Economy

Global Economic Worries Weigh on Wall Street

Published

6 years ago

23/09/2019

By Investors Hub

The major U.S. index futures are currently pointing to a lower opening on Monday, with stocks likely to extend the downward move seen last Friday.

Renewed concerns about the global economic outlook may generate some selling pressure following the release of disappointing European economic data.

Survey data from IHS Markit showed the euro area private sector was close to stalling at the end of the third quarter. The flash composite output index unexpectedly fell to a 75-month low of 50.4 in September from 51.9 in August.

Germany’s private sector contracted the most since late 2012 as a downturn in manufacturing deepened and service sector growth lost momentum.

Waning optimism about a potential U.S.-China trade deal may also weigh on the markets after the Chinese cut short a visit to the U.S. last week and President Donald Trump indicated he is not in a hurry to reach an agreement.

Overall trading activity may be somewhat subdued, however, as a lack of major U.S. economic data may keep some traders on the sidelines.

Reports on consumer confidence, new home sales, durable goods orders and personal income and spending are likely to attract attention in the coming days.
After seeing modest strength throughout the morning, stocks once again came under pressure in afternoon trading on Friday. The major averages pulled back well off their best levels of the day and firmly into negative territory.

The major averages ended the day off their lows of the session but stuck in the red. The Dow fell 159.72 points or 0.6 percent to 26,935.07, the Nasdaq slid 65.20 points or 0.8 percent to 8,117.67 and the S&P 500 dropped 14.72 points or 0.5 percent to 2,992.07.

With the downturn on the day, the major averages also moved lower for the week, the Dow slumped by 1 percent, while the Nasdaq and the S&P 500 fell by 0.7 percent and 0.5 percent, respectively.

Stocks showed a notable move to the downside on news Chinese trade negotiators canceled a scheduled visit to U.S. farm states next week.

The Chinese delegation was in Washington this week for deputy-level trade talks and had been scheduled to visit American farms next week as a gesture of goodwill.

However, the Montana Farm Bureau revealed that the visit has been canceled, as the delegation is heading back to China sooner than expected.

The news offset some of the recent optimism about a potential end to the U.S.-China trade war, with the deputy-level talks expected to help pave the way for more productive high-level talks next month.

Comments from President Donald Trump indicating he is not interested in a “partial deal” with China also dashed hopes of a possible “interim deal.”

Trump also told reporters he doesn’t think he needs to reach a trade deal with China before the 2020 elections, claiming the U.S. is not being affected by the trade war.

Uncertainty about the outlook for interest also weighed on stocks, with Boston Federal Reserve President Eric Rosengren arguing that it is not necessary and potentially risky for the central bank to continue lowering rates.

Rosengren noted in a speech at the Stern School of Business at New York University that the U.S. economy has held up well in the face of trade-related impediments.

“Additional accommodation is not needed for an economy where labor markets are already tight – and risks further inflating the prices of riskier assets, and encouraging households and firms to take on what may be too much leverage,” Rosengren said.

Reflecting a divide at the Fed, Rosengren’s speech came the same day St. Louis Fed President James Bullard released a statement explaining his preference for cutting interest rates by 50 basis points at the Fed meeting earlier this week.

Bullard cited signs that U.S. economic growth is expected to slow in the near horizon as well as continued indications of low inflation.

Semiconductor stocks showed a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 1.8 percent.

Xilinx (XLNX) posted a steep loss after the chipmaker said its CFO Lorenzo Flores is stepping down from his position to pursue another executive opportunity.

Considerable weakness also emerged among computer hardware stocks, as reflected by the 1.4 percent drop by the NYSE Arca Computer Hardware Index.

Retail, tobacco, and oil service stocks also came under pressure over the course of the session, while gold and pharmaceutical stocks showed strong moves to the upside.

Economy

Overdue FX Contracts: Manufacturers Accuse Banks of Incessant Harassment

Published

2 hours ago

23/05/2025

Adedapo Adesanya

By Adedapo Adesanya

The Manufacturers’ Association of Nigeria (MAN) has claimed that banks were harassing its members over outstanding forward foreign exchange (FX) contracts with the Central Bank of Nigeria (CBN).

According to reports by Bloomberg, members have faced penalties, including frozen accounts over the impasse, while others are constantly being harassed.

The contracts were from the Nigeria’s previous controlled FX regime, which was liberalised in June 2023, when the CBN announced a set of reforms at the FX market.

The reforms were announced after President Bola Tinubu came to power two years ago, but the Dollar backlog has taken time to pay down, contributing to the volatility of the Naira which has lost about 70 per cent of its value against the American currency.

“Our members have reported significant unwarranted complexities and undue high-handedness by the banks,” the publication reported, citing a statement.

Nigerian companies bid for Dollars via forward contracts via these banks, who then received the US currency from the CBN in exchange for the Naira. Then when the contract ends, the process is reversed.

However, the CBN hasn’t supplied the Dollars and commercial lenders now want the companies to find the Dollars elsewhere.

This is causing strain as options to buy elsewhere will see them buy at higher rate and higher demand may weaken the value of the local currency, creating more problem for manufacturers already facing a hard time.

“We reiterate our call on the Central Bank of Nigeria to speed up the long overdue redemption of the unsettled forex forward, ” MAN said. “Our members should not be harassed.”

The CBN claimed it had settled the necessary backlogs which was around $2.4 billion, claiming that an independent audit saw a lot of unfounded and unverifiable claims.

Bloomberg added that the apex bank initially disputed the claims, but later said it would investigate and settle on merit.

This development comes as manufacturers face a series of headwinds in their operations including transport and logistics, infrastructure, particularly around major ports and industrial corridors, which make the operating environment unconducive for manufacturing.

According to the Director-General of the association, Mr Segun Ajayi-Kadir, the manufacturing sector’s growth was as low as 1.40 per cent in 2023 and declined further to 1.38 per cent in 2024.

He also these challenges are evident in the sector’s capacity utilisation and its contribution to the nation’s economy, which have hovered around 5.5 per cent and 10 per cent respectively, over the past 12 months.

Economy

Renaissance Targets $15bn Investment in Nigerian Oil Fields by 2029

Published

5 hours ago

23/05/2025

Adedapo Adesanya

By Adedapo Adesanya

Renaissance Africa Energy Company Limited is looking to inject $15 billion in its oil fields located onshore and shallow waters of the Niger Delta region in the next five years.

Renaissance Africa, a consortium of indigenous oil firms, recently acquired oil assets earlier held by Shell Petroleum Development Company (SPDC), following divestment by Shell UK from onshore operations in Niger Delta.

Mr Tony Attah, the Managing Director, Renaissance Africa Energy Company Limited said at the 2025 Nigeria Oil and Gas Opportunities Fair (NOGOF) on Thursday in Yenagoa, that the investment would be targeted predominantly to improve the participation of indigenous oil firms in the onshore and shallow waters oil blocks operation.

Represented by Mr Greg Akhibi, General Manager, Supply Chain he said the money would be spent on 32 projects in development of domestic gas, export gas and more crude oil production to balance the predominantly gas portfolio template hitherto operated by SPDC.

“We acquired a total of 112,000 square kilometers acreage of assets and we intend to pursue projects that will balance the assets which were tilted more to gas.

“We are focusing on four project areas to increase oil production and there are upcoming activities in drilling, rigs, pipelines and fabrication businesses.

“We are also looking at 22 projects to increase export in gas production.

“Currently our gas production is at 150 million standard cubic feet of gas per day (MMSCF/D) and we project to hit 300 MMSCF/D with the anticipated increased off-take from the AKK gas pipeline expected to further increase domestic gas utilisation,” Akhibi said.

He noted that the Renaissance Africa remains committed to partnerships with the NCDMB and Nigerian companies in the oil and gas sector to produce energy for Nigeria and the rest of African continent.

This comes as the company exceeded crude oil production targets by 40 per cent in its first month of operating the former Shell assets.

The Nigerian National Petroleum Company (NNPC) Limited hailed the performance in April 2025 as a strong signal of renewed momentum in Nigeria’s upstream sector and a promising step toward boosting national oil output and economic growth.

“This is to commend Renaissance Africa Energy Company Limited, your esteemed leadership team and staff for exceeding the production target in your JV assets for April 2025,” said NNPC in an official letter signed by its Executive Vice President, Upstream, Mr Udobong Ntia.

The state oil company expressed hope that the April milestone would inspire Renaissance “towards accelerating the realisation of the initiatives for incremental production volumes while protecting the base.”

Economy

OTC Exchange Increases Value by N2.38bn

Published

10 hours ago

23/05/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.13 per cent on Thursday, May 22, pushing the market capitalisation of the bourse higher by N2.38 billion to N1.849 trillion from N1.847 trillion quoted at the preceding session, with the Unlisted Security Index (NSI) jumping by 4.08 points to 3,158.24 points from the previous session’s 3,154.16 points.

The expansion was influenced by FrieslandCampina Wamco Nigeria Plc and Central Securities Clearing Systems (CSCS) Plc despite the loss posted by Food Concepts Plc.

FrieslandCampina gained N1.49 to close at N41.50 per share compared with the previous closing value of N40.01 per share and CSCS increased by 16 Kobo to to end at N24.03 per unit, in contrast to Wednesday’s closing price of N23.87 per unit.

However, Food Concepts Plc went down by 5 Kobo during the trading session to close at N1.50 per share compared with midweek’s price of N1.55 per unit.

The volume of securities bought and sold yesterday went up by 13.7 per cent to 452,466 units from the 398,093 units traded in the previous trading day, the value of shares transacted by the market participants declined by 63.7 per cent to N1.5 million from N4.1 million, and the number of deals carried out by investors went down by 10.5 per cent to 17 deals from 19 deals.

When trading activities ended for the day, Impresit Bakolori Plc remained the most active stock by volume on a year-to-date basis with the sale of 536.9 million units worth N524.7 million, followed by Geo-Fluids Plc with 267.1 million units valued at N472.3 million, and Okitipupa Plc with 153.6 million units sold for N4.9 billion.

In the same vein, Okitipupa Plc remained the most traded stock by value on a year-to-date with a turnover of 153.6 million units valued at N4.9 billion, trailed by FrieslandCampina Wamco Nigeria Plc with 21.9 million units worth N844.3 million, and Impresit Bakolori Plc with 536.9 million units sold for N524.7 million.