Economy
Brent Drops Below $65 as Delta Variant Further Weakens Demand
By Adedapo Adesanya
The price of the Brent crude further fell on Friday, August 20 as it sold below $65 per barrel after losing $1.27 or 1.91 per cent to $64.87 per barrel.
The global crude benchmark was not the only decliner yesterday as the United States’ crude benchmark, the West Texas Intermediate (WTI) crude oil futures, went down by $1.52 or 2.39 per cent to $62.25 per barrel.
Business Post reports that the fall reported during the session was compounded by the selling of the oil futures by investors in anticipation of weakened fuel demand worldwide due to a surge in COVID-19 cases.
On a weekly basis, the Brent crude went to its lowest since April, falling about 8 per cent while WTI lost more than 9 per cent in the week.
The crude market has now posted seven consecutive days of losses as nations worldwide are responding to the rising infection rate due to the coronavirus Delta variant by adding travel restrictions to cut off the spread.
Analysts noted that the oil market has quickly noticed that the Delta variant was a growing problem and a potential hurdle to a mobility/fuel demand recovery as the world’s largest producer, China, has imposed stricter disinfection methods at ports, causing congestion.
Although most of the demand disruption seen in road fuels since the outbreak of the pandemic has now been reversed, jet fuel has thus become by far the top laggard that is keeping total oil demand from recovering to pre-COVID-19 levels.
This has further been compounded by nations including the US and Australia adding travel restrictions.
The market was impacted by the US Dollar hitting a nine-month high on signs the US Federal Reserve is considering reducing stimulus this year.
Oil prices move inversely to the American currency, making oil more expensive for foreign purchasers when the dollar rallies.
As demand tanks, supply seems to be increasing as US production rose to 11.4 million barrels per day in the most recent week, and drilling firms added rigs for the third week in a row.
This is happening as the Organisation of the Petroleum Exporting Countries and allies (OPEC+) are slowly boosting supply that had been shut early in the pandemic.
The 23-member alliance has been unwinding record output cuts agreed in April 2020, as demand and the economy recovers with 5 million remaining now.
The agreement allows for a 360,000 barrels per day increase in OPEC output in July versus June, while Saudi Arabia had pledged to add 400,000 barrels per day as the final step in a plan to unwind one million barrels per day voluntary cut it made in February, March and April.
By Aduragbemi Omiyale
Data from the Debt Management Office (DMO) showed that the Nigerian government used about N13.12 trillion to service the various debts in 2024.
Business Post reports that this was 68 per cent higher than the N7.8 trillion paid by Nigeria to pay interests on debts in 2023 and higher than the N12.3 trillion approved by the National Assembly for last in the 2024 Appropriation Act.
Over the weekend, the DMO revealed that the total debt of the country as of December 31, 2024, stood at N144.67 trillion versus N97.34 trillion a year earlier.
This comprised an external debt of N70.29 trillion and a domestic debt N74.38 trillion.
The agency stated that the significant increase in the debt service was due higher interest rates and increased domestic borrowing as well as rising global interest rates and the depreciation of the Naira, which has made dollar-denominated debt more expensive to service.
About N5.97 trillion was used to funds borrowed by the government from domestic investors, higher than the N5.23 trillion used for the same purpose in 2023 by 14.15 per cent, while N7.15 trillion was used for paying interest on foreign loans, higher than the N2.57 trillion in 2023 by 167 per cent.
Analysis showed that about N4.69 trillion was paid to local investors for giving the federal government money to fund the 2024 budget deficit from the sale of FGN bonds at the local capital market versus the N3.66 trillion recorded a year earlier.
Following the FGN bonds was treasury bills, which recorded the use of N747.15 billion for the payment of interest to investors compared with N326.12 billion in 2023.
Debt servicing for FGN Sukuk gulped N158.43 billion last year, the sum of N6.38 billion was used to pay interest to investors who subscribed to the monthly FGN savings bonds, and N2.18 billion was for FGN green bonds, with N265.86 billion for promissory note principal repayments.
In the 2025 budget, the federal government has allocated about N16 trillion for debt servicing.
By Adedapo Adesanya
The market capitalisation of the NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.44 per cent or N3.87 billion decline to close at N1.911 trillion in the 14th trading week 14 of 2025 compared with the preceding week’s N1.915 trillion.
The drop was impacted by a markdown in the price of Capital Bancorp Plc for the company’s proposed interim dividend of 10 Kobo per share.
During the three-day trading week, the Unlisted Security Index (NSI) went down by 0.20 per cent or 6.71 points to 3,309.46 points from the 3,316.17 points recorded in Week 13.
The share price of Food Concepts Plc tumbled by 10 per cent last week to N1.17 per unit from N1.30 per unit, Geo-Fluids Plc slipped by 8.2 per cent to N2.48 per share from N2.70 per share, Capital Bancorp Plc slid by 4.7 per cent to N2.04 per unit from N2.14 per unit, and Afriland Properties Plc lost 2.6 per cent to end at N18.42 per share versus the preceding week’s N18.92 per share.
On the flip side, IPWA Plc gained 10 per cent to close at 55 Kobo per unit compared with the previous week’s 50 Kobo per unit, Lagos Building Infrastructure Company (LBIC) Plc went up by 9.9 per cent to N2.63 per share from N2.40 per share, First Trust Microfinance Bank Plc appreciated by 3.6 per cent to 58 Kobo per unit from 56 Kobo per unit, Industrial and General Insurance (IGI) Plc rose by 2.9 per cent to 36 Kobo per share from 35 Kobo per share, and FrieslandCampina Wamco Nigeria jumped by 0.2 per cent to N36.80 per unit from N36.73 per unit.
In the week, investors executed 82 deals in 14 different stocks as there was only a short trading week due to the Ramadan holidays.
The trading volume in the week increased by 262.8 per cent to 10.8 million units from 2.98 million units, but the value of transactions decreased by 76.1 per cent to N16.3 million from N68.2 million.
The most active stock by value last week was FrieslandCampina Wamco Nigeria Plc with N6.1 million, followed by IPWA Plc with N4.9 million, 11 Plc recorded N1.4 million, Air Liquide Plc posted N1.3 million, and Nipco Plc achieved N1.0 million.
But the most active stock by volume was IPWA Plc with 8.8 million units, IGI Plc transacted 1.1 million units, Food Concepts Plc recorded 0.334 million, FrieslandCampina Wamco Nigeria Plc traded 0.164 million units, and Air Liquide Plc exchanged 0.159 million units.
By Dipo Olowookere
The shares of Med-View Airline Plc, Capital Oil Plc, and Goldlink Insurance Plc have been delisted from the trading platform of the Nigerian Exchange (NGX) Limited.
This action followed the inability of the companies to meet the standards of the NGX for trading its securities.
In a notice, Customs Street delisted the equities of the publicly-quoted firms from Thursday, April 3, 2025, “on the grounds that they are operating below the listing standards of NGX, and their securities are no longer considered suitable for continued listing and trading in the market.”
It was stated that the removal of the three organisations was in compliance with the provisions of Clause 14 of the Amended Form of General Undertaking, for listing on Nigerian Exchange Limited General Undertaking.
This clause states that, “The exchange reserves the right to, at its sole and absolute discretion, suspend trading in any listed securities of the issuer, delist such securities, or remove the name of the issuer from the daily official list of the exchange with or without prior notice to the issuer, upon failure of the issuer to comply with any one or more of the provisions of this General Undertaking, or when in its sole discretion, The exchange determines that such suspension of trading or delisting is in the public interest, or otherwise warranted.”
Business Post reports that the last share price of Capital Oil on the Nigerian Exchange before its exit was 20 Kobo, Goldlink Insurance was also 20 Kobo, while Med-View Airline was N1.62.
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