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Economy

Stocks May Benefit From More Upbeat Earnings News

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US Stocks report

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Thursday following the mixed performance seen in the previous session.

Another positive reaction to the latest batch of earnings news may contribute to early buying interest on Wall Street.

After failing to sustain an early upward move stocks turned mixed over the course of the trading session on Wednesday. While the Nasdaq and the S&P 500 pulled back into negative territory, the Dow reached a new record closing high.

The major averages ended the day on opposite sides of the unchanged line. The Dow rose 41.31 points or 0.2 percent to 26,252.12, while the Nasdaq slid 45.23 points or 0.6 percent to 7,415.06 and the S&P 500 edged down 1.59 points or 0.1 percent to 2,837.54.

The early strength on Wall Street partly reflected a positive reaction to the latest batch of quarterly earnings news.

Abbott Laboratories (ABT), United Technologies (UTX), and Comcast (CMCSA) are among the companies that reported better than expected quarterly results.

Buying interest waned over the course of the morning, however, leading some traders to cash in on the recent strength in the markets.

On the U.S. economic front, the National Association of Realtors released a report showing a bigger than expected pullback in existing home sales in the month of December.

NAR said existing home sales tumbled by 3.6 percent to an annual rate of 5.57 million in December after jumping by 5.1 percent to a revised 5.78 million in November.

Economists had expected existing home sales to drop to a rate of 5.70 million from the 5.81 million originally reported for the previous month.

The bigger than expected decrease came after existing home sales jumped to highest rate in nearly eleven years in November.

“Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” said NAR chief economist Lawrence Yun.

Airline stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 3 percent.

United Continental (UAL) led the airline sector lower after reporting fourth quarter results that beat estimates but also announcing an increase in capacity that could impact profit margins.

Significant weakness also emerged among semiconductor stocks, as reflected by the 2.3 percent drop by the Philadelphia Semiconductor Index. The index pulled back off the record closing high set in the previous session.

Chip maker Texas Instruments (TXN) posted a notable loss despite reporting fourth quarter results that matched analyst estimates.

Oil service and electronic storage stocks also moved to the downside on the day, while considerable strength was visible among gold, steel, and banking stocks.

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

Wale Edun Rules Out IMF Loan for Nigeria

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Wale Edun Monetary Policies

By Adedapo Adesanya

The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has said Nigeria may not run to the International Monetary Fund (IMF) for any loan.

He disclosed this in a chat with Arise Television on the sidelines of the ongoing World Economic Forum (WEF) in Davos, Switzerland.

The Minister affirmed that Nigeria has no reason to approach the global lender, adding that the nation is currently relying on relatively cheaper borrowing sources from the World Bank and the African Development Bank (AfDB).

He also argued that Nigeria does not have a balance of payments problem and therefore will not need the short-term financing intervention by the Bretton Wood institution.

“I can imagine the headlines if you saw a situation whereby you were saying Nigeria approaches the IMF for funding. But the reality is that, of course, as a developing country, requiring investment, funds for the government, and investment in key infrastructure to improve the enabling environment for business, we do need funds, and we have the need to borrow.

“We have relied on relatively cheap funding from the multilateral, from the World Bank, from AFDB, and the whole spectrum of funding has been used.”

He also said that the country will tap a range of instruments to help finance this year’s budget deficit and improve the economy.

“We have relied on Nigerian savings by convincing them of the macroeconomic plan of the president, and what it holds in terms of the prospects for growth of the economy and business, and improvement of the business environment.

“Of course, we have approached the Euro bond market, which is, of course, the commercial end of financing. So we’ve done that whole spectrum. When it comes to IMF financing, typically financing from the IMF is to help with short-term balance of payments issues and crises.

“In the case of Nigeria, we have a positive trade balance. We have a positive current account balance. Our reserves are growing. The Governor of the Central Bank recently announced that we had achieved upwards of $10 billion improvement and increase in the reserves.

“We need to use equity. We need to rely on crowding in the savings, particularly of the private sector in Nigeria and the private sector around the world in the form of foreign direct investment. We have to remember that at this time, we have had significant gains in terms of improving the economic environment,” Mr Edun stated.

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Economy

NASD OTC Exchange Rises 0.33%

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NASD OTC securities exchange

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange rose further by 0.33 per cent on Thursday, January 23, as appetite for unlisted stocks continued to grow.

During the trading session, the value of the bourse went up by N7.6 billion to N1.767 trillion from the N1.76 trillion it closed in the preceding session, as the NASD Unlisted Security Index (NSI) made an additional 10.33 points to wrap the trading day at 3,120.3 points compared with the 3,09.80 points recorded at the midweek session.

Business Post reports that the share price of Okitipupa Plc increased on Thursday by N4.35 to end the day at N47.90 per unit compared with the previous day’s N43.55 per unit, and Food Concepts Plc gained 14 Kobo to settle at N1.74 per share, in contrast to the preceding day’s N1.60 per share.

On the flip side, Impresit Bakolori Plc suffered a decline of 10 Kobo yesterday to trade at 95 Kobo per unit versus Wednesday’s closing price of N1.05 per unit.

When the exchange closed for the session, the volume of securities bought and sold by investors went up by 70,008 per cent to 407.4 million units from the 581,160 units transacted a day earlier.

Equally, the value of shares traded during the session jumped by 16,665.9 per cent to N391.2 million from the N2.3 million recorded at midweek, and the number of deals increased by 65 per cent to 30 deals from the 20 deals posted on Wednesday.

Impresit Bakolori Plc topped the activity chart as the most active stock by value (year-to-date) with 406.5 million units worth N386.1 million, followed by FrieslandCampina Wamco Nigeria Plc with 4.3 million units valued at N170.4 million, and Geo-Fluids Plc with 9.1 million units sold for N44.3 million.

However, Impresit Bakolori Plc snatched the top spot as most active stock by volume (year-to-date) with 406.5 million units worth N386.1 million, as Industrial and General Insurance (IGI) Plc dropped to second position for selling 26.3 million units sold for N6.3 million, and Geo-Fluids Plc occupied third with 9.2 million units valued at N44.3 million.

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Economy

Naira Firms to N1,548/$1 at Official Market, Tumbles at Black Market

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Black Market

By Adedapo Adesanya

The Naira recovered about 0.26 per cent or N3.99 against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, January 23 after coming under pressure in recent times.

During the session, the exchange rate of the local currency to its American counterpart closed at N1,548.59/$1 in the official market compared with the previous day’s N1,552.58/$1.

Also, against the Pound Sterling, the domestic currency gained N3.32 yesterday to trade at N1,912.21/£1 compared with Wednesday’s value of N1,915.53/£1 and on the Euro, it improved by N3.82 to sell for N1,617.72/€1 versus N1,613.89/€1.

The forex market may be reacting positively to news that the Central Bank of Nigeria (CBN) would launch a FX Code, which will serve as a guideline to the banking industry to promote ethical conduct of Authorised Dealers in the Nigerian FX market, next week.

The code will further reduce speculative activities, eliminate market distortions, and give the CBN improved oversight capabilities to effectively regulate the market.

The bank noted that authorised dealers would subsequently conduct all FX transactions in the interbank FX market on the EFEMS approved by the apex bank where transactions will be reflected immediately.

However, in the black market segment, the Nigerian Naira lost N5 against the greenback during the session to quote at N1,665/$1, in contrast to midweek’s rate of N1,660/$1.

As for the cryptocurrency market, it was lively yesterday as attention is increasingly centered on potential policy developments under the government of President Donald Trump of the US.

On Thursday, President Trump signed an executive order to ban the digital dollar and promote crypto and AI innovation in the country.

Meanwhile, the US data released recently showed the “all tenant rent” index, which leads the shelter inflation in the Consumer Price Index (CPI), rose at a slower pace last quarter. That has raised hopes that the US Federal Reserve will walk back on its hawkish December rate forecasts.

These helped Ethereum (ETH) gain 5.4 per cent on Thursday to sell at $3,394.79, Solana (SOL) appreciated by 4.4 per cent to $260.86, Cardano (ADA) jumped by 2.9 per cent to $1.00, and Litecoin (LTC) expanded by 2.6 per cent to $116.78.

Further, Bitcoin (BTC) rose by 2.1 per cent to $1o4,978.31, Ripple (XRP) leapt by 0.7 per cent to $3.16, Dogecoin (DOGE) increased by 0.6 per cent to $0.3572, and Binance Coin (BNB) soared by 1.6 per cent to $710.31, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.

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