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Asian Equities Fall Amid Tumbling Oil Prices



Asian Equities Fall Amid Tumbling Oil Prices

By Investors Hub

Asian stocks ended mostly lower in cautious trading on Thursday, with tumbling oil prices, Hong Kong protests and uncertainty ahead of the upcoming G20 summit keeping investors on the sidelines.

Chinese shares ended roughly flat as Vice Premier Liu He called for more measures to support the economy and central bank data showed the country’s bank lending increased in May. The benchmark Shanghai Composite Index inched up 1.36 points or 0.1 percent to 2,910.74.

Banks extended 1.18 trillion yuan in new loans in May compared to 1.02 trillion yuan in April. However, this was below the forecast of 1.3 trillion yuan.

Hong Kong’s Hang Seng Index edged down 13.75 points or 0.1 percent to 27,294.71 as investors kept a close eye on violent protests over an extradition bill that would allow people to be sent to mainland China for trial.

Japanese shares fell, dragged down by chipmakers after the Philadelphia Semiconductor Index dropped 2.3 percent on concerns of a slowdown in China.

The Nikkei 225 Index ended down 97.72 points or 0.5 percent at 21,032 ahead of the June settlement of Japanese stock futures and options on Friday. The broader Topix closed 0.8 percent lower at 1,541.50.

Advantest plunged 5 percent and Tokyo Electron slumped 4.2 percent after technology stocks accounted for much of the slide on Wall Street overnight.

Japan Display plummeted almost 12 percent as the struggling smartphone screen maker announced its decision to cut staff, reduce pay and take more write-offs.

Lender Mitsubishi UFJ Financial Group fell 1.3 percent and Sumitomo Mitsui Financial Group declined 1 percent as the prospects of a U.S. interest rate cut brightened.

Australian markets fluctuated before ending lower as tumbling oil prices hit energy stocks, offsetting gains in the financial sector.

Investors also reacted to the latest employment report flashing mixed signals. While employment gains exceeded expectations, the unemployment rate held steady at 5.2 percent, higher than the 5.1 percent forecast.

The benchmark S&P/ASX 200 Index ended marginally lower at 6,542.40, while the broader All Ordinaries Index dipped 0.2 percent to 6,619.10.

Woodside Petroleum, Oil Search, Origin Energy and Santos dropped 1-2 percent after oil prices slumped 4 percent overnight, pressured by an unexpected rise in U.S. crude inventories and concerns of a dimming outlook for global oil demand. Beach Energy shares plunged 5.7 percent.

Mining heavyweights BHP and Rio Tinto dropped around half a percent as copper prices slipped following disappointing data from China. Smaller rival Fortescue Metals Group tumbled 3 percent.

Conglomerate Wesfarmers plummeted 5.2 percent as it forecast falling annual earnings at its Kmart discount retail chain for the first time in a decade.

AfterPay Touch lost 12 percent as the federal financial intelligence agency AUSTRAC ordered the appointment of an external auditor to probe the company’s compliance with money laundering and terrorism financing laws.

Meanwhile, banks ANZ, Commonwealth and Westpac ended modestly higher on expectations of one more rate cut by the Reserve Bank of Australia given subdued inflation and weak economic growth.

Export-driven healthcare stocks also gained ground as the Aussie dollar nosedived after the release of jobs data. CSL rallied 2.3 percent and Cochlear added 0.6 percent.

Seoul stocks closed lower for the second straight day as investors fretted about the outlook for the chip-making sector. The benchmark Kospi gave up 5.60 points or 0.3 percent to close at 2,103.15. Samsung Electronics declined 1.9 percent and SK Hynix tumbled 3.4 percent.

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


Nigeria’s Debt Profile Jumps 17% to N46.25trn in 2022



debt profile

By Adedapo Adesanya

Nigeria’s total public debt stock increased by 17 per cent to N46.25 trillion or $103.11 billion as of December 2022 from N39.56 trillion or $95.77 billion in 2021.

This information was revealed by the Debt Management Office (DMO) on Thursday.

This means that the country’s debt profile precisely increased by 16.9 per cent or N6.69 trillion or $7.34 billion within one year, as the government borrow funds from various quarters for its budget deficits.

The agency said the new figures comprise the domestic and external total debt stocks of the federal government and the sub-national governments (36 state governments and the Federal Capital Territory).

The DMO statement partly read, “As of December 31, 2022, the total public debt stock was N46.25 trillion or $103.11 billion.

“In terms of composition, total domestic debt stock was N27.55 trillion ($61.42 billion) while total external debt stock was N18.70 trillion ($41.69 billion).

“Amongst the reasons for the increase in the total public debt stock were new borrowings by the FGN and sub-national governments, primarily to fund budget deficits and execute projects. The issuance of promissory notes by the FGN to settle some liabilities also contributed to the growth in the debt stock.

“On-going efforts by the government to increase revenues from oil and non-oil sources through initiatives such as the Finance Acts and the Strategic Revenue Mobilization initiative are expected to support debt sustainability.”

“The total public debt to gross domestic product (GDP) ratio for December 31, 2022, was 23.20 per cent and indicates a slight increase from the figure for December 31, 2022, at 22.47 per cent.

“The ratio of 23.20 per cent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/International Monetary Fund, and the 70 per cent limit recommended by the Economic Community of West African States,” the debt office said.

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12-Month Treasury Bills Now 14.74% as Appetite Falls



Treasury Bills

By Dipo Olowookere

The 364-day treasury bills stop rate was raised by the Central Bank of Nigeria (CBN) at the primary market auction (PMA) on Wednesday by 5.25 per cent as appetite for the asset class waned.

The central bank, which conducted the exercise, did not record the usual hunger for the debt instrument by investors yesterday, ostensibly because of how the bank had tinkered with the rates in the previous exercises.

But the apex bank surprised subscribers at the PMA on Wednesday when it jerked the rate higher to 14.74 per cent from the 9.49 per cent it cleared in the previous PMA.

According to details of the exercise, the CBN auctioned the one-year bill worth N139.96 billion and received subscriptions valued at N165.28 billion, allotting N142.16 billion.

Business Post reports that it was not only the 12-month dated instrument that enjoyed the rate hike yesterday as the two others benefitted.

The central auctioned N3.34 billion worth of the 182-day bill during the session but had investors stake N1.56 billion on it, with N1.56 billion allotted to successful bidders at 8.00 per cent compared with the previous session’s 5.00 per cent, indicating an increase of 3.00 per cent.

As for the 91-day bill, the rate cleared at 6.00 per cent after it was moved higher by 3.45 per cent from 2.55 per cent. This was after the apex bank allotted N1.75 billion to subscribers, the same amount of bids it received from the N2.16 billion taken to the market on Wednesday.

Recall that some days ago, the Monetary Policy Committee (MPC) of Nigeria’s central bank increased the Monetary Policy Rate (MPR), which is the benchmark interest rate in the country, by 0.50 per cent to 18.00 per cent.

The team explained that the rate hike was mainly to tame rising inflation in Nigeria, which the National Bureau of Statistics (NBS) said stood at 21.91 per cent in February.

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China’s Investment in Africa Has Cut Need for Loans from World Bank, IMF—Osinbajo



China's investment in Africa

By Adedapo Adesanya

The Vice President of Nigeria, Mr Yemi Osinbajo, has lauded China’s investment in Africa, saying it has reduced dependency on loans from Bretton Woods, which consists of the World Bank and the International Monetary Fund (IMF).

In a statement seen by Business Post, the VP, at an event at King’s College London on March 27, 2023, stated that “China shows up where and when the West will not and or are reluctant.”

He said this was evident in the investment of the Asian giant in Africa, which he said stood at $254 billion in 2021, about four times the volume of US-Africa trade.

He also noted that, “China is the largest provider of foreign direct investment, supporting hundreds of thousands of African jobs. This is roughly double the level of U.S. foreign direct investment, adding that, “China remains by far the largest lender to African countries.”

He also noted that Chinese companies had taken the lead in exploiting minerals in Africa, many now in lithium mining in Mali, Ghana, Nigeria DRC, Zimbabwe and Namibia.

The Nigerian second-in-command said that China has always shown up for African countries while outrightly condemning Western countries in that regard.

He said, “Most African countries are rightly unapologetic about their close ties with China. China shows up where and when the west will not or are reluctant.”

He added, “And many African countries are of the view that the beware of the Chinese Trojan loans advise forming the west is wise but probably self-serving,” explaining that, “Africa needs the loans and the infrastructure. And China offers them. In any case, the history of loans from Western institutions is not great.”

Taking a step further, Mr Osinbajo sent a salvo to the World Bank and the IMF over the conditions attached to their loan facilities.

“The memory of the destructive conditionalities of the Bretton Woods loans is still fresh, and the debris is everywhere.

“And the preoccupation of western governments and media with the so-called China debt trap might well be an overreaction,” he added.

“I recommend an eye-opening lecture by Professor Deborah Brautigam about two weeks ago at Jesus College Cambridge.

“The truth, as she points out, is that all of the Chinese lendings to Africa is only 5 per cent of all outstanding public and publicly guaranteed debt in low and middle-income countries, compared to 23% held by the World Bank and other multilaterals.”

He alluded that Chinese lenders account for 12 per cent of Africa’s private and public external debt.

“And the Chinese have also been there when the debts cannot be paid. In early 2020 as COVID battered African economies, China came together with other G20 members to launch the Debt Service Suspension Initiative (DSSI).

“About 73 low-income economies benefited from the suspension of principal and interest payments. Chinese banks provided 63 per cent of the total debt relief while being only owed 30 per cent of the debt service payments due,” he quipped.

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