Economy
Trump, Earnings in Focus as Wall Street Heads for Sluggish Start
By Modupe Gbadeyanka
Stocks look poised for a lacklustre start to trading on Tuesday. Investors are contemplating a new batch of earnings reports, including results from Yahoo! (YHOO) and Johnson & Johnson (JNJ).
Washington DC will continue to get some attention as well. Stocks fell Monday amid renewed concerns about protectionist policies under new President Donald Trump.
Meanwhile, some fresh data on the housing market is due out later this morning.
Wall Street is still trying to predict how economic policy will go under the new Trump Administration. On Monday, the president told a meeting of corporate executives he plans to impose a major border tax, although he also promised a massive tax cut for the middle class and companies.
The president also signed an executive order to renegotiate NAFTA and is expected to sign an order indicating his intention to withdraw from the Trans-Pacific Partnership.
Amid worries about protectionism, the S&P 500 fell on Monday, dipping 5 points, or 0.3%, to close at 2,265. The Dow Jones Industrial Average shed 26 points, or 0.1%, to end at 19,800. The Nasdaq Composite Index edged down 2 points to close at 5,552.
Stocks in Focus
Earnings news will dominate the corporate headlines for the next several weeks. On Tuesday, Yahoo! and Johnson & Johnson were among the biggest names likely to impact trading.
Yahoo reported a profit for the fourth quarter that trumped Wall Street estimates. The company also said it expects a delay in completion of the deal with Verizon Communications Inc.
On an adjusted basis, earnings rose to $0.25 per share from $0.13 per share last year. Analysts polled by Thomson Reuters estimated earnings of $0.21 per share.
Yahoo said now expects to close the sale of its core internet business to Verizon in the second quarter instead of the first quarter as earlier expected. The company cited “given work required to meet closing conditions” as the reason for the delay.
Johnson & Johnson reported solid fourth-quarter results, with adjusted earnings above market estimates. However, sales missed expectations, despite growth from last year.
The company also provided guidance for fiscal 2017. It said it expects higher earnings and sales for the year, but its forecast was below current market estimates.
Europe markets
European stocks held steady Tuesday after three days of losses. As in Asia, a weaker dollar boosted resource stocks. Meanwhile, investors waited for the U.K.’s Supreme Court decision on whether Prime Minister Theresa May needs parliamentary approval to trigger formal Brexit talks.
However, stocks pared early gains to turn flat after Markit’s flash composite PMI figures showed Eurozone business activity eased slightly in January.
The UK and Germany were each up about 0.2% in mid-day trading. France was showing a fractional loss.
Asia markets
Asian stocks closed mostly higher on Tuesday amid higher commodity prices, which were helped by a weaker dollar. Equity markets in the region also benefited from upbeat earnings results from Samsung Electronics.
Chinese shares closed off their day’s highs in thin trading as investors moved to the sidelines ahead of holidays. The Shanghai Composite rose 5.78 points, or 0.18%, to 3,142.55.
Japanese shares extended losses from the previous session, hit by a firmer yen. The Nikkei average dropped 103.04 points, or 0.55%, to 18,787.99.
Currency and Commodities Markets
Gold futures were lower Tuesday morning, trimming strong gains from the previous session.
A murky rate hike outlook and concerns about U.S. trade relations drove gold to the highest in ten weeks Monday, but traders are waiting on a slew of second-tier economic data this morning.
March gold was down $2.30 at $1216 an ounce.
Crude oil futures were little changed Tuesday as traders await further clues about the pace of U.S. production.
The American Petroleum Institute reports weekly inventories this afternoon, followed tomorrow by the Energy Information Administration.
The EIA last week reported a large build in U.S. stockpiles. WTI light sweet crude oil was up 10 cents at $52.85 a barrel.
Investors Hub
By Modupe Gbadeyanka
The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.
The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.
At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.
According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.
It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.
The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.
The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.
As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.
From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.
Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.
In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.
Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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