Economy
Futures Pointing to Modestly Higher Open on Wall Street
By Investors Hub
Major U.S. index futures are pointing to a modestly higher opening on Thursday following the mixed performance seen in the previous session.
The upward momentum on Wall Street comes following the release of a report from the Labor Department showing an unexpected drop in initial jobless claims in the week ended October 28th.
A separate report from the Labor Department showed a bigger than expected increase in labor productivity in the third quarter, with output jumping by much more than hours worked.
Traders are also digesting the Bank of England’s decision to raise interest rates for the first time in over a decade.
Later in the day, trading may be impacted by President Donald Trump’s expected announcement of his nominee as the next Federal Reserve Chair.
Multiple media sources have reported that Trump intends to nominate Fed Governor Jerome Powell to replace current Fed Chair Janet Yellen.
House Republicans are also expected to unveil the draft of their tax reform legislation after postponing the release by a day due to disagreements about how to offset the cost of the nearly $6 trillion in tax cuts included in the bill.
Stocks turned mixed over the course of the trading session on Wednesday after initially moving to the upside. The major averages reached record intraday highs early in the session before giving back ground.
The major averages ended the day on opposite sides of the unchanged line. While the Nasdaq edged down 11.14 points or 0.2 percent to 6,716.53, the Dow rose 57.77 points or 0.3 percent to 23,435.01 and the S&P 500 inched up 4.10 points or 0.2 percent to 2,579.36.
The mixed close on Wall Street came following the Federal Reserve’s announcement of its latest monetary policy decision.
The Fed left interest rates unchanged as widely expected and offered support for the December rate hike that most economists are predicting.
The statement from the central bank said data received since the September meeting indicates the labor market has continued to strengthen and that economic activity has been rising at a solid rate despite hurricane-related disruptions.
The Fed said inflation for items other than food and energy remained soft but continued to predict inflation would stabilize around its 2 percent objective over the medium term.
The central bank also reiterated its expectation that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate.
“Given the strong economy and jobs market, inflation pressures gradually building and Fed officials broadening out the reasons behind hiking – such as financial conditions, asset valuations and financial stability issues – we are still sticking to our view of a December rate hike,” said ING Senior Economist James Knightley.
He added, “This is 80% priced in by financial markets with the main risk coming from the potential for an economically damaging government shutdown in the absence of an agreement to raise the debt ceiling.”
Earlier in the day, payroll processor ADP released a report showing stronger than expected private sector job growth in the month of October.
ADP said private sector employment climbed by 235,000 jobs in October after rising by a downwardly revised 110,000 jobs in September.
Economists had expected an increase of about 200,000 jobs compared to the addition of 135,000 jobs originally reported for the previous month.
The bigger than expected increase came after private sector employment grew at its slowest rate in nearly a year in September.
A separate report from the Institute for Supply Management showed a slowdown in the pace of growth in the manufacturing sector in October.
The ISM said its purchasing managers index fell to 58.7 in October from 60.8 in September, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to edge down to 59.5.
The bigger than expected pullback by the manufacturing index came after it jumped to its highest level in over thirteen years in the previous month.
Natural gas stocks turned in a strong performance on the day, with the NYSE Arca Natural Gas Index jumping by 2.2 percent. With the gain, the index ended the session at its best closing level in almost a month.
Within the natural gas sector, Devon Energy (DVN) posted a standout gain after reporting third quarter earnings that exceeded analyst estimates.
Notable strength was also visible among other energy stocks even though the price of crude oil for December delivery edged lower.
Steel stocks also showed a strong move to the upside, driving the NYSE Arca Steel Index up by 1 percent. U.S. Steel (X) led the sector higher after reporting better than expected third quarter results.
On the other hand, telecom stocks saw substantial weakness, dragging the NYSE Arca North American Telecom Index down by 2.8 percent. The index ended finished the day at its lowest closing level in well over a year.
Frontier Communications (FTR) posted a steep loss after reporting a narrower than expected third quarter loss but weaker than expected revenues.
By Adedapo Adesanya
Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.
The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”
The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).
Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,
Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”
On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
By Adedapo Adesanya
The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.
This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.
She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.
Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.
She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).
Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.
She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.
“To address these issues, the commission has initiated a comprehensive review of its investment regulations.
“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.
She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.
“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.
“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.
“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.
“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.
She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.
“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,
Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.
“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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