant price drops even before the coronavirus outbreak. A standoff between Russia and Saudi Arabia in the first months of 2020 sent prices even lower.

After global oil demand plunged in March, Saudi Arabia proposed a cut in oil production, but Russia refused to cooperate. Saudi Arabia responded by increasing production and cutting prices. Shortly Russia followed by doing the same, causing an over 60% drop in crude oil prices at the beginning of 2020. Although OPEC and Russia agreed to cut oil production levels to stabilize prices a few weeks later, the COVID-19 crisis already hit. Statistics show that oil prices dropped over 40% since the beginning of 2020 and are hovering around $40 a barrel.

Such a sharp fall in oil price triggered a growing wave of oil and gas bankruptcies in the United States and caused a substantial financial hit to the largest gas producers.

In September 2019, the combined market capitalization of the five largest oil and gas producers in the United States amounted to $674.2bn, revealed the Yahoo Finance data. After the Black Monday crash in March, this figure plunged by 45% to $373bn. The following months brought a slight recovery, with the combined market capitalization of the top five US gas producers rising to over $461bn in June.

However, the fourth quarter of the year witnessed a negative trend, with the combined value of their shares falling to $367bn at the beginning of this week, $6.2bn below March levels.

Exon Mobil`s Market Cap Halved in 2020, Almost $155bn Lost YoY

In August, Exxon Mobil Corporation, once the largest publicly traded company globally, was dropped from the Dow Jones industrial average after 92 years. As the largest oil and gas producer in the United States, the company has suffered the most significant market cap drop in 2020.

Statistics indicate the combined value of Exxon Mobil`s shares plunged by 52% year-over-year, falling from almost $300bn in September 2019 to $144bn at the beginning of this week.

Phillips 66, the fourth largest gas producer in the United States by market capitalization, witnessed the second-largest drop in 2020. Statistics show the company`s market cap dipped by 49.6% year-over-year, landing at $22.9bn this week.

The Yahoo Finance data revealed that EOG Resources lost over $21bn in market cap since September 2019, the third-largest drop among the top five US gas producers.

Conoco Phillips witnessed a 42% drop in market capitalization amid the COVID-19 crisis, with the combined value of shares plunging by almost $30bn year-over-year.

Statistics show Chevron witnessed the smallest market cap drop among the top five companies. At the beginning of this week, the combined value of shares of the second-largest US gas producer stood at $141.5bn, a 36.9% plunge year-over-year.

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Gold Hit 26.8% ROI YTD, the Highest Increase in Value Among Top Assets

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Gold Bars

Gold Delivers 26.8% Return on Investment Year-t-Date

As the world’s earliest form of currency, gold has long been considered a reliable store of value. Unlike banknotes, stock, or other assets, the precious metal managed to preserve the investors’ wealth throughout the years, especially in times of turmoil in the financial markets.

According to data presented by AksjeBloggen, gold hit a 26.8% YTD return on investment, the highest increase in value among top assets.

Gold Return Rate 8.5% Higher than in 2019

Investors tend to focus on gold in times of market volatility, considering it to be a ‘safe haven’ in crises like the coronavirus. In 2019, the value of gold increased by 18.3%, revealed the Blackrock data. The precious metal continued the impressive performance in 2020 with a 26.8% YTD return, 8.5% more than in 2019.

Statistics show that last year, the S&P 500 index increased in value by 31% but was outperformed by Nasdaq, which grew by 35.2%. The MSCI Europe index rose by 26.1% in 2019. China A-shares followed with a 22.3% ROI.

However, the COVID-19 crisis had a massive impact on popular assets, causing a sharp fall in their values during the first half of 2020. The Blackrock data revealed the Nasdaq YTD return hit 23.9%, 11.3% below the 2019 performance. China A stocks reached 10% ROI YTD, much under the 22.3% return in 2019.

Statistics show the S&P 500 index had an 8.4% value increase in the nine months of 2020, almost four times less than in 2019. MSCI Emerging Market Index reached a 4.9% value increase in the same period, compared to 13% in 2019.

The Blackrock data show that crude oil, FTSE 100, and MSCI Europe index witnessed the most significant drop in the nine months of 2020, with their values falling by 34.6%, 22.4%, and 11.5%, respectively.

Global Demand for Investment Gold Surged by 100% YoY

Although many investors value gold as an important portfolio asset, the economic downturn caused by the COVID-19 pandemic led to a surge in global demand for the precious metal.

The World Gold Council data showed the global demand for investment gold increased significantly since the beginning of the year.

In the fourth quarter of 2019, it amounted to 279.2 metric tons. By the end of March, this figure jumped by more than 93% to 539.6 metric tons. The increasing trend continued in the second quarter of the year, with global demand for investment gold hitting 582.9 metric tons, an almost 100% jump year-over-year.

Statistics indicate the global demand for gold for investment purposes hit a record-breaking 1,152 metric tons in the first half of 2020, the highest figure so far.

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Oil Prices News: Oil Gains Following Drops in US Crude Inventories

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markets energies crude oil

Oil Prices Gain Following Drops in US Crude Inventories and OPEC High Compliance Level

Global oil prices extended their 2 percent gains on Thursday after data showed U.S crude oil inventories declined last week.

The price of Brent crude oil, against which Nigerian oil is measured, gained 0.2 percent or 7 cents to $43.39 a barrel as at 12:10 pm Nigerian time. While the U.S. West Texas Intermediate (WTI) crude appreciated by 8 cent or 0.2 percent to $41.12 barrels.

Oil prices extended their three days gain after the American Petroleum Institute said the U.S crude inventories declined by 5.4 million barrels in the week ended October 9.

The report released after the market closed on Wednesday revealed that distillate stockpiles, which include diesel and heating oil, declined by 3.9 million barrels. Those stated drawdowns almost double analysts’ projections for the week.

Much of the fall is due to the effects of Hurricane Delta shuttering U.S. production in the Gulf of Mexico, and as such, will be a transitory effect,” said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.

“Therefore, I am not getting too excited that a turn of direction is upon markets, although both contracts are approaching important technical resistance regions.”

Also, the report that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, referred to as OPEC+ attained 102 percent compliance level with their oil production cuts agreements bolstered global oil outlook. Suggesting that demands for the commodity are likely not growing and could drag down prices in few weeks, especially when one factor in the reopening of Libya’s Sharara oil field, workers returning to operation in Norway and the Gulf of Mexico.

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