Economy
US Stocks Open Lower on Threat Of New Tariffs
By investors Hub
The major U.S. index futures are currently pointing to a lower opening on Friday, with stocks likely to come under pressure after ending the previous session modestly higher.
Trade concerns are likely to weigh on the markets once again after President Donald Trump revealed plans to use tariffs to compel Mexico to make efforts to stop flow of illegal immigrants across the country and into the U.S.
?On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP,? Trump announced in a post on Twitter
He added, ?The Tariff will gradually increase until the Illegal Immigration problem is remedied, at which time the Tariffs will be removed.?
Trump revealed in a subsequent White House statement the tariffs will be raised to 10 percent on July 1st if the crisis persists, with tariffs eventually rising as high as 25 percent by October 1st.
The president argued the sustained imposition of tariffs will produce a massive return of jobs back to U.S., describing the move as an effort to ?firmly and forcefully? stand up for America?s interests.
?We have confidence that Mexico can and will act swiftly to help the United States stop this long-term, dangerous, and deeply unfair problem,? Trump said.
?The United States has been very good to Mexico for many years,? he added. ?We are now asking that Mexico immediately do its fair share to stop the use of its territory as a conduit for illegal immigration into our country.?
The threat of new tariffs on Mexican imports comes amid the escalating trade dispute between the U.S. and China, which has recently weighed on stocks and raised concerns about the global economic outlook.
After failing to sustain an early move to the upside, stocks fluctuated over the course of the trading session on Thursday. The major averages spent a good part of the day bouncing back and forth across the unchanged line.
Eventually, the major averages closed in positive territory but well off their best levels of the day. The Dow rose 43.47 points or 0.2 percent to 25,169.88, the Nasdaq climbed 20.41 points or 0.3 percent to 7,567.72 and the S&P 500 edged up 5.84 points or 0.2 percent to 2,788.86.
The early strength on Wall Street partly reflected bargain hunting following recent weakness, with the Dow bouncing off its lowest closing level in well over three months.
An early rebound by treasury yields also contributed to the upward move, as a recent decline by yields has led to concerns about the outlook for the economy and the possibility of a recession.
Buying interest waned shortly after the start of trading, however, as traders seemed reluctant to get back into the markets due to lingering concerns about the U.S.-China trade dispute.
Amid a continued escalation of the rhetoric, Chinese Vice Foreign Minister Zhang Hanhui accused the U.S. of “economic terrorism” by raising tariffs on Chinese goods.
“We oppose a trade war but are not afraid of a trade war,” Zhang said. “This kind of deliberately provoking trade disputes is naked economic terrorism, economic homicide, economic bullying.”
A report from Bloomberg News indicating China has put purchases of U.S. soybeans on hold has added to concerns about a trade war.
Treasuries also turned higher over the course of the trading session, contributing to a notable downturn by yields.
On the U.S. economic front, the Labor Department released a report showing a modest uptick in first-time claims for U.S. unemployment benefits in the week ended May 25th.
The report said initial jobless claims edged up to 215,000, an increase of 3,000 from the previous week’s revised level of 212,000.
A separate report from the Commerce Department showed U.S. economic growth in the first quarter accelerated by slightly less than initially estimated.
The Commerce Department said real gross domestic product surged up by 3.1 percent in the first quarter, reflecting a slight downward from revision from the previously reported 3.2 percent jump.
The downwardly revised increase in GDP, which matched economist estimates, still represented a notable acceleration from the 2.2 percent growth seen in the fourth quarter of 2018.
Meanwhile, the National Association of Realtors released a report showing pending home sales unexpectedly pulled back in the month of April.
NAR said its pending home sales index tumbled by 1.5 percent to 104.3 in April after surging up by 3.9 percent to an upwardly revised 105.9 in March.
The pullback came as a surprise to economists, who had expected pending home sales to climb by 0.9 percent compared to the 3.8 percent jump originally reported for the previous month.
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
Energy stocks showed a significant move to the downside, however, with a steep drop by the price of crude oil weighing on the sector.
Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index tumbled by 2 percent, the Philadelphia Oil Service Index slumped by 1.7 and the NYSE Arca Oil Index fell by 1.3 percent.
Banking stocks also came under pressure over the course of the trading session, dragging the KBW Bank Index down by 1.3 percent.
On the other hand, gold stocks moved higher along with the price of the precious metal, with the NYSE Arca Gold Bugs Index jumping by 1.8 percent.
By Dipo Olowookere
Last week, investors traded 2.094 billion shares worth N52.967 billion in 64,612 deals on the floor of the Nigerian Exchange (NGX) Limited compared with the 1.183 billion shares valued at N28.868 billion in 42,397 deals a week earlier.
Nigerian stocks witnessed higher turnover in the week due to panic selling by the market participants, triggered by happenings in the global scene, especially as regards the trade war between the United States and China.
Analysis showed that the financial services sector was the busiest in the period under review, trading 1.539 billion units valued at N36.353 billion in 36,013 deals, contributing 73.49 per cent and 68.63 per cent to the total trading volume and value, respectively.
The agriculture industry recorded the sale of 98.884 million units worth N 1.344 billion in 2,772 deals, and the services counter exchanged 93.000 million units for N522.147 million in 3,012 deals.
Access Holdings, GTCO, and Zenith Bank led the activity chart with 629.327 million units worth N25.820 billion in 12,742 deals, contributing 30.06 per cent and 48.75 per cent to the total trading volume and value, respectively.
Business Post reports that 27 equities appreciated in the week versus 23 equities in the previous week, 56 equities depreciated versus 51 equities in the previous week, and 64 equities remained unchanged versus 73 equities a week earlier.
VFD Group topped the gainers’ log after chalking up 53.86 per cent to close at N87.70, Union Dicon expanded by 31.03 per cent to N7.60, Abbey Mortgage Bank jumped by 29.60 per cent to N6.13, FTN Cocoa rose by 18.75 per cent to N1.90, and TotalEnergies grew by 9.61 per cent to N745.00.
The losers’ chart was led by Royal Exchange after it lost 20.79 per cent to settle at 80 Kobo, Cornerstone Insurance declined by 15.15 per cent to N2.80, Sovereign Trust Insurance tumbled by 15.00 per cent to 85 Kobo, Lasaco Assurance shed 12.82 per cent to finish at N2.04, and CAP dwindled by 11.70 per cent to N41.50.
Data showed that the All-Share Index (ASI) and the market capitalisation depreciated by 0.90 per cent and 0.67 per cent each to 104,563.34 points and N65.707 trillion, respectively.
Similarly, all other indices finished lower apart from the growth and sovereign bond indices, which appreciated by 0.37 per cent and 3.42 per cent, respectively, while the AseM index closed flat.
By Adedapo Adesanya
Infrastructure Credit Guarantee Company Limited (InfraCredit) has announced the equity investment of N27 billion from a United Kingdom government-backed MOBILIST programme.
According to the company, the new equity investment will significantly strengthen InfraCredit’s guarantee issuing capacity, enabling greater support for creditworthy infrastructure projects.
InfraCredit is a AAA-rated specialised infrastructure credit guarantee institution backed by Nigeria’s sovereign wealth fund.
The equity raise involves InfraCredit’s formal transition to a Public Limited Company (Plc) and its listing by introduction on the NASD Over-the-Counter (OTC) Securities Exchange.
The raise came alongside other institutional investors, further strengthening its institutional shareholder base following the completion of its equity private placement.
The organisation also said the strategic investment marks a major milestone in its journey, reinforcing its commitment to unlocking long-term, local currency infrastructure financing in Nigeria and creating sustainable value for its stakeholders.
Commenting on this milestone, Mr Chinua Azubike, Chief Executive Officer of InfraCredit, stated this development marks a new chapter for the company as it help to accelerate infrastructure delivry in the country.
“This moment marks the beginning of a new chapter for InfraCredit. We are pleased with the confidence reposed in us by our new domestic institutional investor shareholders alongside the UK Government through MOBILIST, and our transition to a listed public company with access to equity capital markets. This reflects our ambition to build a deeper, more inclusive capital market for domestic resources that accelerates infrastructure delivery in Nigeria in line with our mission to unlock long-term local currency infrastructure finance,” he said.
On his part, Mr Jonny Baxter, British Deputy High Commissioner in Lagos, commented that “InfraCredit’s success highlights the power and impact of long-term partnerships, and the UK via the Foreign Commonwealth and Development Office (FCDO) is proud to have played a key role in not just the creation of InfraCredit but its continued growth.”
Speaking on the Listing, Mr Eguarekhide Longe, CEO, NASD said, “NASD PLC. and InfraCredit PLC have established a long-standing relationship initiated by the noting of the Multi-Issuer Clean Energy Bond series from 2022. The uniqueness of the Clean Energy Multi-Issuer Bond series underscores the transformational effect that InfraCredit has brought to the Nigerian Capital Market, providing guarantees as incentive to investors, mostly institutional, to participate in the infrastructure debt market.”
By Adedapo Adesanya
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has hailed the Federal Executive Council (FEC) for approving the continuation of the Naira-for-Crude policy, expressing optimism that the initiative, alongside the recent decline in global crude oil prices, will lead to a reduction in the cost of petroleum products in Nigeria.
Recall that the federal government recently confirmed that the Naira-for-Crude initiative with Dangote and other domestic refineries would continue to be implemented.
According to the federal ministry of finance, the stakeholders have reaffirmed the government’s continued commitment to the full implementation of this strategic initiative, as directed by the FEC.
The Naira-for-Crude policy allows local refineries, such as the Dangote Refinery, to purchase crude oil in Naira rather than US dollars. The move is aimed at strengthening Nigeria’s local refining capacity, enhancing energy security, and easing pressure on the foreign exchange market.
In a reaction to the development, PETROAN National President, Mr Billy Gillis Harry, commended President Bola Tinubu and key sectoral leaders for championing policies that prioritize affordability and price stability in Nigeria’s downstream sector.
“We commend the President, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, the Minister of Finance, Mr. Wale Edun, and the CEOs of NMDPRA and NUPRC for championing this bold step. This is a strategic move towards making fuel more affordable and insulating the Nigerian economy from global oil price shocks,” he stated.
The group further noted that the recent dip in international crude oil prices—caused by a mix of weakening global demand, economic slowdowns, and increased output from producers not under the Organisation of the Petroleum Exporting Countries (OPEC)—should translate into lower domestic fuel prices, especially with the Naira-for-Crude policy in effect.
“With local refineries now sourcing crude in Naira, the cost of production is expected to drop significantly. We believe this will be reflected in pump prices, allowing Nigerians to feel the benefits of falling global oil prices,” the association disclosed, linking the global price slump to geopolitical and economic shifts.
“The recession in major economies and reciprocal tariffs from President Trump’s administration have slowed global demand. This, combined with overproduction, has led to a supply glut,” it said.
“The Federal Executive Council has directed full implementation of the policy as part of efforts to strengthen local refining, reduce foreign exchange dependency, and stabilize the downstream petroleum sector.
“PETROAN’s optimism is rooted in the belief that Nigeria, by refining its own crude, can break free from the volatility of international markets and pass on cost savings to consumers.
“We are confident that this policy will help Nigeria achieve energy independence and greater price stability. We eagerly await its full rollout and encourage swift action to make the benefits felt across the country.”
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