The fiscal crisis being faced by Nigeria as a result of the coronavirus pandemic appears to be easing off a bit, following the gradual rebound of crude oil prices globally. The improved foreign exchange inflow has helped to ease off devaluation concerns.
The forward market is not isolated from the bullish trend, as the 12-month naira forwards increased to N454.50 per dollar on Wednesday, from a high of N522.56 on April 20. Also, the currency traded at N388 to the dollar in the spot market.
The local currency has also appreciated from N460 to a dollar to N445 to a dollar in the parallel market in less than 2 weeks, not long after the Central Bank of Nigeria started selling dollars to small and medium enterprises and foreign students.
The planned resumption of dollar sales to Bureau De Change (BDCs) is expected to further help ease the pressure in the market.
Meanwhile, the Brent traded over $40 per barrel, and the Nigerian Bonny light crude also traded almost $38 per barrel, both selling at the highest price in almost 3 months.
The oil prices are very important for Nigeria, as about 90% of its foreign exchange earnings is from crude oil sales.
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The foreign exchange market had been under intense pressure due to the low oil prices and the economic crisis caused by the coronavirus outbreak globally.
Nigeria’s external reserve had been badly hit, as it lost over $11 billion within a space of 10 months, crashing from its peak of $45.17 in June 11, 2019 to $33.42 in April 29, 2020.
The oil price increase has caused a rebound in the external reserve to over $36 billion as of June 1, and reduced the pressure on the naira with improved liquidity of the foreign exchange market.
Meanwhile, according to Bloomberg, a forecast from Fitch Ratings suggests that the naira is not yet out of the woods as a large current account deficit, capital outflows, and resistance to overhauling the exchange rate framework may cause a drop in external reserves to about $23 billion by the end of 2020.
This will adversely affect the apex bank’s capacity to defend the naira.
Nigerian bourse close flat, triggered by low market liquidity
Nigerian bourse ended flat on Wednesday coupled with thin market liquidity amid soaring crude oil prices.
The Nigerian bourse closed flat on Wednesday, as the All-Share Index and Market Capitalization improved 0.06% to 24,130.26 points and N12.587 trillion.
Consequently, YTD currently stands at 3.85%. A turnover of 208.20 million shares, valued at N1.761 billion was traded by investors in 3,648 deals. STERLNBK was the most traded stock by volume at 77.1million units, while ZENITH BANK finished the most traded stock by value at N247.8million.
Market sentiment, as measured by market breadth, closed in favour of the bear with 15 tickers closing in red relative to 12 gainers. JBERGER and NB were the top losers of the day with -9.88% and -9.84% declines respectively; while CUTIX and DANGSUGAR recorded the largest gains with +7.69% and +5.17% gains in share value.
Across sectors, two of the five indexes under our coverage gained. Price appreciation in GUARANTY (+0.94%) and ACCESS BANK moved the Banking index up by 0.37%, while the Industrial Goods trailed to gain 0.01%.
Conversely, the Consumer Goods and Insurance indexes were down -1.39% and -0.89% respectively on the back of sell-offs in NB (-9.84%), PZ (-3.33%) and WAPIC (-9.09%), while the Oil and Gas Index
CUTIX up 7.69% to close at N1.82,DANGSUGAR up 5.17% to close at N12.2AIRTELAFRI up 3.44% to close at N340,GUARANTY up 0.94% to close at N21.5,ACCESS up 0.82% to close at N6.15.
JBERGER down 9.88% to close at N15.5, NB down 9.84% to close at N30.7, CAVERTON down 6.15% to close at N1.83, STANBIC down 4.13% to close at N29, PZ down 3.33% to close at N4.35.
Nigerian bourse ended flat on Wednesday coupled with thin market liquidity, amid soaring crude oil prices. Nairametrics envisages cautious buying, as many investors remain on the sidelines.
OPEC launches Annual Statistical Bulletin (ASB)
The ABS would be a platform for reliable research data for analysts and policy stakeholders.
The Organization of Oil Exporting Countries (OPEC) has launched a bulletin to track data statistics of its members in the industry and other key economic indicators.
OPEC says that the ABS would be a platform for reliable research data for analysts and policy stakeholders.
“The Annual Statistical Bulletin (ASB) contains about 100 pages of tables, charts and graphs detailing the world’s oil and gas reserves, crude oil and product output, exports, refining, tankers, plus economic and other data” the body said.
Comprising of important current time data of the oil production industry, from production to demand and import/exports, including oil transport tracking.
OPEC announced the initial launch report will provide data on oil and gas activities of 13 countries including Nigeria and Algeria, Angola, Congo, Equatorial Guinea, Gabon, IR Iran, Iraq, Kuwait, Libya, Saudi Arabia, the UAE and Venezuela.
OPEC announced that the ASB would come with an interactive version on iOS and Android to optimize the valuable research data on the platform.
OPEC Secretary-General, Dr Mohammed Barkindo said the body is dedicated to high-quality data transparency to provide timely oil and gas metrics for analysts.
“This underpins OPEC’s overarching goal of fostering sustainable oil market stability for the benefit of producers, consumers and the global economy,’’ he added.
OPEC’s Head of Data Services Department, Ms Boshra AlSeiari, provided timely data from the ASb saying global demand grew 0.9% year on year with an average of 99.67 Million BPD in 2019, adding that the largest growth came from Asia (China and India in particular), Africa and the middle east.
“Total world crude oil production declined in 2019 by 0.56 million barrels/day (mb/d), or 0.7%, as compared to 2018, to average 75.26 mb/d, following a historical high during 2018.
“OPEC crude oil production declined sharply year-on-year by 1.86 mb/d, or 6.0% while crude production by non-OPEC countries grew by 1.30 mb/d, or 2.9 per cent.
“OECD oil demand fell slightly in 2019, while oil demand in OPEC member countries returned to growth in 2019,’’ AlSeiari said.
She also added that total exports from members averaged 22.48 million barrels per day in 2019, decreasing 7.4% from 2018 by 1.80 million barrels per day. She added that oil reserves of OPEC nation increased 3.7% in 2019 to 1,227 billion barrels and capacity to refine grew by 1.21 million barrels per day at 100.98 million by 2019.
“World proven crude oil reserves stood at 1,551 billion barrels (bn b) at the end of 2019, increasing by 3.6% from the level of 1,497 bn b recorded at the end of 2018,” she said.
Popular singer, Akon and other leading experts speak on Africa’s Crypto
Akon spoke about his cryptocurrency Akion, detailing how it is easy to exchange the digital coin.
As Africa remains the leading market in the crypto industry, Africa’s fastest-growing financial media company, Nairametrics, exclusively covered the African session of the 3rd-year anniversary of Binance, the world’s largest crypto exchange, with key African crypto stakeholders deliberating on the crypto industry in Africa.
Senegalese-American music celebrity, Akon who was one of the guests in one of the sessions spoke on crypto adoption in present-day Africa, having popular Hollywood film producer and Akoin co-founder, Jon Karas with Binance CEO Changpeng Zhao moderating the session.
Akon spoke about his upcoming cryptocurrency known as Akoin, detailing how it is easier to exchange the digital coin through an internal conversion mechanism, which will allow users to convert in and out of other fiat currencies or crypto assets.
He also spoke about the payments revolution the crypto industry will bring to Africa that is preceded by poor mismanagement of resources, unstable currencies, amongst other limiting factors. According to Akon, Africa stands a chance of becoming the frontier in the global crypto market accompanied by a wider increased investment interest in cryptocurrencies.
In a prelude to Akon’s interview, Yele Bademosi, founder & CEO of Bundle, spoke about the need for crypto stakeholders to do more in educating the world’s fastest-growing market, Africa, as many young Africans are still on their learning curve trying to understand the advantages and usage of blockchain and cryptocurrencies.
In addition, Chuta Chimezie a leading crypto expert, spoke on the importance of regulatory stakeholders in supporting the future of payment as governments not regulating cryptocurrency may be a limiting factor in spurring its growth on the continent. He also advised that the inclusion of leading African banks will boost the crypto African market, as their role can’t be underestimated.
The session ended with BNB tokens and gifts disbursed to some participants of the session, marking the third anniversary of the world’s largest crypto exchange, Binance.