Economy
Developments on North Korea Talks in Focus on Wall Street
The major U.S. index futures are pointing to a lower opening on Friday after stocks recovered from early weakness but still closed modestly lower in the previous session.
Geopolitical uncertainty may weigh on the markets following President Donald Trump?s decision to call off the historic summit with North Korean leader Kim Jong Un.
North Korea responded by saying they remain open to talks, with Vice Foreign Minister Kim Kye Gwan saying Pyongyang hoped for a ?Trump-style solution? to the standoff over its nuclear weapons program.
Trump subsequently said in a post on Twitter, ?Very good news to receive the warm and productive statement from North Korea.?
?We will soon see where it will lead, hopefully to long and enduring prosperity and peace. Only time (and talent) will tell!? he added.
After coming under pressure early in the session, stocks once again staged a recovery attempt over the course of the trading day on Thursday. The major averages climbed well off their worst levels of the day but still closed in negative territory.
The Nasdaq briefly turned positive in late-day trading but closed down 1.53 points or less than a tenth of a percent at 7,424.43. The Dow fell 75.05 points or 0.3 percent to 24,811.76 and the S&P 500 slipped 5.53 points or 0.2 percent to 2,727.76.
The pullback seen early in the day came following news President Donald Trump has called off the historic summit with North Korean leader Kim Jong Un.
Trump sent a letter to Kim expressing his belief it would be inappropriate to hold the planned meeting in Singapore on June 12th.
The president attributed the decision to call off the meeting to North Korea displaying “tremendous anger and open hostility.”
The release of the letter came after North Korean vice foreign minister Choe Son-hui raised the possibility of canceling the meeting following what she called “ignorant and stupid” comments by Vice President Mike Pence.
Negative sentiment was also generated amid lingering trade concerns after Commerce Secretary Wilbur Ross initiated an investigation into whether imports of automobiles and parts threaten to impair U.S. national security.
“There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” Ross said in a statement.
He added, “The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.”
In U.S. economic news, the Labor Department released a report showing an unexpected increase in initial jobless claims in the week ended May 19th.
The report said initial jobless claims rose to 234,000, an increase of 11,000 from the previous week’s revised level of 223,000.
The increase came as a surprise to economists, who had expected jobless claims to edge down to 220,000 from the 222,000 originally reported for the previous week.
A separate report from the National Association of Realtors showed a much bigger than expected pullback in existing home sales in the month of April.
Existing home sales tumbled by 2.5 percent to an annual rate of 5.46 million in April after climbing by 1.1 percent to a rate of 5.60 million in March. Economists had expected existing home sales to edge down by 0.2 percent.
NAR chief economist Lawrence Yun attributed the slump in existing home sales in April to staggeringly low inventory levels
Despite the recovery attempt by the broader markets, energy stocks continued to show significant weakness amid a steep drop by the price of crude oil.
Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index tumbled by 1.7 percent, the Philadelphia Oil Service Index slumped by 1.6 percent and the NYSE Arca Oil Index slid by 1.2 percent.
On the other hand, tobacco stocks showed a substantial move to the upside, driving the NYSE Arca Tobacco Index up by 5.3 percent. The jump lifted the index to its best closing level in over a month.
Universal Corp. (UVV) led the tobacco sector higher, spiking by 29.7 percent after reporting a fiscal fourth quarter profit compared to a year ago loss and raising its dividend.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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