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Markets

Nigeria’s crude oil demand is climbing back to pre-coronavirus levels

Offers for Nigeria’s oil are said to be “firming up” as crude oil prices maintain bullish trend.

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Saudi Aramco, NNPC to collaborate to revamp dilapidated Nigerian refineries 

Oil prices continued its rise on Tuesday as investors cheered on the news that global economies were easing down on sanctions and a vaccine to fight Covid-19 and passed a crucial test. According to several reports monitored by Nairametrics, a flurry of positive news is driving a spike in crude prices and could remain sustained till the end of the week.

As of Tuesday evening,  WTI benchmark was up +1.7% and trading at $32.36 while Nigeria’s benchmark Brent Crude was trading down at $34.44 down just 1%. It is important to note that Brent Crude is up from $29.3 which was the price last Tuesday (one week ago).

In another news, Reuters reports Nigerian sale of its Bonny Light crude also sustained its offers on Tuesday heading back to “Pre-Coronavirus levels” a positive development for the government. “Nigerian offers continued to firm on Tuesday, towards pre-coronavirus levels, though it was unclear at what level deals were taking place” Reuters reported. 

READ ALSO: Up in smoke: CBN rejects N432 billion in failed treasury bills bids

According to the report’

  • Nigerian Forcados was being offered around dated Brent plus $1.75 a barrel and Bonny Light and Qua Iboe around plus $2
    a barrel.
  • Similarly, offers for Nigerian Egina have jumped to dated Brent plus $2.50 after lingering at dated Brent flat.
  • Results of Indian firm IOC’s latest buy tender did not immediately emerge.

Bonny Light Crude price was trading for $33.95 when we tracked on Tuesday night.

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

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Stock Market

Investments in Nigerian stock market dips in January 2021 despite bullish run in 2020

Despite the strong performance by the bourse in 2020, total portfolio investments dipped in January 2021.

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SEPLAT, GUINNESS break Nigerian bourse support levels, investors lose N49 billion  , Nigerian Stock market records sixth consecutive loss, Investors lose N15.55 Billion,Nigerian Stock market records sixth consecutive loss, Investors lose N15.55 Billion

The Nigeria stock exchange (NSE) market drove a year-end bull run in 2020 despite the outbreak of the Covid-19 pandemic which caused a major downturn in the country’s economy.

Amongst 93 global equity indices monitored by Bloomberg, the NSE All-Share Index (ASI) appeared as the best-performing index in the world, surpassing the S&P 500 (+16.26%), Dow Jones Industrial Index (+7.25%), and other global and African market indexes, to post a one-year return of +50.03%.

Despite the strong performance by the bourse in the previous year, domestic and foreign portfolio dipped significantly in the month of January 2021. This is according to the NSE domestic and foreign portfolio investment report published on its website.

READ: Nigeria’s total public debt rises to N32.2 trillion ($84.57 billion) as at September 2020.

Specifically, the total transactions in the month of January 2021 stood at N232.46 billion, a 13.7% decline compared to N269.24 billion recorded in the previous month.

Also, total foreign transactions in the equities market stood at N47.52 billion in January 2021. This represents a decline of 32% when compared to N69.92 billion recorded in December 2020 and a 32.4% decline compared to N70.32 billion in the corresponding period of 2020.

Breakdown

  • Total foreign transactions in the month of January stood at N47.52 billion, while domestic transactions stood at N184.94 billion.
  • Foreign transactions accounted for 20.44% of the total transactions recorded in the bourse, a decline compared to 25.97% and 29.86% recorded in December 2020 and the corresponding period of 2020 respectively.
  • On the other hand, domestic transactions accounted for 79.56% in the month under review, an increase compared to 74.03% and 70.14% recorded in December 2020 and January 2020 respectively.
  • Foreign inflows dipped by 20.9% from N21.14 billion recorded in December 2020 to N16.73 billion in January 2021.
  • Also, foreign outflows decreased by 36.9% to stand at N30.79 billion in January 2021.
  • However, domestic transactions stood at N184.94 billion in January 2021. This represents a 7.2% decline compared to N199.32 billion recorded in the previous month while it increased by 11.9% compared to the corresponding period of 2020.

READ: Price Watch: Nigerians paid less for Kerosene in January 2021

According to the report, Institutional Investors outperformed Retail Investors by 28%. A comparison of domestic transactions in the current and prior month (December 2020) revealed that retail transactions increased by 10.16% from N61.22 billion in December 2020 to N67.44 billion in January 2021.

Also, the institutional composition of the domestic market decreased by 14.91% from N138.09 billion in December 2020 to N117.5 billion in January 2021.

A look at Historic data shows that over a fourteen (14) year period, domestic transactions decreased by 59.54% from N3.556 trillion in 2007 to N1.439 trillion in 2020 whilst foreign transactions increased by 18.45% from N616 billion to N729 billion over the same period.

READ: Nigeria’s inflation hits 16.47% as food prices soar to record high

Why this matter

The performance of the stock market in 2020 was met with caution as the All-share index of the Nigerian Stock Exchange declined in the first month of 2021. This could be attributed to profit-taking move by stock market investors and uncertainty surrounding the Nigerian economic landscape.

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Stock Market

Bamboo’s current rate for buying U.S Stocks weakens to N492/$1

Bamboo is currently offering its users a premium of more than 20% compared to the official exchange rate.

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The fast-rising Nigerian stock broking application, Bamboo, is currently offering an exchange rate of N492 to the dollar.

About two weeks ago,  the Nigerian stock trading app offered an exchange rate of about N484 to $1.

The green-coloured trading app known for allowing local-based Nigerians invest in stocks listed on the world’s biggest stock market (New York Stock Exchange and NASDAQ) is currently offering its users a premium of more than 20% compared to the official exchange rate set by the Nigerian apex bank.

READ: Nigerian Bitcoin P2P surges by 15% since CBN Crypto ban

That being said, other leading fintech platforms reviewed by Nairametrics also presently offer exuberant rates as high as about N519 to a dollar, thereby adding more transaction costs on a significant number of Nigerians hoping to trade such financial assets.

A growing number of Nigerians are currently increasing their exposure to the U.S stock market taking to the current bearish trend that is being witnessed in the Nigerian Equity market and growing urge in hedging against the weakening local currency.

READ: Many Nigerians are trooping into foreign stock markets

Bamboo: It is an investment platform that gives Africans real-time access to invest in or trade over 3,500 stocks listed on the American and Nigerian exchanges right from their smartphones or personal computer.

In partnership with US-based Drive Wealth LLC, Bamboo provides seamless, secure access to US and Nigerian securities.

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