Economy

Traders Looking Ahead to Powell’s Second Day of Testimony

Published

8 years ago

01/03/2018

By Investors Hub

The major U.S. index futures are pointing to a roughly flat opening on Thursday following the sharp pullback seen over the course of the two previous sessions.

Traders may be reluctant to make significant moves ahead of Federal Reserve Chairman Jerome Powell?s second day of testimony on Capitol Hill.

Powell is due to appear before the Senate Banking Committee after his remarks before the House Financial Services Committee on Tuesday sparked fears the Fed may raise interest rates more than previously estimated.

With Powell?s prepared remarks likely to mirror those he delivered before the House committee, traders are likely to focus on the question-and-answer segment for clues about the outlook for rates.

After moving to the upside early in the session, stocks fluctuated over the course of the trading day on Wednesday. The major averages bounced back and forth across the unchanged line before closing firmly in negative territory for the second straight day.

The major averages accelerated to the downside going into the close, ending the session at their worst levels of the day. The Dow plunged 380.83 points or 1.5 percent to 25,029.20, the Nasdaq slumped 57.35 points or 0.8 percent to 7,273.01 and the S&P 500 tumbled 30.45 points or 1.1 percent to 2,713.83.

The volatility on Wall Street came as traders expressed uncertainty about the outlook for interest rates after new Federal Reserve Chairman Jerome Powell seemed to suggest that the Fed may raise rates more than the three times currently anticipated.

During testimony before the House Financial Services Committee on Tuesday, Powell noted that incoming data has indicated a strengthening in the economy since the median forecast called for three rate hikes at the December meeting.

Powell stressed that he did not want to prejudge the new set of projections, but his comments still raised concerns about four rate increases this year.

A disappointing batch of economic data may have partly offset the interest rate concerns early in the session, with a report from the Commerce Department showing slightly slower than previously estimated economic growth in the fourth quarter.

The Commerce Department said gross domestic product climbed by 2.5 percent in the fourth quarter compared to the previously estimated 2.6 percent increase. The downward revision to GDP growth matched economist estimates.

A separate report from the National Association of Realtors unexpectedly showed a steep drop in pending home sales in the month of January.

NAR said its pending home sales index tumbled by 4.7 percent to 104.6 in January from a downwardly revised 109.8 in December. Economists had expected pending home sales to rise by 0.3 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the unexpected decrease, the pending home sales index slumped to its lowest level since hitting 104.1 in October of 2014.

MNI Indicators also released a report showing a bigger than expected slowdown in the pace of growth in Chicago-area business activity in the month of January.

Oil service stocks showed a substantial move to the downside on the day, dragging the Philadelphia Oil Service Index down by 3.6 percent. The weakness among oil service stocks came amid a steep drop by the price of crude oil.

Significant weakness was also visible elsewhere in the energy sector, with the NYSE Arca Natural Gas Index and the NYSE Arca Oil Index slumping by 2.5 percent and 2.3 percent, respectively.

Biotechnology, chemical, and housing stocks also saw notable weakness on the day, moving lower along with most of the other major sectors.

Economy

NGX Seeks Suspension of New Capital Gains Tax

Published

24 minutes ago

05/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Nigerian Exchange (NGX) Limited is seeking review of the controversial Capital Gains Tax increase, fearing it will chase away foreign investors from the country’s capital market.

Nigeria’s new tax regime, which takes effect from January 1, 2026, represents one of the most significant changes to Nigeria’s tax system in recent years.

Under the new rules, the flat 10 per cent Capital Gains Tax rate has been replaced by progressive income tax rates ranging from zero to 30 per cent, depending on an investor’s overall income or profit level while large corporate investors will see the top rate reduced to 25 per cent as part of a wider corporate tax reform.

The chief executive of NGX, Mr Jude Chiemeka, said in a Bloomberg interview in Kigali, Rwanda that there should be a “removal of the capital gains tax completely, or perhaps deferring it for five years.”

According to him, Nigeria, having a higher Capital Gains Tax, will make investors redirect asset allocation to frontier markets and “countries that have less tax.”

“From a capital flow perspective, we should be concerned because all these international portfolio managers that invest across frontier markets will certainly go to where the cost of investing is not so burdensome,” the CEO said, as per Bloomberg. “That is really the angle one will look at it from.”

Meanwhile, the policy has been defended by the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, who noted that the new tax will make investing in the capital market more attractive by reducing risks, promoting fairness, and simplifying compliance.

He noted that the framework allows investors to deduct legitimate costs such as brokerage fees, regulatory charges, realised capital losses, margin interest, and foreign exchange losses directly tied to investments, thereby ensuring that they are not taxed when operating at a loss.

Mr Oyedele also said the reforms introduced a more inclusive approach to taxation by exempting several categories of investors and transactions.

Economy

Food Concepts Return NASD OTC Exchange to Danger Zone

Published

10 hours ago

05/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.

Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.

This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.

Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.

Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.

At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.

InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.

Economy

Investors Gain N97bn from Local Equity Market

Published

10 hours ago

05/12/2025

Dipo Olowookere

By Dipo Olowookere

The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.

This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.

UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.

On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.

Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.

Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.

A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.

This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.

For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.