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Markets

Neimeth drops gainers crown this week

The Nigerian Stock Exchange All-Share Index and Market Capitalisation depreciated.

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Cornerstone Insurance leads this week’s gainers as NSE closes on negative note

The Nigerian Stock Exchange All-Share Index and Market Capitalisation depreciated by 0.51% to close the week at 35,266.29 basis points and N12.875 trillion respectively. Year to date, the index is down 7.73%.

16 equities appreciated in price during the week, lower than 20 in the previous week. 56 equities depreciated in price, higher than 47 equities of the previous week, while 97 equities remained unchanged, lower than 103 equities recorded in the preceding week.

Gainers

International Breweries Plc

International Breweries was the best performing stock this week. The stock gained 10%, opening at N32 and closing at N35.20, up N3.20. Year to date, the stock is down 35.41%.

Portland Paints and Products Nigeria Plc

Portland Paints is a subsidiary of UAC of Nigeria Plc. The stock opened at N2.25 and closed at N2.47, up N0.22 or 9.78%. Year to date, the stock is up 12.27%.

The company’s Chairman and immediate past Group Managing Director (GMD) of UACN Plc, Larry Ettah resigned this week. Ettah, had recently stepped down from the board of sister companies UPDC plc and CAP Plc.

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Sovereign Trust Insurance Plc

Sovereign Trust Insurance opened at N0.24 and closed at N0.26, up N0.02 or 8.33%. Year to date, the stock is down 48%.

AXA Mansard Insurance Plc

AXA Mansard Insurance gained 7.14% during the week. The stock opened at N2.38 and closed at N2.55, up N0.17. Year to date, the stock is up 32.13%.

Unilever Plc

Unilever Plc opened at N52.50 and closed at N55, up N2.50 or 4.76%. Year to date, the stock is up 34.15%.

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Cutix Plc

Cutix Plc gained 4.50% this week. The stock opened at N4.00 and closed at N4.18. Year to date, the stock is up 107.96%.

Custodian Investment Plc

Custodian Investment Plc opened at N5.13 and closed at N5.33, up 3.90% or N0.20. Year to date, the stock is up 37.02%.

Dangote Cement Plc

Dangote Cement Plc gained 2.80% during the week. The stock opened at N214 and closed at N220, up N6.00. Year to date, the stock is down 4.35%. The stock had earlier in the week hit a year low.

Linkage Assurance Plc

Linkage Assurance Plc opened at N0.72 and closed at N0.74, up N0.02 or 2.78%. Year to date, the stock is up 12.12%.

Niger Insurance Plc

Niger Insurance rounds up the top 10 gainers with a 2.56% gain. The stock opened at N0.39 and closed at N0.40, up N0.01. Year to date, the stock is down 20%.

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Losers

Neimeth International Pharmaceuticals Plc

Neimeth leads the losers chart this week, switching places from the prior week. The stock fell by 25%, opening at N0.80 and closing at N0.60, down by N0.20. Year to date, the stock is down 20%.

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Secure Electronic Technology Plc

Secure Electronic Technology (formerly known as NSL Tech) opened at N0.29 and closed at N0.23, down N0.06 or 20.69%. Year to date, the stock is down 54%.

Skye Bank Plc

Skye Bank Plc hit a year low during the week. The stock opened at N0.59 and closed at N0.48, down N0.11 or 18.64%. Year to date, the stock is down 4%.

Berger Paints Plc

Berger Paints opened at N8.00 and closed at N6.55, down N1.45 or 18.13%. Year to date, the stock down 22.85%.

Continental Reinsurance Plc

Continental Reinsurance Plc closed at N1.40, down N0.29 from the N1.69 it started the week with. Year to date, the stock is flat.

Wapic Insurance Plc

Wapic Insurance depreciated by 12.50% during the week. The stock opened at N0.40 and closed at N0.35, down N0.05. The stock is currently trading at a new year low.

Union Diagnostic and Clinical Services Plc

Union Diagnostic fell by 12.12% this week. The stock, which a few weeks ago was one of the best performing, opened at N0.33 and closed at N0.29, down N0.04. Year to date, the stock is down 42%.

Learn Africa Plc

Learn Africa Plc opened at N1.27 and closed at N1.12, down N0.15 or 11.81%.

Oando Plc

Oando Plc shed 11.71% during the week. The stock opened at N5.55 and closed at N4.90, down N0.65. Year to date, the stock is down 18.12%.

UBA Plc

UBA Plc rounds up the top 10 losers this week. The stock fell by 11.64% during the week, opening at N9.45 and closing at N8.35, down N1.10.  Year to date, the stock is down 18.93% and is currently trading at a year low.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

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Commodities

Oil prices hit highest price level since Q1

Crude oil prices hit their highest price levels since March at the second trading session of the week.

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Crude oil prices rebound ease investors’ concerns for Nigeria debt market, How substantial is compliance for the Oil market?, Crude Oil price soars high on new COVID-19 vaccine

Crude oil prices hit their highest price levels since March at the second trading session of the week. The macros driving crude oil bulls to such gains include reports that COVID-19 vaccine candidate might likely tame the rising COVID caseloads, coupled with U.S. President-elect Joe Biden going ahead to begin his leadership transition.

  • At the time of writing this report,  Brent crude futures rose higher than 1% to trade at $46.56 a barrel while U.S. West Texas Intermediate crude soared higher than 1%, to $43.59 a barrel.
  • Brent crude futures on Tuesday struck its highest price level since early March after the fight between the two oil-producing juggernauts (Saudi Arabia and Russia), which sent oil prices melting like an ice cream exposed in the sun.
  • Both major oil benchmarks closed 2% up yesterday after gaining about 5% last week.

Stephen Innes, Chief Global Market Strategist at Axi in an explanatory note to Nairametrics dissected the macros hitting crude oil prices to soar higher;

“Oil benefited from the vaccine news, with WTI trading around $43 a barrel and Brent near $46 even when the US dollar rallied on positive US PMI numbers and taking a bit of steam out of the broader commodity markets.

“While the air looks a bit thin above WTI $43, still, the announcement over the weekend that US COVID-19 vaccinations could begin in early December has spurred another wave of optimism for oil and wider markets, bolstered yesterday by the AstraZeneca version of the vaccine.

“Oil markets are rightly jumping for joy as the AstraZeneca delivery is a big deal as most of the developed world will be able to immunize its most at-risk population to COVID by the spring and likely the entire community by mid-year.”

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What to expect: The curve has continued to shift, flattening considerably from 3Q21 into 1Q22, with the time spreads from Dec21 now in backwardation. The shortage is priced into WTI from the end of next year as a capital discipline remains the priority for oil firms.

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Currencies

Naira falls at NAFEX market as dollar supply drops further despite demand pressure

The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Monday, closing at N386/$1.

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Dollar, Exchange rate, FOREX, NAFEX market turnover drop by 59%, Naira crashes to N470/$1 as currency uncertainty worsens 

Forex turnover dropped by 31.5%, as Nigeria’s exchange rate at the NAFEX window depreciated against the dollar to close at N386/$1 during intra-day trading on Monday, November 23.

Also, the naira appreciated marginally against the dollar, closing at N483/$1 at the parallel market on Monday, November 23, 2020, as ABCON warns forex speculators against forcefully pushing for the devaluation of the naira to aid their illegal activities.

This is also as demand pressure increases as importers stock up goods ahead of Christmas sales.

The CBN, a few days ago relaxed its earlier policy on banning third parties from having access to foreign exchange routed through Form M.

Parallel market: According to information from Abokifx – a prominent FX tracking website, at the black market where forex is traded unofficially, the Naira appreciated against the dollar to close at N483/$1 on Monday.

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This represents an N1 gain when compared to the N484/$1 that it exchanged for on Friday, November 20.

  • The local currency had strengthened by about 7.8% within one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers.
  • This is to boost the supply of dollars in the foreign exchange market and reduce the high demand for forex by traders.
  • The CBN has sold about $1 billion to BDCs since they resumed forex sales on Monday, September 7, 2020.
  • This was expected to inject more liquidity into the retail end of the foreign exchange market and discourage hoarding and speculation.
  • However, the exchange rate against the dollar has remained volatile after the initial gains made, following the CBN’s resumption of sales of dollars to the BDCs.
  • The President of the Association of Bureau De Change Operators, Aminu Gwadebe, said he expects the impact of the extra liquidity in the market to be gradual.
  • Despite the drop in speculative buying of foreign exchange, the huge demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.

NAFEX: The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Monday, closing at N386/$1.

  • This represents a 17 kobo drop when compared to the N385.83/$1 that it exchanged for on Friday, November 20.
  • The opening indicative rate was N386.05 to a dollar on Monday. This represents an 18 kobo gain when compared to the N386.23 that was recorded on Friday.
  • The N394.83 to a dollar was the highest rate during intra-day trading before it still closed at N386 to a dollar. It also sold for as low as N383/$1 during intra-day trading.
  • Forex turnover: Forex turnover at the Investor and Exporters (I&E) window declined by 31.5% on Thursday, November 19, 2020.
  • According to the data tracked by Nairametrics from FMDQ, forex turnover dropped from $66.89 million on Friday, November 20, 2020, to $45.84 million on Monday, November 23, 2020.
  • The CBN is still struggling to clear the backlog of foreign exchange demand, especially by foreign investors wishing to repatriate their funds.
  • The drop in dollar supply after some trading days of improvement reinforces the volatility of the foreign exchange market. The supply of dollars has been on a decline for months due to low oil prices and the absence of foreign capital inflow into the country.
  • The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
  • Total forex trading at the NAFEX window in the month of September was about $1.98 billion, compared to $843.97 million in August.
  • The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.
  • A financial expert and Managing Director of Financial Derivatives had stated that he expects the exchange rate at the parallel market to likely depreciate to N470-N475/$1 in November and December due to low oil prices that will further limit foreign exchange supply.
  • Some members of MPC of the CBN have expressed serious concerns over the increasing demand pressure in the country’s foreign exchange market. This is an obligation of manufacturers to their foreign suppliers that continues to increase in the face of dollar shortages.

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Cryptocurrency

Why Bitcoin still looks like a bargain

With prices exceeding $18,000 for the first time since 2017, BTC looks poised to break its previous all-time high.

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Bitcoin on high demand, hits 2-year high, trading $17,000

As stakeholders, players, and crypto wannabes ponder if increasing their stakes on Bitcoin, the world’s most popular crypto seems ideal now, despite the fact that it’s trading near a record high, Nairametrics decided to weigh in on some key fundamentals showing Bitcoin looks like a bargain.

With prices exceeding $18,000 for the first time since 2017, BTC looks poised to break its previous all-time high. More investors are holding bitcoin for wealth preservation.

READ: Bitcoin on high demand, hits 2-year high, trading $17,000

A recent report from Glassnode, revealed plummeting Bitcoin exchange balances support the narrative that investors intend to hold their flagship crypto more than ever before, taking into consideration that with the prevailing demand in play, and limited supply of Bitcoin, the price would most definitely go north.

READ: Nigerians pay heavy price as laptop scarcity bites harder

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Bitcoin liquidity continues its downward trajectory, buttressing that the macro bitcoin is becoming scarce for open sale.

It is also important to note that Bitcoin has a circulating supply of 19 million coins and a max supply of 21 million coins, meaning there are about 2million left to be mined.

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READ: How Crypto can curb Nigeria’s high unemployment rate

Taking into account that about 4 million Bitcoins have been lost forever as a result of BTCs owners dying, and their next of kin not having access to such cryptos, it is fair to say there are only about 15million BTC presently in circulation to cater for over 7 billion people fighting to have a stake in Bitcoins, meaning that as BTC becomes scarce and more popular, it becomes a matter of time that the crypto asset valuation will hit the roof.

READ: Ripple hits a big bang, gains 30%

Bottom line

It’s vital to consider the bias saying that as global financial regulators begin to implement their regulatory framework on cryptos, it could become a matter of months for global banks and multinationals to increase their buying pressures on BTC. Thereby, pushing the price beyond the reach of an average investor.

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