Economy
US Stocks Open Lower on Renewed Trade War Concerns
By Investors Hub
The major US index futures are pointing to a notably lower opening on Friday following the mixed performance seen in the previous session.
Renewed trade war concerns are likely to weigh on the markets after President Donald Trump announced plans to impose a 25 percent tariff on $50 billion worth of Chinese goods that contain “industrially significant technologies.”
“These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs,” Trump said in a statement.
He added, “n addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China.”
Trump claimed he would impose additional tariffs on Chinese goods if China retaliates by imposing new tariffs on US goods or services, raising non-tariff barriers, or taking punitive actions against American exporters.
However, China has already pledged to strike back quickly if the US enacts protectionist measures that harm the country’s interests.
“If the United States takes unilateral, protectionist measures that harm China’s interests, we will quickly react and take necessary steps to safeguard our rights and interest,” said Chinese Foreign Ministry Spokesman Geng Shuang.
Following the pullback seen late in the previous session, the major averages turned in a mixed performance during trading on Thursday. While the tech-heavy Nasdaq climbed to a new record closing high, the narrower Dow closed lower for the third straight day.
The Nasdaq advanced 65.34 points or 0.9 percent to 7,761.04. The S&P 500 also rose 6.86 points or 0.3 percent to 2,782.49, but the Dow edged down 25.89 points or 0.1 percent at 25,175.31.
The advance by the Nasdaq was partly due to continued strength among media stocks, with 21st Century Fox (FOXA) extending the strong upward seen in the previous session.
Fox moved notably higher after Comcast (CMCSA) announced a $65 billion bid for most of the company’s media assets, igniting a potential bidding war with Disney (DIS).
Meanwhile, a notable decline by shares of General Electric (GE) weighed on the Dow, with the industrial conglomerate slumping by 1.8 percent.
The drop by GE came after CEO John Flannery told French Finance Minister Bruno Le Maire the company’s commitment to create 1,000 jobs by the end of 2018 as part of its acquisition of Alstom’s energy business is now out of reach.
Earlier in the day, buying interest was generated by the release of some upbeat economic data, including a report from the Commerce Department showing a much bigger than expected increase in retail sales in the month of May.
The Commerce Department said retail sales jumped by 0.8 percent in May after climbing by an upwardly revised 0.4 percent in April. Economists had expected retail sales to rise by 0.4 percent.
Excluding sales by motor vehicle and parts dealers, retail sales still surged up by 0.9 percent in May following a 0.4 percent increase in April. Ex-auto sales had been expected to climb by 0.5 percent.
A separate report from the Labor Department unexpectedly showed a modest decrease in initial jobless claims in the week ended June 9th.
The report said initial jobless claims edged down to 218,000, a decrease of 4,000 from the previous week’s unrevised level of 222,000. Economists had expected initial jobless claims to inch up to 224,000.
Traders were also digesting the European Central Bank’s highly anticipated monetary policy announcement, with the ECB revealing plans to wind down its massive bond-buying program.
The ECB said it plans to reduce the monthly pace of its net asset purchases to 15 billion euros from 30 billion euros after September before completely ending the program at the end of December.
Meanwhile, the ECB left interest rates unchanged and said it expects rates to remain at their present levels at least through the summer of 2019.
Most of the major sectors showed only modest moves on the day, contributing to the relatively lackluster close by the broader markets.
Utilities stocks showed a strong move to the upside, however, with the Dow Jones Utilities Average climbing by 1.3 percent. The average climbed further off the four-month closing low set on Monday.
Notable strength was also visible among gold stocks, as reflected by the 1.1 percent gain posted by the NYSE Arca Gold Bugs Index. The strength in the sector came amid an increase by the price of gold.
Biotechnology, telecom, and real estate stocks also saw some strength on the day, while banking stocks moved to the downside.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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