Economy

Currency Markets in Focus Amid Escalating Trade War

Published

5 years ago

07/08/2019

By Investors Hub

The major U.S. index futures are currently pointing to a lower opening on Wednesday, with stocks likely to move back to the downside following yesterday’s notable rebound.

The downward momentum on Wall Street comes as the escalating U.S.-China trade war has investors paying close attention to daily developments on the currency front.

The People’s Bank of China set the midpoint for onshore yuan trading at 6.9996 per dollar, slightly stronger than the key 7.00 per dollar level but 0.4 percent weaker than 6.9683 on Tuesday.

The Chinese central bank setting the midpoint for the Chinese currency at a stronger than expected level contributed yesterday’s rally.

Negative sentiment may also be generated in reaction to disappointing earnings from Disney (DIS), with the entertainment giant slumping by nearly 5 percent in pre-market trading.

After the close of trading on Tuesday, Disney reported fiscal third quarter results that missed analyst estimates on both the top and bottom lines.

Overall trading activity may be somewhat subdued, however, as another light day on the U.S. economic front may keep some traders on the sidelines.

The economic calendar remains relatively sparse throughout the week, although a report on producer price inflation may attract attention on Friday.

Following the sell-off seen on Monday, stocks showed a strong move back to the upside during trading on Tuesday. The major averages fluctuated after an early upward move but maintained a positive bias throughout the session.

The major averages finished the session near their best levels of the day. The Dow jumped 311.78 points or 1.2 percent to 26,029.52, the Nasdaq soared 107.23 points or 1.4 percent to 7,833.27 and the S&P 500 surged up 37.03 points or 1.3 percent to 2,881.77.

The strength on Wall Street was partly due to bargain hunting, with traders picking up stocks at reduced levels after the major averages ended Monday’s trading at their lowest closing levels in two months.

News the People’s Bank of China set the midpoint for the Chinese currency at a stronger than expected level also helped ease investor jitters.

A recent drop in the value of the Chinese yuan further fueled speculation Beijing is devaluing its currency to counter President Donald Trump’s latest tariff threat.

After refusing to do so several times in the past, Treasury Secretary Steven Mnuchin officially declared China a currency manipulator on Monday.

The Treasury Department said Mnuchin will subsequently engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions.

In a tweet this morning seemingly aimed at calming the markets, Trump claimed, “Massive amounts of money from China and other parts of the world is pouring into the United States for reasons of safety, investment, and interest rates!”

“We are in a very strong position. Companies are also coming to the U.S. in big numbers. A beautiful thing to watch!” he added.

Telecom stocks showed a significant move to the upside after falling sharply over the past few sessions, with the NYSE Arca North American Telecom Index jumping by 2 percent after ending Monday’s trading at its lowest closing level in well over two months.

Significant strength also emerged among biotechnology stocks, as reflected by the 1.7 percent gain posted by the NYSE Arca Biotechnology Index. The index bounced off a two-month closing low.

Software, healthcare, retail and utilities stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.

Meanwhile, energy stocks bucked the uptrend, as the price of crude oil showed another steep drop amid concerns about the outlook for global energy demand.

Economy

Afriland Properties, Geo-Fluids Shrink OTC Securities Exchange by 0.06%

Published

5 hours ago

12/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.

The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.

Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.

At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.

The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.

When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.

Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.

Economy

Naira Weakens to N1,547/$1 at Official Market, N1,670/$1 at Black Market

Published

6 hours ago

12/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The euphoria around the recent appreciation of the Naira eased on Wednesday, December 11 after its value shrank against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N5.23 or 0.3 per cent to N1,547.50/$1 from the N1,542.27/$1 it was valued on Tuesday.

It was observed that spectators’ activities may have triggered the weakening of the local currency in the official market at midweek as they tried to fight back and ensure the value of funds in foreign currencies strengthened.

The domestic currency was regaining its footing after the Central Bank of Nigeria (CBN) launched an Electronic Foreign Exchange Matching System (EFEMS) platform to tackle speculation and improve transparency in Nigeria’s FX market.

At midweek, the Nigerian currency depreciated against the Pound Sterling by N3.56 to close at N1,958.68/£1 compared with the preceding day’s N1,955.12/£1 and against the Euro, it slumped by 34 Kobo to trade at N1,612.66/€1, in contrast to the previous session’s N1,613.00/€1.

As for the black market segment, the Naira lost N45 against the American currency during the session to quote at N1,670/$1 compared with the N1,625/$1 it was traded a day earlier.

A look at the cryptocurrency market showed a recovery following profit-taking as the US Consumer Price Index report matched economist forecasts.

The news was enough to convince traders that the Federal Reserve is certain to trim its benchmark fed funds rate another 25 basis points at its meeting next week.

The move also saw Bitcoin (BTC), the most valued coin, return to the $100,000 mark as it added a 2.9 per cent gain and sold for $100,566.12.

The biggest gainer was Cardano (ADA), which jumped by 15.00 per cent to trade at $1.16, as Litecoin (LTC) appreciated by 10.4 per cent to sell for $121.76, and Ethereum (ETH) surged by 7.0 per cent to $3,929.30, while Dogecoin (DOGE) recorded a 6.7 per cent growth to finish at $0.4181.

Further, Binance Coin (BNB) went up by 5.2 per cent to $716.72, Solana (SOL) expanded by 4.6 per cent to $229.77, and Ripple (XRP) increased by 4.2 per cent to $2.43, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.

Economy

Dangote Refinery Makes First PMS Exports to Cameroon

Published

7 hours ago

12/12/2024

Aduragbemi Omiyale

By Aduragbemi Omiyale

The Dangote Refinery located in the Lekki area of Lagos State has made its first export of premium motor spirit (PMS) just three months after it commenced the production of petrol.

In September 2024, the refinery produced its first petrol and began loading to the Nigerian National Petroleum Company (NNPC) on September 15.

However, due to some issues, the facility has not been able to flood the local market with its product, forcing it to look elsewhere.

In a landmark move for regional energy integration, Dangote Refinery has partnered with Neptune Oil to take its petrol to neighbouring Cameroon.

Neptune Oil is a leading energy company in Cameroon which provides reliable and sustainable energy solutions.

Dangote Refinery said this development showcases its ability to meet domestic needs and position itself as a key player in the regional energy market, adding that it represents a significant step forward in accessing high-quality and locally sourced petroleum products for Cameroon.

“This first export of PMS to Cameroon is a tangible demonstration of our vision for a united and energy-independent Africa.

“With this development, we are laying the foundation for a future where African resources are refined and exchanged within the continent for the benefit of our people,” the owner of Dangote Refinery, Mr Aliko Dangote, said.

His counterpart at Neptune Oil, Mr Antoine Ndzengue, said, “This partnership with Dangote Refinery marks a turning point for Cameroon.

“By becoming the first importer of petroleum products from this world-class refinery, we are bolstering our country’s energy security and supporting local economic development.

“This initial supply, executed without international intermediaries, reflects our commitment to serving our markets independently and efficiently.”