Google, the world’s most popular search engine firm, was the only one out of the four major technology companies (including Amazon, Facebook, and Apple) that failed to impress investors with its Q2 2020 earnings results.
Why Google shares plunged: Google Properties revenue dropped 8% to $25.13 billion as against estimates of $24.98 billion. That segment includes advertising and services revenue from Gmail, Google Play, YouTube, and Google Search.
Alphabet shocked investors on Friday by reporting a decline in Google’s advertising revenue year-over-year for the first time in history. Consequently, Alphabet’s class A (Google’s parent company) share price closed at $1,482.96 after losing about 3.17%, breaking its strong support level of $1,500.
Stock traders’ growing concern over Google’s ability to raise its revenue from advertising was partly responsible for the unimpressive performance in its share price
However, the search engine giant reported quarterly profit of nearly $7 billion on revenue that topped $31 billion after removing traffic-acquisition costs.
“We’re working to help people, businesses, and communities in these uncertain times,” said Sundar Pichai, Chief Executive Officer of Google and Alphabet. “As people increasingly turn to online services, our platforms — from Cloud to Google Play to YouTube — are helping our partners provide important services and support their businesses.”
Why you shouldn’t sell the stock yet: Amid all the bad macros stated above, YouTube advertising revenue surged by 6%, even as Alphabet’s latest business segment, cloud computing business, got 43% bigger in Q2, 2020
“In the second quarter our total revenues were $38.3B, driven by the gradual improvement in our ads business and strong growth in Google Cloud and Other Revenues,” said Ruth Porat, Chief Financial Officer of Alphabet and Google. “We continue to navigate through a difficult global economic environment,” she added.
Professional forex traders reveal their secrets to successful trading
Expert forex traders give insightful tips to becoming a successful forex dealer.
Is forex or currency trading worth the risk? This is one of the most popular questions a lot of individuals ask when considering trading forex. They do so because currency trading is among the top lucrative jobs in finance around the world.
Data obtained from salary.com revealed that the average foreign exchange trader’s salary at the entry level in the world’s biggest economy was $76,458 as of July 27, 2020. However, the range typically falls between $42,048 and $97,964 for the rest of the world.
Bank forex traders only make up 5% of the total number of currency traders around the world, with other retail forex speculators accounting for the remaining 95%. But even at that, these few bank traders account for 92% of all forex volumes globally.
So, how can one become a good Forex trader?
Michael Chukwuka, a currency trader at a leading Nigerian bank who spoke to Nairametrics, shared insight on what it takes to be a Forex dealer at a bank. He said:
“In my years of being a banker and a forex trader, I would say it has been an interesting one for me. But what I tell a lot of people who have exclaimed ‘Oh wow!! I hear you guys make a lot of money trading,’ is that well, true there is a lot of money to be made in any business venture you go in and also so much money to be lost. This all depends on the will power to learn, understand, and have the will power to be guided properly with a goal in mind not just I want to be a Forex Trader.”
Micheal also stressed that currency trading is not for the faint-hearted. In other words, you must be emotionally strong and have proper risk management in place. He continued by saying:
“Trading in the banking space is a whole different ball game than trading for your own self. The same techniques are used from Price Action Trading, Trend Trading Strategy, Position Trading, Forex Scalping Strategy and a whole lot more, but you first of all need to know in-depth what you are about to start and be willing to go down the tunnel because you would make losses which most times scare people and they give up. In the same vein, you can make so much profit as you see everywhere today on the internet, but mind you, the losses are real too.”
He rounded up by advising that as a matter of importance, those who want to learn forex must have proper risk management in place. He said:
“We would keep this short, but I would advise you to learn the first basic steps to guide a forex trader on the right path. A few of these tips can be read about to get a full understanding of what it entails as it guides you along the path of being a forex trader. Knowledge is power, set aside funds, set aside time, start small, time those trades, cut losses with limit orders, be realistic about profits (This isn’t a Ponzi scheme).”
Lukman Otunuga, a Senior Research Analyst at ForexTime (FXTM), spoke to Nairametrics from his London office, on why discipline is paramount in trading forex. He said:
“When going head-on with the largest and most liquid market in the world, one needs to have faith in their trading strategy. Discipline is critical and sticking to the game plan is the real test, especially when things do not go your way. Aim for positive risk/reward setups as trading is a numbers game. Most importantly, respect the volatile and unpredictable nature of the markets.”
Opeoluwa Dapo-Thomas, an independent oil trader, in a phone chat interview with Nairametrics, laid emphasis on the importance of having a good strategy when trading Forex. He said:
“What makes professional traders stand out is their stance on risk management. Every trader has a strategy and a plan. Executing these plans is one thing, managing it is another kettle of fish. With proper risk management, professional traders try not to over-leverage while trading and still target decent returns.
“For example, 30-40% returns in a year from trading out do return on most risk-free investments and portfolio benchmarks. New FX traders ignore proper risk management and target 200-300% returns which most times ends up disastrous for their accounts.”
Finally, it’s very important to note that the present world can boast of less than 5% successful Forex traders. Therefore, to be among these elite class of traders, you must have a very good strategy, proper risk management plans, be highly disciplined, have the ability to make snap judgment calls, and great knowledge of currency markets.
Import substitution, devaluation spur revenue growth for Dangote Sugar
The company said it sold higher sugar volumes in the quarter compared to the previous quarter.
Nigeria’s largest sugar manufacturer, Dangote Sugar reported a year on year revenue growth of 31.7% in the second quarter of 2020. The revenue growth was spurred by government policies on border closure and exchange rate devaluation, even though it conversely increased cost and reduced margins.
Key Highlights – 2020 Q2
- The sugar giant reported revenues for the 3 months ending June 2020 closed at N55.5 billion compared to N42.2 billion in the same quarter in 2019.
- Second-quarter revenue growth also topped Q1 revenue of N47.6 billion despite the severe impact of the COVID-19 pandemic.
- Pre-tax profits also grew to N7.5 billion, 19%yoy in the same period
- Profit margin – 9.37% (2020 Q1: 13.4%, 2019 Q2: 9.4%)
- Sales (tonnes) – 189,724 vs 158,818 +19.5
Reason for the revenue boost
A review of the results reveals the company continued to receive a sales boost from increased demand from customers within Nigeria. This was also largely due to the positive impact of the border closure and import substitution policy of the government. In an earnings press release seen by Nairametrics, the company explains that it sold higher sugar volumes in the quarter compared to the previous quarter.
“We had a strong performance in the 2nd quarter of 2020 with the delivery of 382,917 tonnes, which translated to a 13.6% growth over the same period in 2019.”
Despite the COVID-19 lockdown, logistic bottleneck, and traffic gridlock, Dangote Sugar produced 182,692 tonnes of sugar in the second quarter of the year compared to 160,917 same periods in 2019. Though it was still lower than the 192,584 produced in the first quarter of 2020.
Effect of government policies
The company has benefitted immensely from government policy on border closure and import substitution. Both policies mean local manufacturers like Dangote Sugar can meet the demand of local purchasers who rely on sugar as input for other finished goods. The devaluation also appears to have helped boost revenues due to price adjustments.
Revenue growth of 28.5% forged ahead of volume growth due to pricing benefits on the back of rise in FX rate. The 1st half of the year performance reflects our drive for topline growth, despite the continued grid gridlock in Apapa; in addition to rising inflation and the deplorable state of roads to our key markets nationwide.
Its two major customers are Nigerian Bottling Company and Seven-Up Bottling company limited, combining to purchase about 10% of its sales. The two companies buy industrial non-fortified sugar from Dangote Sugar Plc. Its non-fortified sugar makes up 35% of sales. Half of its sales are made in Lagos, while another 38% is in the North.
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Whilst, government policies did help, Dangote Sugar also suffered from cost spikes due to the devaluation and forex shortages.
“The Company’s performance during the period under review was impacted by COVID-19 pandemic which caused disruption to the global economy, availability of foreign exchange, oil prices, consumer demands, and social interactions. This led to the enormous FX shortage in Nigeria, and the huge backlog of FX demands, due to the constricted ability by the CBN to meet FX demands.”
Dangote Sugar currently implements a backward integration programme and targeting to produce target to produce 550,000MT of refined sugar by 2020.
Apple becomes world’s largest public listed company, valued at $1.82 trillion
Apple’s stock ended the trading session at $425.04, putting its market valuation at $1.82 trillion.
Apple, the leading global brand in technology, recorded a major feat at the end of the trading session for the week by becoming the biggest publicly listed company in the world. This feat was recorded when Apple’s shares gained over 10% to a record high on Friday after reporting impressive quarterly results.
Apple has now overtaken Saudi Aramco (Saudi’s state-owned oil company) to become the world’s most valuable publicly listed company.
Apple’s stock ended the trading session at $425.04, putting its market valuation at $1.82 trillion, according to the share count the company provided on Friday.
Saudi Aramco, which had been the most valuable listed company since going public in 2019, now has a market capitalization of $1.760 trillion as of the end of the last trading session.
How it happened: Recall that Nairametrics, about a day ago, revealed how Apple Inc’s Q3 revenue smashed Wall Street forecasts in spite of COVID-19 restrictions, showing that consumers bought more new iPads, iPhones, and Mac computers to stay connected during the COVID-19 era.
Fiscal third-quarter revenue stood at $59.7 billion, a record for the June period, Apple disclosed in a statement. That was up 11% from a year earlier and beat analysts’ estimates of $52.3 billion.
The feat recorded by Apple on Friday was its largest one-day percentage gain since March 13, and it added $172 billion in market value during the trading session on Friday.