Economy
Oil Prices Fall Ahead of Crucial OPEC+ Meeting
By Adedapo Adesanya
Oil prices plunged on Monday ahead of a key meeting of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) scheduled for this week.
Members of the oil cartel are expected to meet in a few days to discuss happenings at the global market and it is believed that they would support the return of more supply to the fast-tightening market.
In recent times, the price of the commodity had risen but yesterday, the Brent crude futures lost $1.04 or 1.61 per cent to trade at $63.38 per barrel, while the West Texas Intermediate (WTI) crude futures dropped by 86 cents or 1.4 per cent to sell at $60.64 per barrel.
When OPEC+ meets, it must decide how much output gets restored and at what pace with current reductions amounting to just over 7 million barrels a day, or 7 per cent of global supply.
The 23-nation coalition will choose whether to revive a 500,000-barrel tranche in April, and in addition, whether Saudi Arabia will confirm if the extra 1 million barrels it voluntarily took off in February and March will return.
Market analysts believe that now that oil is back at $60, there’s going to be a push to ease the cuts but they noted that the question is how much are they going to bring back.
They also added that the biggest risk is if supply presumptions think things are back to pre-pandemic demand in 2021 and that turns out not to be the case.
The alliance gathers on Thursday and is expected to ease the output restrictions after prices got off to their best-ever start to a year.
Business Post observed yesterday, even news that the US House of Representatives recently passed President Joe Biden’s proposed $1.9 trillion COVID relief package couldn’t help the market hold well in the positive territory after lifting sentiment.
The progress in the stimulus package approval after weeks of debates will now need Senate approval. If approved by the Senate, the stimulus package would pay for vaccines and medical supplies, and send a new round of emergency financial aid to households and small businesses, which will have a direct impact on energy demand.
The market also went down over data showing that Chinese oil crude consumption is slowing. China’s factory activity growth slipped to a nine-month low in February, sounding alarms over Chinese crude buying and pressuring oil prices.
Surprisingly, good economic data came out of Germany, where manufacturing saw strong growth in February, thanks to exports. Despite the lockdown in Europe’s biggest economy, German activity hit its highest level in more than three years.
By Adedapo Adesanya
The Central Securities Clearing System (CSCS) Plc again pulled down the NASD Over-the-Counter (OTC) Securities Exchange on Thursday, August 20, by 1.11 per cent.
The securities depository company further lost N5.93 during the trading session to close at N82.20 per share versus the midweek closing price of N88.12 per share.
As a result, the NASD Security Index (NSI) slid by 48.25 points to 4,284.84 points from 4,333.09 points, and trimmed the bourse’s market capitalisation by N28.96 billion to N2.571 trillion from N2.60 trillion.
During the trading day, the price of Afriland Properties Plc went up by 50 Kobo to N20.50 per unit from N20.00 per unit.
Yesterday, the volume of securities transacted by investors slumped by 85.1 per cent to 112,218 units from 747,429 units, the value of securities fell by 95.2 per cent to 4.6 million from 9.4 million, and the number of deals decreased by 40.5 per cent to 25 deals from 42 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units exchanged for N6.5 billion, and CSCS Plc with 79.9 million units worth N5.8 billion.
GNI Plc also finished the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units transacted for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
By Adedapo Adesanya
The Naira improved its value against the United States Dollar by N2.78 or 0.21 per cent to N1,347.63/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, August 20, from the previous day’s N1,350.41/$1.
Also, the domestic currency gained 43 Kobo against the Pound Sterling in the official market yesterday to trade at N1,838.70/£1 compared with the preceding session’s N1,839.13/£1, but lost 66 Kobo against the Euro to finish at N1,574.97/€1, in contrast to Wednesday’s N1,574.31/€1.
At the GTBank forex counter, the Naira depreciated against the US Dollar yesterday by N1 to close at N1,358/$1 versus the previous session’s N1,357/$1, while at the parallel market, it remained unchanged at N1,390/$1.
Daily FX update released by the Central Bank of Nigeria (CBN) showed that interbank turnover at the official window increased by 0.22 per cent to $371.788 million from $370.98 million, with the number of deals up to 134 from 100.
Transactions were consummated between N1,347 and N1,351.5000 during the trading session.
As for the cryptocurrency market, Bitcoin (BTC) topped $75,000 in the latest rally amid euphoria over a US Treasury liquidity signal from the buyback plan, rising by 8.8 per cent to $75,371.36.
The US Treasury Department has decided to at least double liquidity-support buyback operations for longer-dated nominal coupon securities. This applies in the 10- to 30-year segment.
Additional catalysts included the latest crypto proposal by the US Securities and Exchange Commission (SEC), while President Donald Trump, after meeting with prominent crypto executives, urged Congress to pass what he calls a fair version of the Clarity Act before year-end.
Further, Ripple (XRP) rose by 18.7 per cent to $1.30, Cardano (ADA) grew by 13.9 per cent to $0.2086, Dogecoin (DOGE) improved by 10.8 per cent to $0.0826, Solana (SOL) expanded by 6.5 per cent to $90.37, Binance Coin (BNB) soared by 6.3 per cent to $664.00, Ethereum (ETH) jumped by 5.2 per cent to $2,363.26, and TRON (TRX) climbed by 1.5 per cent to $0.3379, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
By Dipo Olowookere
For the eighth straight session, the Nigerian Exchange (NGX) closed lower, losing 0.32 per cent at the close of business on Thursday as a result of continued sell-offs.
Yesterday, the financial and energy sectors came under selling pressure as investors’ appetite for domestic equities waned, with attention turning to the 2027 presidential campaigns, which kicked off on Wednesday.
The energy index shed 2.49 per cent, the insurance sector depreciated by 0.79 per cent, and the banking segment declined by 0.41 per cent. But the consumer goods space gained 0.10 per cent, while the industrial goods counter closed flat.
When the market closed for the day, the All-Share Index (ASI) contracted by 712.67 points to 240,037.80 points from 240,750.47 points, and the market capitalisation decreased by N439 billion to N154.978 trillion from N155.417 trillion.
International Energy Insurance slumped by 9.85 per cent to N4.30, Coronation Insurance dropped 9.84 per cent to trade at N2.20, Fortis Global slipped by 9.76 per cent to N1.85, AVA Capital crashed by 7.89 per cent to N7.00, and Zichis shrank by 7.36 per cent to N17.00.
On the other side, Haldane McCall rose by 9.38 per cent to N3.85, Trans-Nationwide Express jumped by 8.90 per cent to N3.06, McNichols appreciated by 8.33 per cent to N5.20, Cutix gained 2.56 per cent to close at N2.40, and Veritas Kapital expanded by 1.52 per cent to N1.34.
Business Post reports that Customs Street recorded 14 advancing stocks and 29 declining stocks, representing a negative market breadth index and weak investor sentiment.
A total of 2.9 billion shares worth N34.0 billion were transacted in 34,725 deals during the session versus the 1.2 billion shares valued at N37.8 billion traded in 34,546 deals at midweek. This showed that the trading value moderated by 10.05 per cent, while the trading volume and number of deals increased by 141.67 per cent and 0.59 per cent apiece.
Fortis Global Insurance was on top of the activity chart yesterday, with a turnover of 2.6 billion equities valued at N5.2 billion. Sterling Holdings exchanged 28.1 million shares worth N211.4 million, Trans-Nationwide Express transacted 21.7 million stocks for N66.2 million, UBA sold 17.9 million equities worth N803.7 million, and First Holdco traded 15.7 million shares valued at N2.0 billion.
