It appears that consumers’ and investors’ confidence are gradually been restored across major markets across the globe. Below are the performances of global markets:
In a stunning turn of events, the U.S, largest economy, added jobs in May after a record-high number, the previous month. The jobless rate fell to 13.3% from 14.7% in April.
In addition, there have been surveys indicating that consumer confidence, manufacturing and services industries were stabilizing.
Despite last May’s surprise increase, payrolls are nearly 20 million below their pre-COVID-19 level. However, this could indicate that the post-pandemic recovery may not be as drawn out as feared.
Following over 2-months of lockdown as a result of the pandemic, the Federal Government released guidelines of the second phase of the lockdown easing.
The second phase of the lockdown easing is to last 4 weeks spanning from June 2nd – June 29th and will see airlines begin operating from June 21. While the curfew is still in effect, it has been relaxed and is now in effect from 10 p.m. to 4 a.m.
In what appears to be a bid to address the revenue situation that plagues the country as a result of the pandemic, the country has launched its first licensing round for marginal oilfields in nearly 20 years.
Marginal fields are smaller oil blocks that are typically developed by indigenous companies. The Federal Government revoked the existing licenses on the fields so that they could be put into the new licensing round; additionally, judges in Lagos have blocked the government’s efforts to revoke two existing oilfield licenses.
In a recently concluded OPEC+ meeting, the bloc agreed to extend the supply cut by an additional month, bringing the total length of the cuts to 4 months.
It appears the cuts have brought some stability to the oil markets as oil prices gained 48% during its first month. As at print time, oil finally crossed the $40/bbl point ($40.08/bbl) for the first time since March.
Funding rates expanded significantly last week on the back of the c.N600 billion retail FX funding and CRR Debit.
OBB and Overnight rates rose by 1340 bps and 1380 bps to close the week at 15.60% and 16.70% from 2.20% and 2.90% respectively w/w. Market liquidity is estimated to be c.N150 billion according to market sources.
Experts expect funding rates to hover around current levels next week barring any significant flows.
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The Treasury Bills market started the week on a relatively quiet note with minimal activity witnessed across board due to the unattractive NTB yields. Hence, activity in the space maintained its relatively weak trend for the rest of the week on the back of the limited market supply.
According to experts in Commercio Partner, a similar trend in the Treasury Bills market is expected next week as attention skews towards the PMA.
The Bond market started the week on a relatively quiet note with minimal volumes seen across as most of the attention was skewed towards the Sukuk bond offering.
Nevertheless, activity began to improve slightly throughout the week as liquidity continues to spur a bullish bias in the market. In all yields decline by 9 bps w/w.
Nigeria’s FX reserve declined by 0.54%, USD$17.09 million WoW to $USD36.58 billion, its first decline in weeks. Consequently, the naira depreciated against the US Dollars, pared by 0.04% week-on-week to $1/₦386.50 at the I&E window.
At the parallel market, the currency depreciated against the US Dollars, Pound Sterling & the Euro to $1/₦460, £1/₦545 & €1/₦472 from $1/₦450, £1/₦540 & €1/₦470, respectively in the previous week.
Last week the benchmark index declined by 0.98% to 25,020.72 points. Featuring on the gainers’ chart for the week are SKYAVN (+50.83%), JAPAULOIL (+50.00%), UAC-PROP (+20.00%) and ABCTRANS (+17.14%).
On the other hand, AFROMEDIA (-23.08%), UACN (-13.89%), FIDSON (-12.94%), PZ (-12.73%), and CADBURY (-11.56%) were listed on the laggard’s chart for the week.
The Exchange witnessed 3 sessions of gains in all the trading session for the week. Hence, YTD return came in at -6.79% from -5.86% in the previous week.
Market Capitalization settled at NGN13.05 billion. The equity market breadth closed negative at 0.67x (compared to 1.55x recorded last week) as the market recorded thirty-nine (39) advancers in contrast to twenty-six (26) decliners in the week.
In the coming week, the experts expect to see continued profit-taking activities on the exchange.
Nasdaq continues to fall as Dow sets new high
The Dow Jones Industrial Average rose 97.31 points or 0.3% to close at 34,230.34, a new high.
The Dow Jones Industrial Average rose 97.31 points or 0.3% to close at 34,230.34, a new high.
The S&P 500 index increased by 0.1% to 4,167.59 points. However, the Nasdaq Composite dropped 0.4% to 13,582.42, as Amazon, Netflix, and Facebook both fell more than 1%.
The sharp drop in growth stocks the day before came after Treasury Secretary Janet Yellen indicated on Tuesday that interest rates would need to rise to prevent the economy from overheating, with economic activity rebounding much faster than anticipated as vaccines are administered and social distancing requirements are relaxed. Later in her remarks, she clarified that she was not “predicting or suggesting” a near-term interest rate hike because the Federal Reserve makes that decision.
Nonetheless, some companies have stated that rising demand and supply chain shortages have driven prices higher, raising concerns among market participants about signs of overheating. According to an ADP study released on Wednesday, private payrolls increased by 742,000 jobs in April. This result fell short of economists surveyed by Dow Jones’ estimates of 800,000 jobs. The March report from ADP was revised upward by 48,000 workers.
According to economists polled by Dow Jones, the IHS Markit U.S. services purchasing managers index came in at 64.7 in April, beating expectations of 63.3. However, the ISM non-manufacturing index came in at 62.7, which was slightly below estimates. PMIs are measured so that readings above 50 indicate that an economic field is expanding.
After data from the American Petroleum Institute showed a sharp drawdown in U.S. oil inventory, oil prices initially soared, with futures for the U.S. benchmark West Texas Intermediate topping $66 per barrel. The United States of America West Texas Intermediate (WTI) crude settled at $65.63 per barrel, down 6 cents, or 0.09%.
As countries struggle to produce life-saving doses, the Biden administration declared on Wednesday that it supports waiving intellectual patent rights for Covid-19 vaccines. Following the story, large pharmaceutical firms that manufacture vaccines saw their stock prices plummet. Moderna’s stock has fallen by more than 6%.
PayPal post its strongest Q1, with net profits of $1.10 billion
PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion.
The fintech juggernaut posted impressive growth in its revenues in Q1 bolstered by the growing usage of the digital economy. PayPal stated it had revenues of $6.03 billion in Q1 and earnings per share of $1.22, which outperformed market analysts’ forecast of $1.01.
Altogether PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion from $84 million a year earlier.
The company is riding high taking into consideration that online shopping hit a record high spurred by COVID-19, though some market pundits argue that such could change as the pandemic eased. Still, PayPal’s stellar performance does not look likely to succumb to that prediction anytime soon.
Highlights of PayPal Q1 earning results
- Earnings per share: $1.22, adjusted, vs. $1.01 per share expected in a Refinitiv survey of analysts.
- Revenue: $6.03 billion vs. $5.90 billion expected by Refinitiv.
- Total payment volume: $285 billion vs. $265 billion expected in a FactSet survey.
“Our strong first-quarter results demonstrate sustained momentum in our business as the world shifts into the digital economy,” said CEO Dan Schulman in a statement.
The company’s impressive performance was also reflected in the addition of 14.5 million new active accounts, with 1.5 million new merchant accounts included, bringing the total merchant accounts to 31 million globally.
“Our record-breaking first quarter results underscore the ongoing strength, diversification, and relevance of our scaled, two-sided, global payments platform. We are raising our FY’21 guidance based on these strong results.” John Rainey the CFO added.
Consequently, Paypal has upgraded its service offerings with the option of the ability for splitting up purchases and paying them off for a period of time as well as the ability to purchase and sell, Bitcoin, Ethereum, Litecoin, Bitcoin Cash.
Recent price actions reveal PayPal rose as high as $259.55 in extended New York trading after the announcement was made thereby posting gains of 4.65%.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- 2021 Q1 Results: FTN Cocoa Processor Plc reports loss after tax of N162.21 million
- Tantalizers Plc reports a loss after tax of N97.75 million in FY 2020 in Q1 2021.
- Courteville Business Solutions Plc proposes final dividend of 3 kobo per share for FY 2020.
- 2020 FY Results: UPDC Real Estate Investment Trust records over 500% growth in Profit after tax.
- Sovereign Trust Insurance records a 43% surge in profit after tax to N392.1 million in Q1 2021.