Economy
Asian Equities Close Mixed on Sustained Trade Worries
By Investors Hub
Asian stocks ended mixed on Friday as trade worries persisted and investors digested key data from China and Japan.
The White House is holding off on a decision about licenses for U.S. companies to restart business with Huawei Technologies Co., Bloomberg reported after Chinese companies halted purchases of U.S. agricultural products.
Chinese shares fell after the release of mixed inflation data. The benchmark Shanghai Composite Index ended down 19.80 points or 0.1 percent at 2,774.75.
Consumer prices in China rose an annual 2.8 percent in July, the National Bureau of Statistics said in a report. That exceeded expectations for 2.7 percent, which would have been unchanged from the June reading.
On a monthly basis, consumer prices were up 0.4 percent after easing 0.1 percent in the previous month.
The bureau also said that producer prices sank 0.3 percent year-on-year, beneath expectations for a flat reading that would have been unchanged from the previous month.
Hong Kong’s Hang Seng Index slid 181.47 points or 0.7 0.69 percent to 25,939.30 as demonstrators gathered at Hong Kong’s international airport to reiterate their demands for human rights and freedom and put their case “in front of an international audience.”
Meanwhile, Japanese shares advanced after data showed the country’s economy grew at a faster than expected pace in the second quarter.
Japan’s GDP grew 0.4 percent sequentially in the second quarter of 2019, the Cabinet Office said in a report. That beat expectations for an increase of 0.1 percent following the upwardly revised 0.7 percent gain in the previous quarter.
On an annualized basis, GDP gained 1.8 percent – again exceeding expectations for an increase of 0.5 percent following the upwardly revised 2.8 percent gain in the three months prior.
The Nikkei 225 Index rose 91.47 points or 0.4 percent to 20,684.82, while the broader Topix ended up 0.4 percent at 1,503.84.
Mining, textile and apparel, and precision instrument issues led the gainers. Chip-related stocks fell on reports the Trump administration is delaying a decision on handing out licenses for U.S. companies to resume shipping to China’s Huawei. Shiseido jumped 8.1 percent and Toray Industries surged 6.1 percent on solid earnings.
Australian markets eked out modest gains, led by banks and miners. The benchmark S&P/ASX 200 Index rose 16.30 points or 0.3 percent to 6,584.40, while the broader All Ordinaries index inched up 21.10 points or 0.3 percent to 6,663.40.
Lithium miners Orocobre and Pilbara Minerals soared 7-10 percent after the world’s biggest lithium producer Albemarle said it would delay construction of 125,000 metric tons of additional lithium processing capacity due to a supply glut.
Nickel miner Independence Group jumped 5.3 percent as nickel prices hit a 16-month high. Mining heavyweight BHP ended little changed, while rival Rio Tinto shed 0.9 percent.
Banks ANZ, Commonwealth and Westpac rose between half a percent and 0.7 percent. Tech stocks rallied, with Wisetech climbing 2.7 percent and Afterpay Touch jumping 6.1 percent.
On the other hand, casino operator Crown Resorts declined 1.3 percent after saying it would cooperate in a probe into Melco Resorts and Entertainment’s planned stake purchase in Crown.
Seoul stocks rose sharply as the Chinese yuan held steady after the release of consumer and producer inflation data. The benchmark Kospi climbed 17.14 points or 0.9 percent to 1,937.75.
YG Entertainment shares slumped 11 percent after the police launched a preliminary investigation into suspicions that the company’s founder engaged in overseas gambling.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south for the fourth consecutive session after it shed 1.18 per cent on Friday, March 13.
The unlisted securities market recorded a loss despite closing without a price decliner, and ending with two price gainers led by Geo Fluids Plc, which gained 1o Kobo to sell at N3.10 per share compared with the previous day’s N3.00 per share. Industrial and General Insurance (IGI) Plc appreciated during the session by 2 Kobo to trade at 54 Kobo per unit versus Thursday’s closing price of 52 Kobo per unit.
When the market closed for the day, the market capitalisation lost N29.83 billion to close at N2.489 trillion compared with the N2.519 trillion it finished a day earlier, and the NASD Unlisted Security Index (NSI) crashed by 49.84 points to 4,160.46 points from 4,210.31 points.
Market activity improved yesterday, as the volume of transactions rose 179.5 per cent to 10.4 million units from 3.7 million units, but the value of trades declined by 68.4 per cent to N29.9 million from N95.0 million, while the number of deals weakened by 11.5 per cent to 46 deals from 52 deals.
Central Securities Clearing Systems (CSCS) Plc remained the most active stock by value on a year-to-date basis with 38.4 million units worth N2.4 billion, Okitipupa Plc followed with 6.4 million units traded at N1.1 billion, and FrieslandCampina Wamco Nigeria Plc transacted 6.3 million units for N584.3 million.
Resourcery Plc ended the trading session as the most traded stock by volume on a year-to-date basis with 1.1 billion units valued at N415.6 million, trailed by Geo-Fluids Plc with 130.8 million units valued at N504.5 million, and CSCS Plc with 38.4 million units worth N2.4 billion.
By Adedapo Adesanya
The Naira continued to claw back some gains against the Dollar in the different segments of the foreign exchange (FX) market, as its value was strengthened on Friday.
In the black market, it gained N10 against the United States Dollar yesterday to close at N1,400/$1 compared with the preceding day’s rate of N1,410/$1, and at the GTBank forex counter, it chalked up N6 to close at N1,385/$1, in contrast to the N1,391/$1 it was traded a day earlier.
Similarly, in the Nigerian Autonomous Foreign Exchange Market (NAFEX), it appreciated against the greenback during the session by N5.28 or 0.38 per cent to quote at N1,366.23/$1 versus Thursday’s closing price of N1,371.51/$1.
It also improved its value against the Pound Sterling in the official market on Friday by N21.81 to settle at N1,812.99/£1 compared with the previous day’s N1,834.80/£1, and gained N13.86 against the Euro to sell at N1,568.03/€1 versus N1,581.89/€1.
Pressure eased further on the FX market as the Central Bank of Nigeria (CBN) continued interventionist operations this week, selling Dollars to banks to boost liquidity after a $500 million boost last week.
This was complemented by inflows from foreign investors, exporters and non-bank corporates, among others, while Nigeria’s gross external reserves remained above $50 billion, the highest since 2009.
The Governor of the apex bank, Mr Yemi Cardoso, also eased fears of a Naira devaluation, saying the country’s financial system has been strengthened by reforms.
Regardless, external pressure looms as the US Dollar strengthened globally due to its war with Iran, now ongoing for three weeks.
Meanwhile, the cryptocurrency market was largely down as traders and investors continue to align with current realities.
The market is adapting to the conflict in real time. Early in the war, every headline produced an outsized reaction because nobody could price the tail risk. Now, traders have a framework where strikes happen, oil spikes and bitcoin dips only to recover again.
Cardano (ADA) depreciated by 3.8 per cent to $0.2623, Dogecoin (DOGE) lost 1.7 per cent to finish at $0.0948, Ripple (XRP) slumped 1.5 per cent to $1.39, Solana (SOL) dropped 1.4 per cent to sell for $87.33, Binance Coin (BNB) went down by 1.3 per cent to $653.58, Bitcoin (BTC) declined by 1.1 per cent to $70,670.63, and Ethereum (ETH) decreased by 0.9 per cent to $2,078.78.
However, TRON (TRX) appreciated by 1.7 per cent to $0.2941, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Adedapo Adesanya
The price of the major crude oil grade, Brent crude oil, closed above $100 on Friday for the second consecutive session, as the Iran war heads toward its third week, with oil tanker traffic through the Strait of Hormuz still effectively at a standstill.
It gained 2.67 per cent or $2.68 during the trading day to close at $103.14 per barrel, while the US West Texas Intermediate (WTI) crude oil grade appreciated by 3.11 per cent or $2.98 to settle at $98.71 per barrel.
Brent futures were up about 10 per cent for the week following the 27 per cent rise seen last week, which marked the biggest weekly gain in oil prices since the COVID-19 pandemic in 2020. WTI futures, which saw their best week since 1983 last week, ended the week more than 8 per cent higher.
US President Donald Trump said American forces launched a major bombing raid on Iran’s strategic Kharg Island, targeting military facilities on the key Persian Gulf outpost while warning Iran that its vital oil infrastructure could be destroyed if shipping in the Strait of Hormuz is disrupted.
The terminal accounts for roughly 90 per cent of Iranian crude shipments, loading millions of barrels per day onto tankers bound largely for Asian markets.
The US and Israel’s strikes in the conflict have largely targeted Iranian military and nuclear infrastructure. Oil facilities elsewhere in Iran have been hit, but Kharg’s massive storage tanks, jetties, and pipelines had remained untouched until the latest strike.
Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep fighting in a message delivered via state television.
There have been a number of attacks on foreign ships in or near the Strait, feeding into concerns that a prolonged war could translate to a global economic shock.
Prices are rising despite the US and its allies rolling out some measures to keep a lid on energy costs.
The International Energy Agency (IEA) has agreed to release 400 million stockpiled barrels, the largest such action in history.
The US has issued a 30-day waiver for India to purchase sanctioned oil from Russia. President Donald Trump is considering loosening rules under the Jones Act that require American ships to transport goods between domestic ports, including oil and gas, in an effort to lower costs.
Traders are continuing to monitor developments in the Middle East.
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