Economy
Yellen Testimony in Focus on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a mixed opening on Wednesday, as the Dow futures are up by 69 points but the Nasdaq futures are down by 4.75 points.
Traders may be reluctant to make significant moves ahead of remarks by outgoing Federal Reserve Chair Janet Yellen.
Yellen is scheduled to testify on the economic outlook before the Congressional Joint Economic Committee beginning at about 10 am ET.
In prepared remarks released ahead of her appearance, Yellen said economic growth appears to have stepped up from its subdued pace early in the year.
Yellen noted inflation has continued to run below the Fed’s 2 percent target but said recent lower readings on inflation likely reflect transitory factors.
The Fed Chair also reiterated that she expects gradual increases in interest rates will be appropriate to sustain a healthy labor market and stabilize inflation around the central bank’s objective.
Stocks saw some volatility in afternoon trading on Tuesday but managed to end the session firmly in positive territory. With the strong upward move on the day, the major averages climbed to new record closing highs.
The major averages ended the session just off their best levels of the day. The Dow surged up 255.93 points or 1.1 percent to 23,836.71, the Nasdaq climbed 33.84 points or 0.5 percent to 6,912.36 and the S&P 500 jumped 25.62 points or 1 percent to 2,627.04.
The notably higher close on Wall Street was partly due to news the Republican tax reform bill took another key step forward, as the legislation was approved by the Senate Budget Committee.
Members of the Senate Budget Committee voted 12 to 11 to advance the bill, with the vote coming down strictly along party lines.
The vote to send the bill to the Senate floor came after Republican Senators Bob Corker, R-Tenn., and Ron Johnson, R-Wis., dropped their objections to the bill.
The full Senate could vote on the bill as early as Thursday, although the legislation still includes significant differences from the House version.
Traders also reacted positively to remarks by Federal Reserve Chair nominee Jerome Powell, who testified before the Senate Banking Committee.
Powell told the committee he favors “tailoring” banking regulations so the largest and most complex institutions face the most stringent regulations while the burden on smaller banks is reduced.
The Fed Chair nominee also said the case for a December interest rate hike is “coming together” and said the central bank will continue reducing its $4.5 trillion balance sheet in a process that will take three or four years.
Powell repeatedly refused to comment on the potential economic impact of the Republican tax reform legislation working its way through Congress.
On the economic front, the Conference Board released a report showing an unexpected improvement in consumer confidence in the month of November.
The Conference Board said its consumer confidence index climbed to 129.5 in November from an upwardly revised 126.2 in October. Economists had expected the index to drop to 124.5.
With the unexpected increase, the consumer confidence index rose to its highest level since reaching 132.6 in November of 2000.
In mid-afternoon trading, some selling pressure was generated by reports that North Korea fired a ballistic missile, although traders quickly shrugged off the news.
Banking stocks showed a substantial move to the upside over the course of the session, driving the Dow Jones Banks Index up by 3.3 percent. With the jump, the index reached its best closing level in three weeks.
The rally by banking stocks partly reflected a positive reaction to Powell’s comments regarding financial regulations, which he called “tough enough.”
Significant strength also emerged among airline stocks, as reflected by the 2 percent gain posted by the NYSE Arca Airline Index. The index reached its best closing level in over a month.
Trucking, railroad, brokerage, and housing stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.
By Adedapo Adesanya
Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.
The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”
The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).
Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,
Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”
On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
By Adedapo Adesanya
The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.
This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.
She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.
Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.
She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).
Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.
She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.
“To address these issues, the commission has initiated a comprehensive review of its investment regulations.
“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.
She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.
“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.
“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.
“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.
“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.
She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.
“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,
Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.
“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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