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Nigerian Stock Market Loses N416b in One Week amid Political Anxiety

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By Dipo Olowookere

The heating up of the political terrain in the country is gradually having a negative effect on the Nigerian stock market, Business Post reports.

During the just-concluded trading week, the Nigerian Stock Exchange (NSE) lost about N416 billion as a result of huge selling pressure at the market.

Analysts had predicted that trading during the week would be positive as a result of improving macroeconomic indices in the domestic space, especially with the further ease in the inflation rate, positive GDP growth, passage of the 2018 budget and retention of the interest at 14 percent by the apex bank.

However, these did nothing to drive the equity market up last week as the stock market did not record any single rise throughout last week.

This was attributed to profit-taking activities by investors, especially foreign investors, who are parts of the major drivers of the local bourse. It was observed that foreign investors are reassessing their portfolio compositions so as to limit their losses as a result of political intrigues in the country ahead of the 2019 general elections.

Business Post reports that at the close of transactions last week, the All-Share Index (ASI) depreciated by 2.84 percent to settle at 39,323.62 points, while the market capitalization decreased by N416 billion to finish at N14.244 trillion against its previous close of N14.660 trillion.

During the week also, a total of 14 equities appreciated in price, lower than 20 in the previous week, while 61 stocks depreciated in price, higher than 54 equities of the previous week, and 94 counters remained unchanged, lower than 95 recorded in the preceding week.

A total turnover of 1.372 billion shares worth N16.022 billion in 21,099  deals were traded last week by investors on the floor of the exchange in contrast to a total of 1.457 billion shares valued at N23.666 billion that exchanged hands the previous week in 19,674 deals.

It was further observed that the Financial Services Industry, measured by volume, led the activity chart with 1.010 billion shares valued at N8.670 billion traded in 12,049 deals; thus contributing 73.62 percent and 54.11 percent to the total equity turnover volume and value respectively.

The Services Industry followed with 107.246 million shares worth N229.715 million in 712 deals, while the third place was occupied by Consumer Goods Industry with a turnover of 71.946 million shares worth N5.506 billion in 3,818 deals.

Trading in the top three equities; Zenith Bank, African Alliance Insurance Company and Ikeja Hotel, measured by volume, accounted for 276.876 million shares worth N2.939 billion in 2,112 deals, contributing 20.18 percent and 18.35 percent to the total equity turnover volume and value respectively.

The top gainer for the week was Ikeja Hotels, which rose by 44.94 percent to settle at N2.58k per share.

It was followed by MRS Oil Nigeria, which appreciated by 21.18 percent to finish at N36.05k per share, and Law Union and Rock Insurance, which increased by 20.99 percent to close at 98k per share.

Niger Insurance grew by 19.05 percent to end at 25k per share, while Consolidated Hallmark Insurance increased by 11.11 percent to finish at 30k per share.

On the flip side, Eterna closed the week as the worst performing stock after shedding 22.27 percent of its value to close at N5.27k per share.

It was trailed by Japaul Oil, which went down by 20 percent to end at 24k per share, and Dangote Flour, which decreased by 16.82 percent to close at N8.90k per share.

Transcorp declined by 16.35 percent to close at N1.33k per share, while AIICO Insurance fell by 16.18 percent to end at 57k per share.

Also traded during the week were a total of 70 units of Exchange Traded Products (ETPs) valued at N1,943.00 executed in 7 deals, compared with a total of 153,246 units valued at N4.009 million that was transacted in the preceding week in 22 deals.

In addition, a total of 10,754 units of Federal Government bonds valued at N11.412 million were traded during the week in 5 deals, compared with a total of 7,508 units valued at N7.506 million transacted in the previous week in 12 deals.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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Economy

Nigeria Led Africa’s Upstream Oil, Gas Investments in 2024

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OPEC Global Oil Demand

By Adedapo Adesanya

Nigeria ranked as Africa’s leading destination for upstream oil and gas investment in 2024, new research from market intelligence firm, Wood Mackenzie, has shown, accounting for three out of four Final Investment Decisions (FIDs) announced by global oil and gas majors, totaling $13.5 billion.

The FIDs announced within the Nigerian market included Shell’s $122 million investment in the Iseni Gas Project, TotalEnergies’ $566 million commitment to the Ubeta Gas Project and Shell’s approval of the Bonga North Tranche 1 project valued at around $5 billion.

According to the Special Adviser to President Bola Tinubu on Energy, Ms Olu Verheijen, these investments reflected Nigeria’s ongoing efforts to unlock its hydrocarbon potential through investor-friendly policies and strategic global partnerships.

Last year, Nigeria introduced several initiatives to create a conducive environment for oil and gas investors, including new tax incentives aimed at attracting up to $10 billion in natural gas investments.

Nigeria, which is Africa’s largest oil producer, also offered tax relief for gas investors, reducing corporate income tax and extending capital allowance benefits – for deepwater gas projects.

Other policies include the Presidential Directive on Local Content Compliance Requirements 2024 to address the reduction in oil and gas investments caused by high operating costs compared to global markets.

Also, the Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines 2024 reduces the time spent to award contracts for oil and gas projects.

In addition to the directives, Nigeria also launched its 2024 oil and gas licensing round, offering 19 blocks for exploration, demonstrating its commitment to continued collaboration with local, regional and international partners.

Market analysts note that with this momentum, further FIDs are anticipated, including TotalEnergies’ expected $750 million commitment to the Ima Shallow Gas Project in 2025.

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Economy

UBN Property Triggers 0.22% Loss at NASD OTC Exchange

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UBN Property

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.22 per cent decline on Monday, January 20, with the market capitalisation shedding N2.35 billion to close at N1.073 trillion compared with the preceding session’s N1.075 trillion and the NASD Unlisted Security Index (NSI) going down by 6.79 points to wrap the session at 3,105.12 points compared with 3,111.91 points recorded in the previous session.

It was observed that the loss recorded on the first trading day of the week was triggered by UBN Property Plc, which crashed by 20 Kobo to trade at N2.00 per share versus last Friday’s N2.20 per share.

However, the share price of Industrial and General Insurance (IGI) Plc went up by 4 Kobo to 40 Kobo per unit from 36 Kobo per unit, it could not stop the bourse from going down at the close of transactions.

The activity chart showed that on Monday, the volume of securities traded by investors increased by 57.9 per cent to 767,610 units from the 486,215 units traded in the preceding session, while the value of shares traded yesterday slumped by 17.7 per cent to N2.3 million from the N2.8 million recorded in the preceding trading day, as the number of deals declined by 14.3 per cent to 12 deals from the 14 deals carried out in the previous trading day.

At the close of transactions, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value on a year-to-date basis with the sale of 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with a turnover of 9.1 million units valued at N44.0 million, and 11 Plc with the sale of 55,358 for N14.5 million.

Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume on a year-to-date basis with 25.3 million units sold for N5.9 million, Geo-Fluids Plc came next with 9.1 million units valued at N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units worth N162.9 million.

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Economy

Naira Weakens to N1,550/$1 at Official Market, Gains N5 at Black Market

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Naira 4 Dollar

By Adedapo Adesanya

The value of the Naira weakened against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 20 amid FX pressures associated with this period.

Most people who came into the country for Christmas and New Year holidays are already going back and are in need of forex, putting pressure on the local currency.

Also, the poor performance of the domestic currency could be attributed to end to the 42-day access granted by the Central Bank of Nigeria (CBN) to Bureaux de Change (BDC) operators to buy forex at official price.

According to data from the FMDQ Securities Exchange, the Nigerian Naira lost 0.16 per cent or N2.47 on the greeback yesterday to sell at N1,550.05/$1, in contrast to last Friday’s rate of N1,547.58/$1.

Similarly, the Naira slumped against the Pound Sterling in the spot market on Monday by N23.39 to trade at N1,906.98/£1 versus N1,883.59/£1 and depreciated against the Euro by N23.14 to sell for N1,613.48/€1 compared with last Friday’s N1,590.34/€1.

However, in the parallel market, the Nigerian currency improved its value against the Dollar during the session by N5 to quote at N1,665/$1 compared with the previous session’s N1,670/$1.

As for the cryptocurrency market, it turned red yesterday as the US President, Mr Donald Trump, didn’t bring up the much-expected subject of crypto in his inauguration speech on Monday afternoon.

Mr Trump had promised a far more friendly crypto policy stance than the previous administration but in the long speech that announced his plans in the coming days, he didn’t make mention of Bitcoin or crypto.

Just over the weekend, the President ignited a speculative frenzy with the Friday evening launch of the Trump meme coin, which was shortly followed by a meme coin associated with his wife, Melania.

Dogecoin (DOGE) crumbled yesterday by 6.3 per cent to $0.3419, Solana (SOL) slumped by 4.7 per cent to $235.32, Cardano (ADA) fell by 3.6 per cent to $0.9777, and Litecoin (LTC) moderated by 1.9 per cent to $114.98.

Further, Ethereum (ETH) went down by 1.7 per cent to $3,241.36, Binance Coin (BNB) retreated by 1.4  per cent to $693.30, Ripple (XRP) depreciated by 1.2 per cent to $3.06, and Bitcoin (BTC) tumbled by 0.8 per cent to $101,746.99, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

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