The Nigerian Stock Exchange ended the week on a positive note as the All Share Index closed at 32,766.37 basis points, up 0.71%.
The index also closed the month, in the red down 5.97%. Year to date, the market is in the negative down 14.32%.
28 equities appreciated in price during the week, lower than 50 in the previous week. 41 equities depreciated in price, higher than 25 equities of the previous week, while 100 equities remained unchanged higher than 94 equities recorded in the preceding week.
Niger Insurance Plc
Niger Insurance was the best performing stock today. The stock opened at N0.31 and closed at N0.37, up N0.06 or 19.35%. Year to date, the stock is down 26%.
Veritas Kapital Assurance Plc
Veritas Kapital gained 15.38% during the week. The stock opened at N0.26 and closed at N0.30, up N0.04. Year to date, the stock is 40%.
UACN Property Development Company
UACN Property Development Company appreciated by 14.71%. The stock opened at N1.70 and closed at N1.95, up N0.25. Year to date, the stock is down 30.11%.
First Aluminium Plc
First Aluminium opened at N0.37 and closed at N0.41, up N0.04 or 10.81%. Year to date, the stock is down 18%.
The company had earlier this week held its Annual General Meeting, during which retail shareholders protested its plans to voluntarily delist from the Nigerian Stock Exchange (NSE).
Stanbic IBTC Holdings
Stanbic IBTC Holdings appreciated by 9.52% this week. The stock opened at N42 and closed at N46, up N4. Year to date, the stock is up 10.41%.
Linkage Assurance Plc
Linkage Assurance Plc opened at N0.64 and closed at N0.70, up N0.06 or 9.37%. Year to date, the stock is up 6.06%.
University Press Plc
University Press Plc appreciated by 7.33% during the week. The stock opened at N1.91 and closed at N2.05, up N0.14. Year to date, the stock is down 10.09%.
Cement Company of Northern Nigeria Plc
Cement Company of Northern Nigeria (also known as Sokoto Cement) opened at N23.70 and closed at N25.30, up N1.60 or 6.75%. Year to date, the stock is up 166.32% and is the best performing stock on the NSE, year to date.
Neimeth International Pharmaceuticals
Neimeth International Pharmaceuticals opened at N0.62 and closed at N0.66, up N0.04. or 6.45%. Year to date, the stock is down 12%.
Vitafoam Plc rounds up the list of top 10 gainers. The stock appreciated by 6.06%, opening at N3.30 and closing at N3.50, up N0.20. Year to date, the stock is up 16.67%.
Union Bank Plc
Union Bank was the worst performing stock this week. The stock opened at N5.80 and closed at N5.10, down N0.70 or 12.07%. Year to date, the stock is down 34.62%.
Union Diagnostic and Clinical Services Plc
Union Diagnostic and Clinical Services Plc declined by 10.53% during the week. The stock opened at N0.38 and closed at N0.34, down N0.04. Year to date, the stock is down 32%.
Livestock Feeds Plc
Livestock Feeds Plc opened at N0.63 and closed at N0.57, down N0.06 or 9.52%. Year to date, the stock is down 31.33%.
Unity Bank Plc
Unity Bank Plc shed 9.38% this week. The stock opened at N0.96 and closed at N0.87, down N0.09. Year to date, the stock is up 64.15% and is the best performing bank stock.
UAC of Nigeria Plc
UAC of Nigeria Plc opened at N11.80 and closed at N10.70, down N1.10 or 9.32%. Year to date, the stock is down 36.69%.
Nigerian Aviation Handling Company Plc (NAHCO) Aviance
NAHCO Aviance opened at N3.60 and closed at N3.27, down N0.33 or 9.17%. Year to date, the stock is down 17.84%.
ABC Transport Plc
ABC Transport Plc opened at N0.33 and closed at N0.30, down N0.03 or 9.09%. Year to date, the stock is down 40%.
Guinness Nigeria Plc
Guinness Nigeria Plc also shed 9.09% this week. The stock opened at N88 and closed at N80, down N8. Year to date, the stock is down 14.89%.
Berger Paints Plc
Berger Paints Plc opened at N6.90 and closed at N6.30 down N0.60 or 8.70%. Year to date, the stock is down 25.80%.
Japaul Oil and Maritime Services Plc
Japaul Oil and Maritime Services Plc opened at N0.24 and closed at N0.22, down N0.02 or 8.33%. Year to date, the stock is down 56%.
Investors flock to US dollar, as Gold, Bitcoin, Global Stocks record heavy sell-offs
The US dollar is stronger this morning on the back of a marked drop in risk appetite in European and US markets.
The U.S dollar closed high on Monday, hitting a six-week high, as currency traders and global investors rushed into the safe-haven currency.
This is coming on growing COVID-19 fears and worries over the U.S. Congress’ stimulus impasse drove a heavy sell-off in almost all other assets that include gold, Bitcoin, and Stocks.
What we now; At the time this report was drafted, Bitcoin traded at $10,463.98 with a daily trading volume of $23,554,819,012. BTC price is down -4.6% in the last 24 hours.
Gold spot lost about 2.1% to trade at $1,909.05 per ounce on Monday, after falling as much as 3.4% earlier in the session, its lowest since Aug. 12. U.S. gold futures settled down 2.6% at 1,910.60.
Australia’s S&P/ASX 200 dropped 0.7% pressured by miners and energy stocks, while China’s blue-chip index shed 0.1% and Hong Kong’s Hang Seng index was down 0.5%. Japanese markets were closed for a public holiday
However, at the time this report was drafted, U.S. Dollar Index, which tracks the greenback against a basket of other currencies, dropped some gains to trade at 93.608
Quick fact: The U.S. Dollar Index tracks the greenback against a basket of major global currencies such as the Japanese yen, British pound sterling, Swedish Krona, Euro, etc. Individuals hoping to meet foreign exchange payment obligations via dollar transactions to countries like Europe, and Japan, would need to pay more dollars in fulfilling such payment obligations.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics gave vital insights on the safe-haven currency, saying:
“The US dollar is stronger this morning on the back of a marked drop in risk appetite in European and US markets, but off overnight highs, as US stocks are rebounding in good order.
“Two factors explain much of the risk aversion. Banking shares are sharply lower following the International Consortium of Investigative Journalists report examining bank behavior in the context of Suspicious Activity Reports. Travel and leisure names are weaker in Europe on the back of continued angst around the rising COVID-19 case count in the Eurozone and the UK.
“The fickle nature of currency trading these days suggests that as US stocks fall, the USD rises, reflecting the USD’s dominance in demand when there are big down moves in risk sentiment.”
U.S Banks now permitted to hold Tether, Circle
The OOC has insisted that national banks and federal savings associations may hold “reserves” on behalf of customers who issue stablecoins.
These are surely good times for Stabelcoins. The world’s largest economy’s banking regulator.
In a detailed letter released yesterday, permitted national banks to hold reserve currencies for stablecoins (Tether, Circle). The letter which was released by the Office of the Comptroller of the Currency (OCC) responds to questions regarding the application of stablecoin-related bank activities. It concludes that national banks and federal savings associations may hold “reserves” on behalf of customers who issue stablecoins, in situations where the coins are held in hosted wallets.
“National banks and federal savings associations currently engage in stable coin-related activities involving billions of dollars each day,” Acting Comptroller of the Currency, Brian P. Brooks, said. “This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner.”
The letter addresses the use of stablecoins backed by a single fiat currency on a one-to-one basis, where the bank verifies at least daily that reserve account balances meet or exceed the number of the issuer’s outstanding stablecoins.
What are Stablecoins?
Stablecoins are cryptocurrencies created to minimize the price swings that occur in a crypto asset. They are usually pegged to fiat currencies and often exchange-traded commodities.
Stablecoins give owners a sense of security as users can store their assets whenever there is high volatility in the crypto-verse or other financial markets.
Consumers can also with great ease convert from unpegged cryptocurrencies to stablecoins when they are worried about where the markets are heading next, eliminating the need to return to a fiat currency.
These conversions can also be less expensive than when switching between crypto and fiat, as it takes the transaction fees of payment processing providers and banks out of the equation.
Global Investors and traders are using it to give their investment portfolios exposure to the US Dollar during these times when uncertainty is high, as a result of the worst pandemic (COVID-19) known to man.
Sequel to this landmark statement, Nairametrics about a month ago, detailed the importance of stablecoins in modern-day finance.
“Stablecoins like Tether are particularly useful for capital flight, as their USD-pegged value means users selling off large amounts in exchange for their fiat currency of choice can rest assured that it’s unlikely to lose its value as they seek a buyer,” Chainalysis said in the report.
Crude oil prices drop again after losing 4% on Monday
Oil benchmarks fell around 4% on Monday following rising concerns of increased coronavirus cases.
Crude oil prices drifted lower at the later part of Asia’s trading session on Tuesday, as Tropical Storm Beta in the Gulf of Mexico weakened.
What we know: Brent oil futures were down by 0.31% to $41.31 at the time this report was drafted, and WTI futures fell by 0.23% to $39.22.
Both oil benchmarks fell around 4% on Monday, hit by rising concerns that an increase in coronavirus cases in major markets could spur fresh lockdowns and hurt demand.
Oil prices are falling again amid Tropical Storm Beta reduced in power in the Gulf of Mexico, allaying fears of an extended shutdown that began in the previous week with Hurricane Sally.
In a note to Nairametrics, Stephen Innes, Chief Global Market Strategist at AxiCorp, spoke on the macros disrupting the price of hydrocarbon.
“In line with broader markets, oil prices were hammered lower overnight as the growth assets buckled amid lockdown fears in Europe and the UK.
There continues to be concern around the effects on demand of the resurgence in Covid-19 cases globally as countries have to counterbalance the economic and health issues in getting back to work. The second half of 2020 was always going to reflect this price see-saw.
While mother nature is doing its part as traders focus on the hurricane season in the US, OPEC+ cuts seem to be tightening the market.”
However, the COVID-19 crisis continues to deepen with growing concerns about global energy demand arising from the latest data on the spread of the virus in major world economies such as the U.K.