Economy
US Shares Open Higher on Rally by Chinese Stocks
By Investors Hub
The major U.S. index futures are pointing to a higher open on Monday, with stocks likely to move to the upside following the mixed performance seen last week.
The upward momentum on Wall Street comes on the heels of a rally by Chinese stocks, which extended the substantial rebound seen last Friday.
Chinese stocks surged higher amid optimism about additional stimulus to stimulate the world?s second largest economy after last week?s disappointing GDP data.
After three top Chinese financial regulators stepped in to bolster investor confidence last Friday, Chinese President Xi Jinping vowed ?unwavering? support for the country’s private sector.
In an open letter published in state media, Xi said Beijing would continue to value and protect the country’s private business owners to ensure a ?better tomorrow.?
Overall trading activity may be somewhat subdued, however, as a lack of major U.S. economic data may keep some traders on the sidelines.
After failing to sustain an early move to the upside, stocks turned mixed over the course of the trading session on Friday. The major averages pulled back well off their highs of the session, with the Nasdaq and the S&P 500 ending the day in negative territory.
While the Dow rose 64.89 points or 0.3 percent to 25,444.34, the Nasdaq fell 36.11 points or 0.5 percent to 7,449.03 and the S&P 500 edged down 1.00 points or less than a tenth of a percent to 2.767.78.
The major averages also turned in a mixed performance for the week. The Nasdaq fell by 0.6 percent, while the Dow rose by 0.4 percent and the S&P 500 was nearly flat.
Early buying interest was generated by a rally by Chinese stocks, which rebounded strongly from an initial move to the downside despite disappointing GDP data.
Data showed Chinese GDP climbed an annual 6.5 percent in the third quarter, shy of estimates for 6.6 percent and down from 6.7 percent in the previous quarter.
However, investors reacted positively after three top Chinese financial regulators stepped in to bolster investor confidence.
The heads of the People’s Bank of China, the Securities Regulatory Commission and the Banking and Insurance Regulatory Commission all issued statements expressing support for the markets.
A positive reaction to upbeat earnings news from big-name companies such as Procter & Gamble (PG), American Express (AXP) and Honeywell (HON) also contributed to the early strength on Wall Street.
Traders seemed reluctant to make more significant moves, however, as concerns about rising interest rates and tension between the U.S. and Saudi Arabia continued to weigh on the markets.
Meanwhile, traders largely shrugged off a report from the National Association of Realtors showing a much steeper than expected drop in existing home sales in the month of September.
NAR said existing home sales plunged by 3.4 percent to an annual rate of 5.15 million in September after edging down by 0.2 percent to a revised rate of 5.33 million in August. Economists had expected existing home sales to drop by 0.7 percent.
With the much bigger than expected decrease, existing home sales slumped to their lowest annual rate since November of 2015.
Utilities stocks showed a significant move to the upside on the day, driving the Dow Jones Utilities Average up by 1.6 percent. With the gain, the average reached its best closing level in ten months.
Notable strength was also visible among telecom stocks, as reflected by the 2.2 percent advance by the NYSE Arca North American Telecom Index. The index rebounded following the pullback seen in the previous session, climbing further off the two-month closing low set last Thursday.
On the other hand, biotechnology stocks came under pressure over the course of the session, dragging the NYSE Arca Biotechnology Index down by 1.8 percent.
Oil stocks also moved to the downside despite an increase by the price of crude oil, moving notably lower along with housing, semiconductor, and networking stocks.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed higher by 1.41 per cent on Friday, May 15, supported by four securities on the platform.
During the session, FrieslandCampina Wamco Plc added N14.24 to its share price to sell for N159.00 per unit, in contrast to the previous day’s N144.76 per unit.
Further, Central Securities and Clearing System (CSCS) Plc appreciated by N1.34 to N72.34 per share from N71.00 per share, Geo-Fluids Plc improved its price by 4 Kobo to N2.94 per unit from N2.90 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to trade at 61 Kobo per share compared with Thursday’s closing price of 60 Kobo per share.
As a result, the NASD Unlisted Security Index (NSI) rose by 58.20 points to 4,188.41 points from 4,130.21 points, and the market capitalisation soared by N34.82 billion to N2.506 trillion from N2.471 trillion on Thursday.
During the session, the volume of trades went up by 180.8 per cent to 1.2 million units from 417,349 units, and the value of transactions increased by 29.8 per cent to N29.8 million from N23.2 million, while the number of deals fell by 22.6 per cent to 24 deals from 31 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 60.8 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.9 million units valued at N1.9 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 Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
By Dipo Olowookere
The bears overpowered the Nigerian Exchange (NGX) Limited on Friday, sinking it further by 0.76 per cent when the closing gong was struck by 4 pm.
The nation’s flagship equity market was under selling pressure during the session, as investors booked profits after the shares witnessed price appreciation in the past trading sessions.
The energy sector was the most impacted, as it shed 4.43 per cent. The consumer goods index declined by 0.90 per cent, the banking counter decreased by 0.15 per cent, and the industrial goods sector lost 0.08 per cent, while the insurance counter gained 2.42 per cent, which was not enough to salvage the situation.
Consequently, the All-Share Index (ASI) contracted by 1,912.19 points to 250,330.92 points from 252,243.11 points, and the market capitalisation moderated by 1.225 trillion to N160.444 trillion from N161.669 trillion.
Zichis was the worst-performing stock for the session after it gave up 9.97 per cent to close at N29.43, FTN Cocoa slipped by 9.95 per cent to N8.96, The Initiates slumped by 9.90 per cent to N32.30, LivingTrust Mortgage Bank tumbled by 9.88 per cent to N3.83, and International Energy Insurance dropped 9.71 per cent to trade at N2.79.
The best-performing stock was ABC Transport, which grew by 10.00 per cent to N6.27. May and Baker also appreciated by 10.00 per cent to N47.30, SCOA Nigeria surged by 9.98 per cent to N33.05, Trans-Nationwide Express expanded by 9.97 per cent to N7.06, and DAAR Communications jumped 9.76 per cent to N2.25.
Yesterday, investors traded 1.1 billion shares worth N44.3 billion in 65,744 deals compared with the 1.0 billion shares valued at N41.6 billion transacted in 74,822 deals a day earlier. This indicated a dip in the number of deals by 12.13 per cent, and a rise in the trading volume and value by 10.00 per cent and 6.49 per cent, respectively.
Chams was the busiest equity for the day, with 328.5 million units sold for N1.1 billion. UBA traded 61.6 million units worth N2.7 billion, First Holdco transacted 58.7 million units valued at N4.2 billion, Secure Electronic Technology exchanged 51.9 million units worth N45.0 million, and Access Holdings traded 51.8 million units valued at N1.3 billion.
By Adedapo Adesanya
The last trading session of the week at the Nigerian Autonomous Foreign Exchange Market (NAFEX) ended on a negative note for the Naira on Friday, May 15, as it lost N15 Kobo or 0.1 per cent against the Dollar to trade at N1,371.04/$1 compared with the previous day’s N1,370.89/$1.
However, it further appreciated against the Pound Sterling in the same market segment yesterday by N20.77 to close at N1,830.61/£1 versus Thursday’s value of N1,851.38/£1, and gained N7.91 against the Euro to settle at N1,595.07/€1 versus N1,602.98/€1.
At the GTBank FX desk, the Naira lost N2 against the US Dollar during the session to sell at N1,383/$1 compared with the preceding session’s N1,381/$1, and at the black market, it remained unchanged at N1,385/$1.
The Naira is forecast to be broadly stable, supported by Dollar sales by the Central Bank of Nigeria (CBN) amid steady, higher oil receipts, with the market settling into a balance.
Policy direction is also expected to give the market some boost as the CBN said the new edition of the FX market guidelines will deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
According to the Governor of the CBN, Mr Yemi Cardoso, the update is due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework. According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Meanwhile, the cryptocurrency market plunged into the red zone as rising bond yields hit risk assets across markets, while traders are increasingly betting the Federal Reserve may need to raise rates again. Rising energy prices and resurging inflation could force central banks back into tightening mode.
Cardano (ADA) shrank by 4.4 per cent to $0.2557, Dogecoin (DOGE) slid by 3.7 per cent to $0.1104, Ripple (XRP) depreciated by 3.5 per cent to $1.41, Solana (SOL) crashed by 3.5 per cent to $87.81, and Binance Coin (BNB) slumped by 3.4 per cent to $659.64.
Further, Bitcoin (BTC) declined by 2.6 per cent to $78,547.49, Ethereum (ETH) lost 2.1 per cent to quote at $2,209.19, and TRON (TRX) tumbled by 0.7 per cent to $0.3509, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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