The Nigerian Stock Exchange (NSE) ended Thursday’s trading session in positive territory. The All-Share Index closed at 27,424.92 basis points, up 0.05%. Year to date, the index is down by 12.74%.
Top Gainers: AXA Mansard Insurance Plc was the best-performing stock today. The stock gained 9.09% to close at N1.80. Jaiz Bank Plc also gained 5.26% to close at N0.40. FCMB Plc gained 4.35% to close at N1.68. Chams Plc gained 4.00% to close at N0.26. Wema Bank Plc rounded off the top five gainers for today. The stock gained 3.64% to close at N0.57.
Top Losers: On the flip side, Nigerian Aviation Handling Co Plc was the worst-performing stock, declining by 10% to close at N2.24. Africa Prudential Plc fell by 10% to close at N3.42. Guiness Nigeria Plc also fell by 10% to close at N41.40. United Capital Plc fell by 9.95% to close at N1.90. UACN Property Development Co Plc rounded off the top five losers for the day. The stock shed 9.68% to close at N1.12.
Top Trades by Volume: FBN Holdings Plc was the most actively-traded stock today. 58.9 million shares valued at N295 million were traded in 317 deals. Zenith Bank Plc was next with 39 million shares valued at N664 million traded in 515 deals, followed by Access Bank Plc with 38.3 million shares valued at N233 million traded in 194 deals.
Guaranty Bank Plc was next with 29.7 million shares valued at N804 million traded in 299 deals. UAC- Property Development Company Plc rounded off the top five most actively traded stocks today with 20 million shares valued at N22.4 million traded in 10 deals.
Universal Insurance Plc has released its financial statements for the period ended March 31, 2019. Gross Premium Written increased from N346 million in 2018 to N650 million in 2019. Profit before Tax dipped from N131 million in 2018 to N61 million in 2019. Profit after Tax also dipped from N118 million in 2018 to N47 million in 2019.
Trans-Nationwide Express Plc has released its financial statements for the period ended June 30, 2019. Revenue increased from N362 million in 2018 to N410 million in 2019. Profit before Tax increased from N6.6 million in 2018 to N20.8 million in 2019. Profit after Tax also increased from N4.4 million in 2018 to N18.5 million in 2019.
Economic restrictions in world’s largest economy lower crude oil prices
Brent crude lost about or 1.62 to trade at $42.04 per barrel.
Crude oil prices dropped lower on Tuesday amidst worries that new restrictions on businesses aimed at curbing the surge of U.S. COVID-19 cases could threaten fuel demand recovery. Also, expectations that OPEC+ might remove the cap placed on crude oil output from August, in a meeting scheduled for Wednesday, has sent Brent crude further south.
Brent crude lost about 1.62% to trade at $42.04 per barrel by 6.25 am local time, after losing about 1% yesterday.
Sell-offs in the energy derivative increased pace in the energy market after news filtered in about California’s Governor commanding a massive retrenchment of the state’s reopening, banning indoor restaurants, shutting bars, gyms, hair salons, and closing churches in hardest-hit regions.
Quick fact: Brent crude is the leading global benchmark for Atlantic basin crude oils. The international benchmark is used to set the price for about two-thirds of the world’s traded crude oil, including Nigeria’s crude (Bonny Light, Brass River, Qua Iboe, etc.).
Meanwhile, Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, spoke about the OPEC scheduled meeting that oil traders are focused on. He said:
“Still, speculation on OPEC+ strategy ahead of OPEC’s Joint Ministerial Monitoring Committee meeting tomorrow could make for an exciting 24 hours.
“Existing plans call for OPEC+ cuts to taper in August after a one-month extension.
“While Russia has already indicated it expects to increase production in line with the agreement, there is the possibility that uncertainty around demand as a result of rising coronavirus infections will lead to another extension of the deepest initial phase of cuts.
“Traders do not expect the outcome to be hugely significant for oil either way. The most critical deliverable for OPEC+ is the continued demonstration of unity within the group.”
Facebook, Microsoft, Amazon shares drop, top U.S official orders lockdown
Tech stocks in the S&P 500 have rallied nearly 16% this year.
Most U.S tech stocks on the Nasdaq composite slumped yesterday, as tech juggernauts, Facebook Microsoft, NVidia, Amazon, shed more than 2% after gaining earlier on Monday.
The selloff could be attributed to the California Governor’s order on closure of indoor restaurants, shut bars, gyms, hair salons, and closing churches in hardest-hit regions.
Tech stocks in the S&P 500 have rallied nearly 16% this year, even after Monday’s 2.1% slump, fueling a logic-defying market rebound that has largely pulled the major U.S. stock indexes out of their pandemic-induced slump.
Unofficially, the Dow Jones Industrial Average rose 11.04 points, or 0.04%, to 26,086.34, the S&P 500 lost 29.69 points, or 0.93%, to 3,155.35 and the Nasdaq Composite dropped 226.60 points, or 2.13%, to 10,390.84.
Quick fact; The Nasdaq Composite is made up of companies that trade on the Nasdaq. These companies include major software and internet-based juggernauts (Apple, Facebook Microsoft, NVidia, and Amazon) but also include biotech, financial and industrial companies’. The Nasdaq Composite tracks over 3000 stocks.
“The rally’s been driven by a handful of names. You’ve had headlines about COVID and layoffs and the economy. It’s finally caught up with these names everybody’s been hiding in,” said Michael O’Rourke, chief market strategist at Jones Trading in Stamford, Connecticut.
Naira gains at the NAFEX window as market liquidity improves
Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Monday.
The exchange rate at the parallel market remained stable closing at N465/$1 on Monday, July 14th, 2020. However, on the officially recognized NAFEX Market, the forex turnover rose by 44.4% while the exchange rate strengthened to N386/$1.
Parallel Market: At the black market where forex is traded unofficially, the Naira remained stable as it closed at N465 to a dollar on Monday, according to information from Aboki FX a prominent FX tracking website. This was the same rate that it exchanged on Friday. However, during intraday trading, Nairametrics research observed the dollar sold for as high as N467/$ and as low as N462/$1. Nairametrics FX tracker reported a parallel market FX rate of N462/$1.
NAFEX: The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Monday, closing at N386/$1, compared to the N387 that was reported on Friday, July 10, representing a N1 gain. The opening indicative rate was N387.46 to a dollar on Monday. This represents a N1.33 drop when compared to the N386.13 to a dollar that was recorded on Friday.
Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS, and the NAFEX (I&E window). Nairametrics reported a few weeks ago that the government has set plans in motion to unify the multiple exchange rate in line with requirements from the World Bank. Nigeria is seeking a world bank loan of up to $3 billion. The country has been under pressure from the International Monetary Fund and the World Bank for currency reforms.
Meanwhile, forex turnover at the Investor and Exporters (I&E) window recorded an increase on Monday, July 13, 2020, as it rose by 44.4% day on day. According to the data tracked by Nairametrics, forex turnover rose from $25.17 million on Friday, July 10, 2020, to $36.28 million on Monday, July 13, 2020. The turnover which is still low is an indication of the liquidity pressure in the foreign exchange market and a far cry from an average of $200 million recorded at major trading days during the last few weeks.
Nairametrics reported last week that the CBN official rate has been adjusted from N360 to a dollar to N381 at its SMIS window where forex is sold to importers and SME’s. According to Bloomberg, “Nigeria quietly devalued its official exchange rate last week, a nod to IMF suggestions that foreign investors would appreciate the unification of a currency that has traded at multiple rates for five years. In the event, the handling of the 5.5% devaluation of N381 per dollar still served to sow confusion. The Central bank hasn’t announced the change and is yet to adjust the rate on its website.’’
Nairametrics had earlier reported that the Central Bank of Nigeria (CBN), directed all authorized dealers to immediately stop the processing of Form M for importers of maize in the country. This latest directive was contained in a notice that was addressed to authorized dealers by the apex bank.
This is seen as part of measures by CBN to manage and control the demand of the scarce foreign exchange thereby reducing the pressure on the country’s external reserve. This new import restriction is an addition to the 41 items which had been ban by the apex bank some years ago from assessing foreign exchange through the official window.
According to a monitored report on Bloomberg, ‘’The naira should be between N427 and N491 to a dollar, converging with the black market rate. It could depreciate even more if the unofficial rate weakens further and when the central bank lifts restrictions on access to dollars, which has created a hard currency shortage hurting local importers.’’
Forex News: On Monday, the Central Bank of Nigeria (CBN) has directed all authorised dealers to immediately discontinue the processing of Forms M for maize/corn importation into the country. This directive is contained in a notice that was addressed to authorised dealers and signed by Dr O.S Nnaji, CBN’s Director in charge of Trade and Exchange Department.