Economy
Asian Stock Markets Rise as China Cuts Interest Rate
By Investors Hub
Asian stock markets ended mostly higher on Monday as investors awaited further progress on a U.S.-China trade deal, while China’s central bank surprised markets by cutting a key interest rate for the first time since 2015.
On Saturday, Chinese state media said that the U.S. and China had ?constructive discussions? regarding a phase one trade deal in a high-level phone call.
Chinese shares closed higher after the People’s Bank of China unexpectedly lowered the rate on seven-day reverse repurchase agreements by five basis points to 2.50 percent. The move stoked hopes of more stimulus measures to revive the slowing economy.
The benchmark Shanghai Composite Index added 17.86 points or 0.6 percent to finish at 2,909.20. Hong Kong shares closed notably higher, after suffering hefty losses last week. The Hang Seng Index advanced 293.05 points or 1.1 percent to close at 26,619.71.
Japanese stocks also rose in choppy trading as investors awaited further progress on a potential U.S.-China trade deal. Tech stocks were among the major gainers. The benchmark Nikkei 225 Index climbed 113.44 points or 0.5 percent to close at 23,416.76.
In the tech space, Advantest gained 3.7 percent and Tokyo Electron rose 1.8 percent. Market heavyweight SoftBank Group and South Korean internet giant Naver said they have reached a basic agreement on a merger by October 2020 of Z Holdings, formerly known as Yahoo Japan, and the Line chat app.
Shares of Z Holdings rose 1.2 percent. SoftBank Group advanced 1.6 percent, while Fast Retailing added 0.6 percent.
The major exporters closed mixed despite a weaker yen. Sony rose 1.8 percent and Canon added 0.5 percent, while Mitsubishi Electric declined 1 percent and Panasonic lost 0.8 percent.
Among the other major gainers, Eisai Co. rose 4.4 percent, while Recruit Holdings and Hitachi Zosen advanced 2.2 percent each.
On the flip side, DIC Corp. lost 4.1 percent, Nippon Suisan Kaisha dipped 3.4 percent and Toray Industries declined 3.3 percent.
The Australian market closed lower as investors awaited further progress on a potential U.S.-China trade deal. Banking, telecom and utility stocks were among the major losers.
The benchmark S&P/ASX 200 Index fell 26.90 points or 0.4 percent to close at 6,766.80, while the broader All Ordinaries Index lost 27.20 points or 0.4 percent to finish at 6,871.70.
In the banking space, ANZ Banking, Westpac, Commonwealth Bank and National Australia Bank fell in a range of 0.2 percent to 0.8 percent ahead of the release of the minutes of the Reserve Bank of Australia’s November meeting on Tuesday.
National Australia Bank is seeking to raise A$1.4 billion through the issue of medium-term notes to bolster its capital ahead of a regulatory deadline.
Among gold miners, Evolution Mining lost 2.3 percent and Newcrest Mining declined 0.9 percent.
Saracen Mineral Holdings has agreed to acquire a 50 percent stake in Kalgoorlie’s Super Pit from Canada’s Barrick Gold for $750 million. The company’s shares were in a trading halt for a capital raising.
Smartgroup Corp. fell 13.7 percent after the salary packaging company said its long-term chief executive would retire in early 2020.
Among the major miners, Rio Tinto advanced 0.9 percent and BHP added 0.2 percent, while Fortescue Metals edged down 0.1 percent.
oOh!Media rejected rumors it has hired Macquarie Capital to help find a private equity firm to back a management buyout and delist from the ASX. Shares of the outdoor advertiser dipped 1.7 percent after emerging from a trading halt.
Appen raised its earnings outlook for the full year and also reiterated a lowered outlook for annual recurring revenue from its Figure Eight machine learning software. The tech company’s shares rose 13.4 percent.
Seoul stocks edged lower as investors booked profits. The benchmark Kospi declined 1.49 points or 0.1 percent to settle at 2,160.69. Market heavyweight Samsung Electronics dipped 0.4 percent, while chipmaker SK hynix added 0.4 percent.
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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