Economy
Major US Index Futures Open Higher After Tuesday’s Sharp Pullback
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Wednesday following the sharp pullback seen late in the previous session.
Renewed optimism about upcoming U.S.-China trade talks may generate initial buying interest after a report from Bloomberg News said China is still open to reaching a partial trade deal with the U.S.
An official with direct knowledge of the talks told Bloomberg that negotiators aren?t optimistic about securing a broad agreement to end the U.S.-China war but said China would accept a limited deal as long as President Donald Trump does not impose any more tariffs.
In return, the official told Bloomberg, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points.
The positive reaction to the report reflects the intense focus on the next round of high-level trade talks set to begin on Thursday.
Nonetheless, overall trading activity may be somewhat subdued as traders look ahead to the release of the minutes of the Federal Reserve?s latest monetary policy meeting.
The minutes may shed additional light on the Fed?s decision to cut interest by 25 basis points in September and provide clues about the outlook for future rate cuts.
After coming under pressure early in the session, stocks regained some ground over the course of the trading day on Tuesday before pulling back sharply going into the close. The major averages ended the day firmly in negative territory.
The Nasdaq and the S&P 500 fell to new lows in late-day trading, while the Dow remained off its worst levels. The Dow still slumped 313.98 points or 1.2 percent to 26,164.04, the Nasdaq plunged 132.52 points or 1.7 percent to 7,823.78 and the S&P 500 tumbled 45.73 points or 1.6 percent to 2,893.06.
Selling pressure re-emerged late in the session following news the Trump administration imposed visa restrictions on Chinese officials over abuses of Muslim minorities in the Xinjiang region.
The new visa restrictions come just two days before the U.S. and China are scheduled to resume high-level trade talks in Washington.
Optimism about the trade talks had already waned after a report from the South China Morning Post said China is subtly toning down expectations ahead of this week’s high-level negotiations.
The SCMP said Chinese Vice Premier Liu He is leading China’s delegation to Washington but will not carry the title of “special envoy” for President Xi Jinping, an early indication that Liu has not been given any particular instructions from China’s leader.
A source briefed on preparations for the trade talks also told the SCMP that the Chinese delegation may cut short their stay in Washington.
News the U.S. has expanded its trade blacklist to include some of China’s top artificial intelligence firms has also cast a shadow over the talks along with a Bloomberg report the White House is discussing blocking government pension funds from investing in China.
Meanwhile, traders largely shrugged off a Labor Department report showing an unexpected decrease in U.S. producer prices in the month of September.
The Labor Department said its producer price index for final demand fell by 0.3 percent in September after inching up by 0.1 percent in August. The drop surprised economists, who had expected another 0.1 percent uptick.
Excluding food and energy prices, core producer prices also slid by 0.3 percent in September after climbing by 0.3 percent in August. Economists had expected core prices to rise by 0.2 percent.
The tame inflation data may clear the way for the Federal Reserve to continue cutting interest rates amid signs of slowing economic growth.
In remarks at the National Association for Business Economics annual meeting in Denver, Colorado, Fed Chairman Jerome Powell reiterated his pledge to “act as appropriate” to support continued growth, a strong job market, and inflation moving back to the Fed’s symmetric 2 percent objective.
Powell also indicated that the central bank intends to resume increasing the size of its balance sheet following recent, unexpectedly intense volatility in wholesale funding markets.
Semiconductor stocks showed a substantial move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 3.1 percent to its lowest closing level in over a month.
Chipmaker Ambarella (AMBA) posted a particularly steep loss after one of its Chinese customers was blacklisted by the U.S. government.
Significant weakness was also visible among natural gas stocks, as reflected by the 3 percent nosedive by the NYSE Arca Natural Gas Index. The index ended the session at a nearly fifteen-year closing low.
Biotechnology, computer hardware, and banking stocks also saw considerable weakness on the day, reflecting broad based selling pressure on Wall Street.
Meanwhile, gold stocks were among the few groups to buck the downtrend, with the NYSE Arca Gold Bugs Index surging up by 3 percent.
The rally by gold stocks came as the price of the precious metal moved to the upside in electronic trading after ending the regular session slightly lower.
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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