Economy
M&A News Generates Early Buying Interest on Wall Street
By Investors Hub
The major U.S. index futures are currently pointing to a higher opening on Monday following the modest pullback seen last week.
The markets may benefit from continued optimism about a U.S.-China trade agreement after a tabloid run by China?s ruling Communist Party discounted ?negative? media reports and said the economic superpowers are ?very close? to a phase one deal.
China also remains committed to continuing talks for a phase two or even a phase three deal with the United States, the state-backed Global Times said on Twitter.
President Donald Trump and Chinese President Xi Jinping have also recently made positive comments about a potential trade deal despite reports of complications arising that could delay the agreement until next year.
News on the merger-and-acquisition front may also generate positive sentiment, as the deals suggest companies remain confident even with the uncertainty created by the U.S.-China trade dispute.
Nonetheless, overall trading activity may be somewhat subdued ahead of the Thanksgiving Day holiday on Thursday.
A lack of major U.S. economic data may also keep traders on the sidelines ahead of the release of reports on new home sales, consumer confidence, durable goods orders, and personal income and spending in the coming days.
After moving mostly lower over the past few sessions, stocks turned in a lackluster performance during trading on Friday. The major averages showed a lack of direction but managed to end the session modestly higher.
The Dow rose 109.33 points or 0.4 percent to 27,875.62, the Nasdaq edged up 13.67 points or 0.2 percent to 8,519.88 and the S&P 500 inched up 6.75 points or 0.2 percent to 3,110.29.
Despite the gains on the day, the major averages all moved lower for the week. The Dow fell by 0.5 percent, while the Nasdaq and the S&P 500 dipped by 0.2 percent and 0.3 percent, respectively.
The choppy trading on the day came as traders seemed reluctant to make significant moves amid lingering uncertainty about a U.S.-China trade deal.
Recent reports have suggested the signing of a phase one trade deal could be delayed until next year as U.S. and Chinese officials struggle to reach agreement on core issues.
The next round of U.S. tariffs on Chinese goods is set to take effect on December 15th, potentially complicating efforts to reach an agreement.
In remarks at Bloomberg’s New Economy Forum in Beijing, Chinese President Xi Jinping said China wants to work toward a phase one agreement on the basis of mutual respect and equality but will fight back if necessary.
Xi met with former U.S. Secretary of State Henry Kissinger at the forum, reportedly describing U.S.-China relations as being at a critical juncture
“China and the United States should step up communication on strategic concerns to avoid misjudgment and enhance mutual understanding,” Xi told Kissinger, according to China’s state-run Xinhua News Agency.
Meanwhile, President Donald Trump said in an interview on Fox News this morning that a trade agreement with China is “very close” and that the two economic superpowers have a “very good chance to make a deal.”
Traders largely shrugged off a report from the University of Michigan showing a much bigger than expected upward revision to its reading on U.S. consumer sentiment in the month of November.
The report said the consumer sentiment index for November was upwardly revised to 96.8 from the preliminary reading of 95.7. The revised reading is well above the final October reading of 95.5.
Steel stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Steel Index up by 2.1 percent.
Significant strength also emerged among natural gas stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Natural Gas Index.
The strength in the natural gas sector came amid a substantial increase by the price of the commodity, as natural gas for December delivery jumped $0.098 or 3.8 percent to $2.665 per million BTUs.
Banking and transportation stocks also moved to the upside on the day, while notable weakness among computer hardware stocks led to a 1.5 percent drop by the NYSE Arca Computer Hardware Index.
By Adedapo Adesanya
Brent futures climbed $1.06 or 1.3 per cent to $83.55 a barrel on Friday amid ongoing uncertainty about the negotiations in progress that determine control of and reopening of the key shipping artery of the Strait of Hormuz.
In the same vein, the US West Texas Intermediate (WTI) futures finished at $78.18 a barrel after it chalked up 89 cents or 1.15 per cent.
Iran is reviewing a bill to ban American and Israeli vessels from the Strait of Hormuz, through which roughly a fifth of the world’s oil and liquefied natural gas normally passed before the war began at the end of February.
Market analysts noted that while this week’s signals on a potential deal have sent a roller-coaster ride in market sentiment, the market remains in the dark as to what needs to happen for the agreement to be clinched.
Part of the question being asked is whether the Iran-Oman agreement would allow a US-flagged vessel to transit the Strait of Hormuz or allow a vessel headed for an American port to go through.
Shipping through Hormuz remains heavily constrained as Middle East oil production is still well below pre-war levels while attacks on commercial vessels have continued even as negotiators discuss possible arrangements for the waterway.
Some also said that this week’s developments have signalled that hostilities between Iran and the US are not yet over. This is because the proposed deal is not easily workable because of sanctions and restrictive insurance clauses on any payments by the US government.
Iran is seeking fees of between 5 per cent and 7 per cent of the price of cargoes from ships using the strait, while Oman is discussing fees of about 3 per cent, while the Donald Trump administration wants no fees at all.
Citi has raised its third-quarter Brent crude forecast to $80 per barrel from $75 as the war drags on and repeated attempts at a deal fail to restore normal oil flows through the strait.
The bank still expects the conflict to be resolved, but the five-month war has lasted longer than Citi anticipated and kept more geopolitical risk in crude prices. Citi left its fourth-quarter Brent forecast unchanged at $70 per barrel and still sees the benchmark averaging $65 in 2027.
By Adedapo Adesanya
Nigerian businessman and chief executive of Dangote Industries Limited, Mr Aliko Dangote, has unveiled plans for a new phase of investments and acquisitions as the conglomerate pushes towards its target of generating $100 billion in annual revenue by 2030.
Mr Dangote disclosed this while receiving a delegation of senior executives from global investment banking and financial services firm Goldman Sachs, led by co-chief executive of Goldman Sachs International and Global Co-Head of Investment Banking, Mr Anthony Gutman, during a tour of the Dangote Petroleum Refinery & Petrochemicals and Dangote Fertiliser Limited complex in Lagos.
Speaking after the visit, Mr Dangote said the refinery and associated industrial facilities underscore the transformative impact of long-term investment in Africa, stressing that the group’s ambitions extend beyond its current strategic plan.
“No matter how we try to explain what we have built, you cannot fully appreciate it until you see it. But this is only the beginning. We need to look beyond 2030.
“The next phase of our journey will include new investments and acquisitions as we continue to scale the business,” he said.
He added that detailed internal modelling had reinforced management’s confidence that the Group’s target of generating $100 billion in annual revenue by 2030 was achievable.
According to him, the projections were based on conservative assumptions and had strengthened the company’s conviction to pursue an even more ambitious long-term growth strategy.
Mr Dangote also revealed that the strong participation of employees in the refinery’s recent private placement reflected growing internal confidence in the company’s long-term strategy and future prospects.
The Goldman Sachs delegation, after an extensive tour of the 700,000 barrels-per-day refinery, described the project as an extraordinary achievement.
“It is extraordinary what Mr Dangote and the whole organisation have achieved. The ambition, the scale of the project, the quality of the project and the culture of the people is very impressive,” the executives said.
According to a statement issued by Dangote Group on Friday, the delegation was led by Mr Anthony Gutman and included Mr Adib N. Zouein, Co-Head of EMEA Emerging Markets Regional Sales and Head of the Middle East and North Africa region for Global Banking & Markets Public; Mr Ryad Yousuf, Global Head of FICC Sales Strats and Structuring; and Mr Jimi Adesanya, Head of Sub-Saharan Africa Sales (excluding South Africa).
The visitors were received by Dangote; Group Vice President, Oil & Gas, Mr Devakumar Edwin; Managing Director and Chief Executive Officer of Dangote Petroleum Refinery & Petrochemicals, Mr David Bird; Group Executive Director, Oil & Gas, Ms Fatima Aliko Dangote; Chief of Staff to the President/CEO, Ibrahim Dikko; Group Chief Branding and Communication Officer, Mr Anthony Chiejina; Group Chief Economist, Mr Hassan Mahmud; Group Chief Strategy Officer, Mr Aliyu Suleiman; and Head of Administration, Dangote Petroleum Refinery & Petrochemicals, Mr Musa Bala, among other senior executives.
By Adedapo Adesanya
The Senate Public Accounts Committee has heard that Nigeria spent N1.16 trillion on fuel subsidy in 2021, while N1.20 trillion was deducted from federation crude oil sales proceeds during the same period.
The disclosure came from the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr Mohammed Bello Shehu, during the committee’s ongoing investigation into the 2021 to 2023 Nigeria Extractive Industries Transparency Initiative (NEITI) audit reports on the oil and gas sector.
According to the commission, crude and petroleum product losses cost N16.2 billion, pipeline repairs accounted for N22.05 billion, while strategic stock holding attracted N6.75 billion.
The revelations come against the backdrop of Nigeria’s long-running fuel subsidy regime, which successive governments maintained to keep the pump price of petrol artificially low despite mounting fiscal pressures.
Over the years, subsidy payments consumed trillions of Naira, significantly reducing revenues available to the three tiers of government and contributing to widening budget deficits.
The issue reached a turning point in May 2023 when President Bola Tinubu announced the removal of fuel subsidy during his inauguration speech, declaring that “fuel subsidy is gone.” The decision followed years of concerns over the rising cost of the programme, allegations of fraud, and repeated recommendations by fiscal authorities and international financial institutions that the subsidy had become unsustainable.
The removal triggered a sharp increase in the pump price of Premium Motor Spirit (petrol), leading to higher transportation and living costs across the country. In response, the federal government introduced a series of palliative measures, including cash transfers, support for mass transit, and wage-related interventions, while arguing that savings from the subsidy would be redirected to infrastructure, education, healthcare, and other critical sectors of the economy.
The commission also argued that the current method of calculating the 13 per cent derivation fund undermines the constitutional intention of the policy.
Meanwhile, the committee stood down the Niger Delta Development Commission’s presentation until next Wednesday to allow lawmakers review its submission.
The committee also expressed displeasure over the absence of the Auditor-General of the Federation, warning that he must appear before lawmakers next Tuesday or face compulsory appearance through the constitutional powers of the National Assembly.
