Economy
Oil Weakens Further on Chinese Economic Woes
By Adedapo Adesanya
Oil depreciated on Tuesday, the third straight day of losses, on worries of a slowing Chinese economy, pressuring demand, with Brent down by $1.12 or 1.3 per cent to $83.73 a barrel and the US West Texas Intermediate (WTI) down by $1.15 or 1.4 per cent to $80.76 per barrel.
Weaker economic data continues to flow from China as more government support programmes have been disappointing, with many of China’s refineries cutting back on weaker fuel demand.
Data shows that the world’s second-largest economy grew 4.7 per cent in April-June, its slowest rate since the first quarter of 2023 compared to the previous quarter’s 5.3 per cent expansion, triggered by a long property downturn and job insecurity.
This happened even though declines in benchmarked prices were stemmed by a growing consensus the US Federal Reserve could begin cutting its key interest rate as soon as September.
The US Federal Reserve Chairman, Mr Jerome Powell, said on Monday the three US inflation readings over the second quarter of this year “add somewhat to confidence” that the pace of price increases is returning to the central bank’s target sustainably.
Federal Reserve Governor Adriana Kugler said it would be appropriate to begin easing monetary policy later this year if economic conditions continue to evolve favourably.
Market participants interpreted this as indicating that a turn to interest rate cuts may not be far off. Lower interest rates decrease the cost of borrowing, which can boost economic activity and oil demand.
Analysts cautioned that being overly bullish as expected weakness in some macroeconomic data from the US could still indirectly hurt oil demand in the near term.
Meanwhile, the global economy is poised for moderate growth over the next two years with decreasing activity in the US, a bottoming out in Europe, and greater consumption and exports in China but dangers to the route abound, the International Monetary Fund (IMF) said on Tuesday.
Crude oil inventories in the US fell sharply this week by 4.44 million barrels for the week ending July 12, according to the American Petroleum Institute (API).
For the week prior, the API reported a 1.9 million barrel draw in crude inventories.
This week marks the third week in a row of API-estimated inventory draws for crude oil, for a total loss of 15.5 million barrels.
Official data from the US Energy Information Administration (EIA) will be released on Wednesday.
By Adedapo Adesanya
Four price decliners further weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.46 per cent on Thursday, July 2.
FrieslandCampina Wamco Nigeria Plc went down by N5.55 to N146.46 per unit from N152.01 per unit, Nitrox Industrial Gases Plc fell by N1.10 to N20.30 per share from N21.40 per share, UBN Property Plc lost 11 Kobo to sell at N1.99 per unit versus the previous day’s N2.10 per unit, and Mass Telecoms Innovation Plc depreciated by 4 Kobo to 32 Kobo per share from 36 Kobo per share.
Consequently, the NASD Unlisted Security Index (NSI) dropped 19.74 points to close at 4,248.46 points compared with Wednesday’s closing value of 4,268.20 points, while the market capitalisation decreased by N11.85 billion to N2.549 trillion from N2.561 trillion.
Yesterday, the volume of transactions went up by 92.9 per cent to 440,653 units from 229,238 units, and the number of deals rose by 77.8 per cent to 32 deals from 18 deals, while the value of trades contracted by 51.4 per cent to N10.5 million from N21.5 million.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units traded for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 68.9 million units exchanged for N4.8 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
By Dipo Olowookere
The selling pressure on the Nigerian Exchange (NGX) Limited persisted on Thursday, causing a further decline of 0.61 per cent.
Data from Customs Street showed that the insurance counter lost 2.46 per cent, the banking space declined by 2.15 per cent, the industrial goods sector crumbled by 1.00 per cent, the energy index fell by 0.23 per cent, and the consumer goods segment crashed by 0.08 per cent.
As a result, the All-Share Index (ASI) retreated by 1,368.10 points to 224,321.97 points from 225,690.07 points, and the market capitalisation moderated by N878 billion to N143.947 trillion from N144.825 trillion.
Trading data indicated investors bought and sold 855.4 million shares for N28.4 billion in 51,609 deals versus the 488.1 million shares worth N14.0 billion traded in 46,929 deals on Wednesday, showing a spike in the trading volume, value, and number of deals by 75.25 per cent, 102.86 per cent, and 9.97 per cent, respectively.
The busiest stock for the session was Sterling Holdings, with a turnover of 459.6 million units worth N3.7 billion, Zenith Bank exchanged 41.2 million units for N4.2 billion, Universal Insurance sold 30.2 million units valued at N25.2 million, Access Holdings traded 29.7 million units worth N654.9 million, and FCMB transacted 28.2 million units valued at N271.4 million.
Yesterday, 13 equities gained weight, while 34 equities shed weight, indicating a negative market breadth index and weak investor sentiment.
Guinea Insurance lost 10.00 per cent to trade at 90 Kobo, International Energy Insurance slipped by 9.84 per cent to N5.22, The Initiates dropped 9.79 per cent to close at N23.50, Tantalizers declined by 9.52 per cent to N3.61, and NEM Insurance crashed by 9.25 per cent to N28.12.
On the flip side, Austin Laz gained 10.00 per cent to close at N3.63, Learn Africa also improved by 10.00 per cent to N9.90, DAAR Communications appreciated by 9.49 per cent to N1.50, UPDC soared by 9.09 per cent to N3.60, and Caverton flew higher by 8.51 per cent to N5.10.
By Adedapo Adesanya
The Naira continued to gain ground against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX), as it further chalked up N2.26 or 0.16 per cent to sell for N1,370.15/$1 on Thursday, July 2, in contrast to Wednesday’s rate of N1,372.41/$1.
However, this was not the case for the domestic currency against the Pound Sterling at the same market window, the official market. It lost N10.44 to close at N1,832.17/£1 versus the previous day’s N1,821.73/£1, and fell against the Euro by N2.91 to trade at N1,568.28/€1 compared with the N1,565.37/€1 it was traded at midweek.
But at the black market, the Nigerian Naira gained N5 against the US Dollar yesterday to quote at N1,390/$1 versus the preceding session’s N1,395/$1, and at the GTBank FX counter, it appreciated by N7 to settle at N1,382/$1 versus N1,389/$1.
There are expectations that the Naira will remain within range as pressure from people taking half-year profits has tapered down while continued stronger policy signals from the Central Bank of Nigeria (CBN) back the market.
Data from the apex bank showed that interbank FX turnover declined to $85.517 million across 94 deals closed by financial institutions trading on behalf of their clients from $90.303 million the previous day.
The last two trading sessions have seen a sharp decline in interbank FX turnover, down from an intra-week high of $269.898 million, according to data obtained from the CBN.
Despite a sharp slowdown in CBN FX intervention, the broader expectation remains that the Naira will trade within a relatively stable range through the remainder of 2026.
As for the cryptocurrency market, a squeeze on bearish traders pushed Bitcoin (BTC) toward $62,000, capping the market’s first genuinely strong week since mid June. It improved its value by 1.8 per cent to $61,644.94.
Data from Coinglass showed that traders betting against crypto lost $281 million to liquidations over the past 24 hours, against $159 million in longs, out of $440 million in total forced closures across 95,690 traders.
Cardano (ADA) rose by 6.6 per cent to $0.1651, Ethereum (ETH) soared by 5.5 per cent to $1,716.65, Ripple (XRP) appreciated by 4.2 per cent to $1.10, Dogecoin (DOGE) grew by 3.3 per cent to $0.0751, Solana (SOL) also chalked up 3.3 per cent to sell at $80.95, Binance Coin (BNB) added 2.0 per cent to close at $562.22, and TRON (TRX) jumped by 1.0 per cent to $0.3186, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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