Economy
Asian Stocks Finish Lower on Escalating Trade Tensions
By Investors Hub
Asian stocks ended mostly lower on Friday in response to escalating trade tensions and the release of weak Chinese data.
U.S. President Donald Trump has announced new tariffs on all goods coming from Mexico in an effort to curb illegal immigration to the U.S.
In a tweet, Trump said that beginning June 10, a 5 percent tariff would be imposed and would slowly rise until the situation is resolved.
Chinese shares fell modestly as Chinese manufacturing activity for the month of May missed expectations. The official manufacturing PMI dropped to 49.4 from 50.1 in April.
The benchmark Shanghai Composite index slipped 7.11 points or 0.2 percent to 2,898.70, while Hong Kong’s Hang Seng Index fell 213.79 points or 0.8 percent at 26,901.09.
Japanese shares tumbled as the yen strengthened and Germany’s benchmark medium-term government bond yield hit the lowest level on record. Meanwhile, a slew of Japanese data released today proved to be a mixed bag.
The Nikkei 225 Index plunged 341.34 points or 1.6 percent to 20,601.19, while the broader Topix closed 1.3 percent lower at 1,512.28.
Automakers were among the major losers. Mazda Motor lost 7.1 percent, Isuzu Motors declined 4.9 percent, Nissan Motor slumped 5.3 percent, Honda Motor plummeted 4.3 percent and Toyota Motor declined 2.9 percent.
Industrial output in Japan rose a seasonally adjusted 0.6 percent in April, exceeding expectations for an increase of 0.2 percent following the 0.6 percent decline in March.
The total value of retail sales in Japan came in roughly flat sequentially on a seasonally adjusted basis in April, missing expectations for an increase of 0.6 percent and down from the 0.2 percent gain in March.
The unemployment rate in Japan came in at a seasonally adjusted 2.4 percent in April. That was in line with expectations and down from 2.5 percent in March.
Overall consumer prices in the Tokyo region were up 1.1 percent year-on-year in May. That was shy of expectations for an increase of 1.2 percent and down from 1.4 percent in April.
Meanwhile, Australian shares ended little changed with a positive bias as Trump threatened to impose new tariffs on Mexico if the country does not step up its enforcement actions.
Mining heavyweights ended mixed, while pharma heavyweights such as Cochlear and CSL advanced 1.7 percent and 0.9 percent, respectively.
Gold miner Evolution Mining soared 5.5 percent and Newcrest added 2.5 percent after gold prices rose to a two-week high. St Barbara slumped 5.9 percent after slashing its 2019 gold production outlook.
Energy stocks Origin Energy, Oil Search, Santos and Woodside Petroleum dropped 1-2 percent after crude oil prices tumbled almost 4 percent overnight.
Crown Resorts plunged 3 percent after casino mogul James Packer sold nearly half his stake in the firm to Hong Kong’s Melco Resorts & Entertainment Ltd., dampening hopes for a full buyout.
Seoul stocks edged up slightly as the Bank of Korea kept its benchmark interest rate unchanged amid increased uncertainties concerning economic growth outlook. The benchmark Kospi inched up 2.94 points or 0.1 percent to 2,041.74.
Industrial production in South Korea climbed a seasonally adjusted 1.6 percent in April, Statistics Korea said today – down from 2.1 percent in March. On a yearly basis, industrial production eased 0.1 percent after sliding 2.3 percent in the previous month.
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has revealed that the currency in circulation further dropped to N982.09 billion in February 2022.
This can be attributed to the Naira redesign policy of the apex bank, which was announced last October when total circulation was put at N3.29 trillion.
These figures revealed that N2.3 trillion or 235 per cent of the cash was mopped up from circulation during the period under review.
According to the CBN, the currency in circulation had moved from N3.16 trillion in November 2022 to N3.29 trillion in December 2022 but dropped heavily to N1.38 trillion in January 2023 and further to N982.09 billion in February 2023.
Last year, the central bank, as part of efforts to drive digital payment acceptance and cut down the currency outside the banking system, announced plans to roll out redesigned Naira notes of N200, N500, and N1,000 and phase out of the old Naira notes.
The Governor of the CBN, Mr Godwin Emefiele, said statistics showed that over 80 per cent of currency-in-circulation was outside the vaults of commercial banks.
He highlighted the need to reduce the significant amount of cash outside the banking system to ensure monetary policy effectiveness, curtail criminal activities, and ensure financial inclusion.
However, many complained about the 90-day window from the announcement to the execution of the policy.
What ensued for many was the unavailability of the new notes, with citizens unable to get cash which hindered their day-day activities. Many opted for digital transactions, which put a strain on a nascent infrastructure, with payment taking longer than expected with many services experiencing downtime.
Although the opportunities opened to the likes of OPay, PalmPay, and MoniePoint to tap into Nigeria’s micro-retail sector, on some days, it was a hassle for these channels to work, leading to increased failure and frustrations in online transactions.
The hardship spurred Kaduna, Kogi and Zamfara to sue the federal government over the naira redesign policy and joined on February 15 by Cross River, Sokoto, Lagos, Ogun, Katsina, Ondo and Ekiti states. Later, Nasarawa, Niger, Kano, Jigawa, Rivers and Abia states joined the suit.
Rivers and Abia states had filed separate suits that were consolidated with the main one.
However, Edo and Bayelsa had joined the side of the federal government in opposing the suit.
Succour came on March 3 when the Supreme Court extended the validity of the notes to December and faulted the ill-timed naira redesign policy.
It wasn’t until 10 days (March 13) after the ruling that the CBN, in a circular signed by Mr Isa AbdulMumin, the CBN’s acting director of corporate communications, directed all deposit money banks to comply with the Supreme Court ruling, further instructing all concerned parties to conform accordingly.
A day before that, President Buhari had distanced himself from the CBN governor and the Attorney General of the Federation (AGF)’s inability to obey the Supreme Court’s ruling.
He said that “at no time did he instruct the Attorney General and the CBN Governor to disobey any court orders involving the government and other parties.”
Analysts expect that as the CBN begin to recirculate the old notes till December, it will gradually ease the hardships of Nigerians and ensure economic activities return to normal in the country.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange returned to the bearish zone on Monday, March 20 as it depreciated by 0.05 per cent, driven by the negative price movements in three companies.
The price losers were led by Central Securities Clearing System (CSCS) Plc, which depreciated by 15 Kobo to close at N14.05 per share versus N14.20 per share, First Trust Microfinance Bank Plc lost 5 Kobo to trade at 47 Kobo per unit compared with the previous session’s 52 Kobo per unit, while Industrial and General Insurance (IGI) Plc fell by 1 Kobo to quote at 8 Kobo per unit compared with last Friday’s 9 Kobo per unit.
The trio weakened the impact of the 14 Kobo price appreciation achieved by Geo-Fluids Plc, which closed at N1.50 per share, in contrast to the preceding session’s N1.36 per share.
At the close of business, the market capitalisation of the NASD exchange shrank by N460 million to close the day at N960.66 billion versus the N961.12 billion it ended in the previous trading session.
Similarly, the NASD Unlisted Securities Index (NSI) went down by 0.35 points to finish at 731.09 points compared with 731.44 points in the previous session.
During the session, there was a surge of 7,753.9 per cent in the volume of securities traded at the bourse as investors exchanged 58.1 million units of securities compared with the previous trading day’s 739,755 units of securities.
Likewise, the value of shares traded at the session ballooned by 64.2 per cent to N50.3 million from the N30.6 million posted last Friday, while the number of deals increased by 20 per cent to 12 deals from the 10 deals executed in the preceding session.
At the close of trades, Geo-Fluids Plc remained the most traded stock by volume (year-to-date) with the sale of 455.3 million units valued at N493.6 million, followed by UBN Property Plc with 365.8 units worth N309.5 million, and IGI Plc with 25.1 million units worth N1.9 million.
The most active stock by value (year-to-date) was VFD Group Plc for exchanging 7.3 million units worth N1.7 billion, Geo-Fluids Plc was in second place with 455.3 million units valued at N493.6 million, while UBN Property Plc was in third place with 365.8 million units valued at N309.5 million.
By Adedapo Adesanya
The Naira opened the week stronger against the US Dollar in the black market, the Peer-2-Peer (P2P), and the Investors and Exporters (I&E) segments of the foreign exchange (forex) market on Monday, March 20.
In the parallel market window, the Nigerian Naira gained N7 against the greenback to quote at N740/$1 compared with last Friday’s exchange rate of N747/$1.
In the P2P segment, the value of the local currency appreciated by N6 against the American currency to sell for N748/$1, in contrast to the preceding session’s N754/$1.
Similarly, the domestic currency improved against the US Dollar in the official market window by 33 Kobo or 0.07 per cent to trade at N461.50/$1 compared with N461.83/$1.
The local currency was strengthened in the spot market yesterday amid an FX demand pressure, which pushed the turnover for the day higher by 43.1 per cent or $37.85 million to $125.66 million from $87.81 million.
However, in the interbank segment of the market, the Naira lost N2.70 against the Pound Sterling to quote at N559.15/£1, in contrast to the previous session’s N556.45/£1 and against the Euro, it depreciated by N2.12 to close at N490.11/€1 versus last Friday’s N487.99/€1.
Meanwhile, the cryptocurrency market turned red on Monday as the Federal Reserve and other major central banks made coordinated moves to enhance market liquidity.
Litecoin (LTC) went southwards by 3.9 per cent to trade at $78.91, Dogecoin (DOGE) fell by 2.8 per cent to $0.0718, Ethereum (ETH) declined by 1.0 per cent to $1,743.47, Cardano (ADA) dipped by 0.7 per cent to $0.3382, and Binance Coin (BNB) lost 0.3 per cent to sell for $334.40.
However, Bitcoin (BTC) gained 1.2 per cent to quote $27,849.66 as markets responded to the deepening global banking crisis, amid the decision of UBS to buy Credit Suisse, a move engineered by Swiss authorities.
Also, Ripple (XRP) rose by 0.07 per cent to trade at $0.3836, Solana (SOL) grew by 0.06 per cent to sell at $22.43, as the US Dollar Tether (USDT) and Binance USD (BUSD) traded flat at $1.00 each.
