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Economy

Asian Equities Close Mixed as Investors Observe Oil Price Movements

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Asian Equities Close Mixed as Investors Observe Oil Price Movements

By Investors Hub

Asian stocks ended mixed on Wednesday as investors monitored oil price movements and looked ahead to the U.S. Federal Reserve’s monetary policy decision later in the day. The Fed is expected to sound a bit more dovish after raising rates by 25 basis points.

China’s Shanghai Composite Index tumbled 27.09 points or 1.1 percent to 2,549.56, while Hong Kong’s Hang Seng Index rose 51.14 points or 0.2 percent to 25,865.39.

Trade remained in focus after U.S. Treasury Secretary Steven Mnuchin said U.S.-China trade talks to expand a tariff truce are planned for January.

Japanese shares fell as trade data disappointed and caution set in ahead of the Bank of Japan’s monetary policy decision on Thursday.

Japan posted a merchandise trade deficit of 737.3 billion yen in November, the Ministry of Finance said. That missed forecasts for a deficit of 630.0 billion yen following the 450.1 billion yen shortfall in October.

Exports were up just 0.1 percent year-over-year, shy of expectations for a gain of 1.1 percent following the 8.2 percent spike in the previous month. Imports were up an annual 12.5 percent versus expectations for an increase of 12.0 percent and down from 19.9 percent a month earlier.

The Nikkei 225 Index fell 127.53 points or 0.6 percent to 20,987.92, while the broader Topix closed 0.4 percent lower at 1,556.15.

SoftBank Group’s mobile unit SoftBank Corp. saw a poor market debut, with shares plunging 15 percent from the IPO price of 1,500 yen announced earlier this month.

Tech stocks ended mixed, with Advantest rallying 2.8 percent, while Tokyo Electron lost 4.4 percent. Oil company Inpex plummeted 7.2 percent and Japan Petroleum tumbled 5 percent.

Australian markets fell slightly amid weakness in the energy sector after U.S. oil prices fell over 7 percent overnight on fears of oversupply. Banks gained ground, helping limit the downside in the broader market.

The benchmark S&P/ASX 200 Index ended down 8.90 points or 0.2 percent at 5,580.60 after falling 1.2 percent on Tuesday. The broader All Ordinaries Index dropped 11.80 points or 0.2 percent to 5,650.

Woodside Petroleum, Santos, Oil Search and Origin Energy slumped 2-6 percent after oil prices dropped further overnight.

Graincorp also slid 1.4 percent. The bulk grain handler said it is providing its suitor Long-Term Asset Partners due diligence after it received an A$2.38 billion all-cash buyout proposal earlier in December.

On the other hand, National Australia Bank rose 0.8 percent. The bank is scrapping its overhauled executive pay structure after more than 80 percent of shareholders voted against it. Rivals ANZ and Commonwealth rose over 1 percent each.

Gold miner Evolution jumped over 4 percent and St Barbara soared 5.2 percent after gold prices extended gains overnight.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

Economy

Investors Mop Up Cheap Stocks Ahead of Santa Claus Rally

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Santa Claus rally

By Dipo Olowookere

Some investors at the Nigerian Exchange (NGX) Limited have started to buy some stocks currently selling at lower prices but with good fundamentals ahead of the Santa Claus rally.

Last week, the exchange witnessed an uptick in the market turnover as traders transacted 839.978 million shares worth N12.418 billion in 16,183 deals compared with the 711.618 million shares worth N15.338 billion transacted in 16,662 deals a week earlier.

Three equities, Regency Assurance, FBN Holdings and FCMB, were the most active in the week, which had five trading sessions. They accounted for 256.521 million stocks valued at N1.237 billion in 1,042 deals, contributing 30.54 per cent and 9.96 per cent to the total trading volume and value, respectively.

By sector, the financial services was the busiest as it led the activity chart with 616.627 million equities valued at N4.305 billion in 7,609 deals, contributing 73.41 per cent and 34.67 per cent to the total trading volume and value, respectively.

The conglomerates space followed with 78.470 million shares worth N260.581 million in 575 deals, while the ICT counter recorded the sale of 46.619 million stocks worth N5.717 billion in 1,222 deals.

The performance of the bourse was bullish in the week as the All-Share Index (ASI) and the market capitalisation increased by 1.26 per cent to 48,154.65 points and N26.229 trillion, respectively.

Similarly, all other indices finished higher except the consumer goods, industrial goods and growth indices, which fell by 0.61 per cent, 1.20 per cent and 0.07 per cent apiece, while the ASeM and sovereign bond indices closed flat.

A total of 37 stocks were on the gainers’ chart last week compared with 49 stocks in the previous week, while 25 equities were on the opposite end compared with the 19 equities on the log a week earlier, with 95 shares closing flat compared with 89 shares in the prior week.

Thomas Wyatt posted the highest week-on-week growth, 22.22 per cent, to sell at 44 Kobo. PZ Cussons grew by 14.74 per cent to N10.90, NPF Microfinance Bank appreciated by 14.00 per cent to N1.71, Wema Bank jumped by 11.73 per cent to N3.43, and UAC Nigeria gained 10.53 per cent to trade at N10.50.

However, Beta Glass recorded the sharpest cut of 9.90 per cent to close at N39.60, SCOA Nigeria depreciated by 9.40 per cent to N1.06, Red Star Express fell by 9.25 per cent to N2.06, Nigerian Breweries crashed by 8.07 per cent to N45.00, and Honeywell Flour tumbled by 7.46 per cent to N2.11.

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Economy

NGX to Reward Innovation, Capital Market Compliance

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capital market compliance

By Aduragbemi Omiyale

The 2022 NGX Made of Africa Awards, slated for Tuesday, December 6, 2022, would be for rewarding innovation, commitment to sustainability and capital market compliance, the Divisional Head of Business Support Services at the Nigerian Exchange (NGX) Limited, Ms Irene Robinson-Ayanwale, has stated.

Speaking in an interview with Channels TV, she said the awards ceremony themed Innovation in Capital Markets: The Panacea for Exponential Growth was designed to recognise the outstanding performance of capital market stakeholders in multiple categories as the fiscal year draws to a close for many stakeholders.

According to her, the nomination and selection process was intensely analytical as a trove of data generated by the exchange was analysed by NGX Regulation Limited (NGX RegCo) and verified for accuracy by an independent auditor.

“As you can see, the process was made transparent and verifiable. We hope the Awards will encourage the companies to continue to maintain higher standards and ensure that their stakeholders hold them accountable to higher standards.

“We are banking that it’ll encourage more innovation, compliance, adherence to rules and regulations,” she told the news platform.

Ms Robinson-Ayanwale added that NGX would be focusing on driving more listings, executing more capacity-building programs across different capital market stakeholders group and driving forward its sustainability agenda in 2023.

The decision to hold the awards and celebrate exceptional performance underscores NGX’s commitment to the growth and sustainability of the Nigerian capital market. This further accentuates the position of the exchange as a leader and driver of excellence in the financial markets ecosystem.

BUA Group and CardinalStone Partners Limited are the headline sponsors for the ceremony. Other sponsors include United Bank for Africa Plc, Coronation Asset Management Limited, Zenith Bank Plc, Seplat Energy Plc, Access Holdings Plc, Notore Chemicals Plc, Transnational Corporation Plc, Bank of Industry and Central Securities and Clearing Systems (CSCS) Plc

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Economy

Liquid Government Bonds Market Can Spur Economic Growth—SEC

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liquid government bonds market

By Aduragbemi Omiyale

The need for the development of a liquid government bonds market has been emphasised by the Securities and Exchange Commission (SEC).

The Director-General of SEC, Mr Lamido Yuguda, while speaking at the 2022 conference of the Capital Market Correspondents Association of Nigeria (CAMCAN), stated that this would have a positive effect on the economy.

Mr Yuguda, represented by the Executive Commissioner of Operations of the agency, Mr Dayo Obisan, disclosed that a liquid government bonds market implies that there is a sufficient offering of government bonds across a range of maturities, which is key to the construction of the benchmark yield curve (which is important for the establishment of the market-based risk-free interest rate used in equity pricing).

He further stated that the synergistic relationship between the government bonds and equity markets had been observed in several East Asian economies, which experienced a surge in private investment and equity market capitalisation following the establishment of a liquid debt securities market.

“At the same time, an increase in government expenditure funded by debt crowds out private investment, which in turn adversely affects aggregate expenditure and, consequently, economic growth with implications for the capital market.

“In addition, an underdeveloped capital market will affect institutional investors negatively, restraining the amount and maturity of funding available to the government locally,” the DG said at the programme tagged Nigeria’s Public Debt and the Capital Market.

At the event held in Lagos over the weekend, Mr Yuguda stated that as the apex regulator of the capital market, SEC is committed to creating an enabling and facilitative oversight and regulatory framework supportive of the deepening and development of the Nigerian capital market.

“As you are aware, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, launched and unveiled the revised Nigerian Capital Market Master Plan 2021-2025.

“The updated master plan underscores the commission’s commitment to deepening and repositioning the financial market as a key anchor of our economy.

“The Master Plan, which represents collective aspirations of the capital market community, is focused on driving initiatives geared towards growing and deepening the Market with the ultimate goal of accelerating the emergence of our Country into the top 20 global economies by the year 2025,” he stated.

He disclosed that the capital market is more resilient and is on a steady growth trajectory, adding that capital market correspondents have contributed to the development of the market and expressed delight at their partnership with the agency in this noble task of developing and deepening the capital market.

According to him, the reporters have taken on an increasingly important role of communicating to the public some of the commission’s initiatives aimed at developing the market, noting that SEC is committed to supporting efforts aimed at addressing financial literacy and empowerment gaps within society.

“There is no doubt in my mind that, the capital market presents a good platform for addressing many of Nigeria’s economic challenges.

“On our part as regulators, we shall continue to introduce new ideas and policies towards developing and regulating a capital market that is dynamic, fair, transparent and efficient to contribute to the nation’s economic development.

“We will also continue to fulfil its mandate of protecting investors and creating an enabling environment for market operators.

“Policymakers and practitioners alike are keen to understand the complex nexus between the public debt market and the Nigerian capital market,” he added.

In her remarks, the chairman of CAMCAN, Mrs Chinyere Joel-Nwokeoma, said that the annual workshop was part of the association’s contributions to the development and growth of the nation’s economy by bringing regulators, operators and company executives to discuss economic issues that affect the market in particular and the economy in general.

She said that the theme was picked because of concerns in different quarters concerning the nation’s rising total debt stock, which stood at N42.80 trillion as of June 2022.

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