Economy
Futures Pointing to Initial Strength on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Tuesday following the mixed performance seen in the previous session.
Stocks may benefit from optimism about the economic impact of the tax reform bill approved by Senate Republicans over the weekend.
With the vote to approve the bill, lawmakers from the Senate and House will need to go to conference to work out differences in the bills passed by the two chambers.
Stocks turned mixed over the course of the trading session on Monday after an initial move to the upside. While the Dow reached a new record closing high, the Nasdaq and the S&P 500 ended the day in negative territory.
The Dow rose 58.46 points or 0.2 percent to 24,290.05, but the Nasdaq tumbled 72.22 points or 1.1 percent to 6,775.37 and the S&P 500 edged down 2.78 points or 0.1 percent to 2,639.44.
Traders were reacting to news that Senate Republicans narrowly approved a massive tax reform bill early Saturday morning.
The Senate voted 51 to 49 in favor of the bill known as the Tax Cuts and Jobs Act, with the vote largely coming down along party lines.
Senator Bob Corker, R-Tenn., was the only Republican to vote against the bill amid concerns about the legislation’s impact on the budget deficit.
“With the great vote on Cutting Taxes, this could be a big day for the Stock Market – and YOU!” President Donald Trump said in a post on Twitter.
With the vote to approve the bill, lawmakers from the Senate and House will need to go to conference to work out differences in the bills passed by the two chambers.
The pullback by the Nasdaq partly reflected concerns that technology companies will not benefit as much from the tax cuts.
On the U.S. economic front, the Commerce Department released a report showing a modest decrease in new orders for manufactured goods in the month of October.
The report said factory orders edged down by 0.1 percent in October after surging up by 1.7 percent in September. Economists had expected orders to drop by 0.4 percent.
Transportation stocks showed a substantial move to the upside on the day, driving the Dow Jones Transportation Average up by 1.8 percent. With the gain, the average reached a new record closing high.
Union Pacific (UNP) UPS (UPS) and FedEx (FDX) turned in some of the transportation sector’s best performances.
Significant strength was also visible among banking stocks, as reflected by the 2.2 percent gain posted by the Dow Jones Banks Index. The index has climbed to its best closing level in ten years.
Steel, brokerage, and housing stocks also saw notable strength, while weakness among software, semiconductor, and biotechnology stocks contributed to the drop by the tech-heavy Nasdaq.
By Adedapo Adesanya
Nigerian billionaire investor, Mr Femi Otedola, has announced plans to invest $100 million in the Dangote Refinery, which plans to list later this year.
Mr Otedola disclosed this on Wednesday after leading a delegation of top executives from First HoldCo on a visit to the Dangote refinery.
“On a personal note, I’ve appealed to him (Aliko Dangote). I’ve been here with him 25 times, so my compensation is he’s going to allocate to me shares worth $100 million in the private placement,” the billionaire said.
Mr Otedola had previously denied that he had any stake or funded the construction of a 650,000 barrels per day facility.
The announcement marks his next big move after increasing his stake in First Holdco as well as buying a $10 million property in London.
Mr Dangote last year said the refinery could sell up to 10 per cent stake in the listing, which is valued at about $5 billion. It is aiming for a valuation of up to $50 billion for Dangote refinery.
The billionaire is planning to make the IPO a cross-border listing to enable the refinery to draw investments from domestic and international investors.
Mr Dangote, this week, said the IPO is designed to democratise wealth creation and give Africans direct access to participate in the continent’s industrial transformation.
On his part, Mr Dangote, president of the Dangote Group, says the company is targeting a private placement of about $2 billion for the refinery.
While the actual date for the IPO is yet to be announced, Mr Otedola’s early investment indicates value and could spur other high-net-worth individuals to show interest.
Mr Otedola, an ally of Mr Dangote, led top executives of First HoldCo on a tour of the refinery and the fertiliser plants in the Lekki free trade zone area.
The team also visited key project sites such as the jetty, a facility built by Dangote industries to receive large vessels.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further chalked up 0.32 per cent on Wednesday, May 20, spurred by price appreciation in 11 Plc, and Central Securities and Clearing System (CSCS) Plc.
11 Plc, which used to be known as Mobil, added N22.11 to sell at N243.21 per unit compared with the previous day’s N221.10 per unit, and CSCS Plc gained N1.19 to trade at N71.81 per share versus Tuesday’s N70.62 per share.
The growth posted by the duo raised the market capitalisation by N8.04 billion to N2.495 trillion from N2.487 trillion, and lifted the NASD Unlisted Security Index (NSI) by 13.44 points to 4,171.19 points from 4,157.75 points.
Yesterday, there were two price losers, led by Nipco Plc, which shed N22.60 to close at N287.00 per unit compared with the preceding day’s N309.60 per unit, and FrieslandCampina Wamco, which lost 84 Kobo to sell for N150.95 per share, in contrast to the N151.79 per share it was traded a day earlier.
The volume of trades recorded at midweek dipped by 99.9 per cent to 2.3 million units from 1.9 billion units, the value of transactions fell by 93.7 per cent to N334.2 million from the preceding session’s N5.3 billion, and the number of deals went down by 43.3 per cent to 34 deals from 60 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion sold for N6.5 billion, and CSCS Plc with 60.9 million units exchanged for N4.1 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Adedapo Adesanya
The Naira broke its weakening streak in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, May 20, after it appreciated against the US Dollar by 53 Kobo or 0.04 per cent to trade at N1,373.34/$1, in contrast to Tuesday’s closing rate of N1,373.87/$1.
The domestic currency also improved its value against the Euro in the official FX market during the midweek session by N1.99 to close at N1,592.53/€1 compared with Tuesday’s closing value of N1,594.52/€1, but depreciated against the Pound Sterling at the official FX market during the midweek session by 39 Kobo to trade at N1,840.00/£1 versus the previous day’s value of N1,839.61/£1.
Data from GTBank FX bench showed that the Naira appreciated against the Dollar yesterday by N2 to sell at N1,379/$1 versus N1,381/$1, but closed flat in the parallel market at N1,390/$1.
The performance of the local currency in the different segments of the forex market comes as the Central Bank of Nigeria (CBN) insisted that it is no longer aggressively intervening in the foreign exchange market to defend the Naira, as it held interest rate steady despite happenings in the global economy.
Governor of the apex bank, Mr Yemi Cardoso, disclosed after the Monetary Policy Committee (MPC) meeting in Abuja on Wednesday that the structure of Nigeria’s foreign exchange market has changed significantly under the ongoing reforms, adding that increased market liquidity has reduced the need for heavy intervention by the CBN.
Currency traders and investors are expected to continue monitoring CBN policy direction, foreign portfolio inflows, crude oil earnings, and external reserve performance as key indicators influencing the naira’s trajectory in the coming months.
According to Mr Cardoso, the CBN will continue with its current policy direction to sustain the fight against inflation and stabilise the exchange rate.
He described exchange rate stability as the centrepiece of the apex bank’s policy toolkit and stressed the need for stronger collaboration between monetary and fiscal authorities to reduce inflationary pressures in the economy.
As for the cryptocurrency market, it was in green on Wednesday as the US Securities and Exchange Commission (SEC) is delaying the launch of a recent wave of “novel ETFs,” including those that offer prediction-market style event contracts, to consider the implications of introducing the new products.
Prediction markets have become one of crypto’s hottest use cases over the past 18 months and now consistently record more than $15 billion in monthly trading volume across markets spanning from sports and elections to financial results and cultural events.
Dogecoin (DOGE) appreciated by 2.2 per cent to $0.1058, Solana (SOL) grew by 1.99 per cent to $86.42, Binance Coin (BNB) jumped 1.6 per cent to $652.01, TRON (TRX) rose by 1.4 per cent to $0.3604, Bitcoin (BTC) improved by 0.8 per cent to $77,769.62, Ethereum (ETH) soared by 0.5 per cent to $2,135.25, and Ripple (XRP) gained 0.5 per cent to quote at $1.37.
However, Cardano (ADA) dropped 0.4 per cent to trade at $0.2490, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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