Gold’s appeal up thanks to a weaker U.S dollar
McCaleb, co-founder of Ripple sells 28.6 million XRP
Covid-19: Oxygen demand in Lagos State has risen 5 times – Sanwo-Olu
Oil prices rally high on incoming COVID-19 relief program
Naira strengthens at NAFEX window despite 61% drop in dollar supply
COVID-19 Update in Nigeria
Daily Parallel Market Exchange Rate – ₦470/$1
Ethereum on rampage, breaks above its 2 year high
CAP and Portland Paints obtain Federal High Court approval on proposed scheme merger
Nigeria spends N29 trillion on recurrent (non-debt) expenditure in last 10 years
Stock Market
S&P 500 futures suffer longest run of losses since February
Futures contracts on the S&P 500 Index plunged by 1.4% at the time this report.
U.S. Stock futures started the trading week on a bearish footing, signaling losses at the opening U.S trading session on Monday. U.S stocks were hit by growing concern about new restrictions triggered by rising COVID-19 cases.
What we know; Futures contracts on the S&P 500 Index plunged by 1.51% at the time this report was drafted, pointing to a fourth straight daily decline, the longest stretch of losses for the gauge since the end of February.
Contracts on the Dow Jones Industrial Average and Nasdaq 100 fell 1.85% and 1.5%, respectively.
Quick fact; American Stock futures are simply standardized contracts that global traders use in purchasing or selling the U.S stock in a future date. This means that the U.S stock futures give an insight into what global investors see before the market opens, or after it close
Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics spoke on the prevailing fundamentals, giving stock bears an edge. Stock futures opened uncertain as investors remain confused about which way to move this morning as lockdown fears take charge with the UK government sounding alarm bells as the Covid-19 curve moves in the wrong direction.
After the initial economic bounce from full-blown lockdowns, both the UK and Europe’s economic trajectory could be entering a gloomy second phase characterized by ongoing social distancing, elevated unemployment, and increasing damage to the supply side.
(READ MORE: Nigerian Stocks on a 3-day losing streak, triggered by Dangote Sugar, Ecobank)
He also spoke on the parabolic nature of the world’s largest equity market, as the U.S election sets in, by saying;
“However, they remain weighed down by a drip-feed of negativity around Covid-19 resurgence, US fiscal impasse and as the market starts to factor in US election risk in earnest. Retail and hedge funds bought the initial Nasdaq dip after the September 2 carnage. But since then, there has been a noticeable shift in trading behavior where bounces are quickly faded.”
Political tensions also making global investors shaky as Democrats and Republicans prepare to fight over who will be the next Supreme Court justice.
Spotlight Stories
NSE Exchange Traded Funds (ETF) market capitalization hits N24.51 billion
The NSE stated that the NEWGOLD ETF emerged the best ETF for the second consecutive year, posting returns of 66.03%.
The assets under listing of the Nigerian Stock Exchange ETF market increased to N24.51 billion, as at the end of 2020, indicating an increase of 272%, compared to what was obtainable in similar period in 2019.
This is according to a statement made by the Chief Executive Officer of the Nigerian Stock Exchange, Mr Oscar Onyema, during the recently concluded webinar organized by the NSE, and themed; ‘’NSE 2020 Market Recap and 2021 outlook.’’
Key highlights:
The following are the key highlights of the NSE-ETF market;
- Trading volume increased to 13.02 million units as at the end of 2020, up by +218.23% Year-on-Year.
- Market turnover skyrocketed to N56.66 billion, indicating a massive increase of 51,831% Year-on-Year. This signifies increased interest in Nigeria’s ETF market.
Mr Onyema emphasized that the impressive performance is attributable to a number of factors, such as;
- The unattractive yield in the fixed income market which led investors to seek alternative asset classes.
- The launch of two new ETFs, which are Meristem Growth ETF and Meristem Value ETF.
- The growing adoption of the asset class by investors and asset managers on the back of a strong Year-on-Year growth.
In the same vein, the NSE also announced that one of its subsidiaries – NG Clearing has received approval in principle from the Securities and Exchange Commission (SEC), to launch clearing and settlement of its first Exchange Traded Derivatives (ETDs) as Nigeria’s premier central counterparty clearinghouse.
What you should know:
- According to Investopedia, an exchange-traded fund (ETF) is a type of security that involves a collection of securities—such as stocks—that often tracks an underlying index, although they can invest in any number of industry sectors or use various strategies.
- Unlike mutual funds, ETF trades like a stock on the exchange, with a relatively higher daily liquidity and lower fees.
- Based on the 2020 review, the NEWGOLD ETF emerged as the best performing ETF for the second consecutive year posting a return of 66.03%.
Stock Market
UBA, ARDOVA drop, Nigerian Stocks investors lose N16 billion
With 43 gainers to 21 losers, most sectoral indices closed positive, underlining the bargain-hunting across the sectors.
Nigerian Stocks ended the second trading session on a slightly bearish note. The All Share Index dropped by 0.07% to close at 41,051.63 index points as against the -0.23% plunge recorded on Monday.
- Its Year-to-Date (YTD) returns presently stands at +1.94%. Nigerian investor’s losses stood at N16.08 billion.
- Nigerian Stocks trading turnover ended negative as volume dipped by 28.91% as against the +10.79% upsurge recorded yesterday.
- The NSE Insurance Index led the gainers by 6.29%, while the Consumer Goods index trailed distantly by 0.56% On the flip side, the NSE Banking, Oil & Gas, and Industrial Index dropped by 0.73, 0.46, and 0.36% respectively.
- With 43 gainers to 21 losers, most sectoral indices closed positive, underlining the bargain-hunting across the sectors.
READ: Nigerian Stocks start-up 2021 on gains from GTBank, WAPCO, Zenith Bank
Top gainers
- NNFM up 7.96% to close at N8
- FLOURMILL up 3.23% to close at N32
- WAPCO up 2.08% to close at N24.5
- NB up 1.67% to close at N61
- PRESCO up 0.68% to close at N74.5
READ: Google, Facebook, Twitter stocks drop, investors ponder if big techs have become too powerful
Top losers
- ARDOVA down 8.63% to close at N18
- BUACEMENT down 1.13% to close at N79
- UACN down 5.39% to close at N7.9
- ACCESS down 3.65% to close at N9.25
- UBA down 2.20% to close at N8.9
READ: Analysis: Japaul, Ardova, Champion Breweries; What is behind the deals?
Outlook
Nigerian Stocks ended Tuesday’s trading session on a slightly bearish note, amid soaring oil prices prevailing at the U.S trading session. At the time of writing this report, Brent crude was trading below $55/barrel.
- The equities market closed today with a tinge of bearishness as profit-taking transactions on large-cap stocks depressed the overall market position to a net capital loss of N16 billion.
- Nairametrics envisages cautious buying on the sentiments that recent price action shows further market correction in the near term. However, stock traders anticipate the bullish run is still in play for the long term.
Stock Market
Portland Paints gain 9.84% on news of proposed scheme merger with CAP Plc
Shares of Portland Paints Plc gained 9.84% on the floor of the Nigerian Stock Exchange.
Portland Paints and Products Nigeria Plc stocks are up by 9.84% at press time as investors scamper for the shares of the company on news of a merger with Chemical Allied Products Plc.
According to data from the Nigerian Stock Exchange (NSE), Portland Paint shares cleared at N2.68 per share with 291,830 units worth N782,104.40 crossing hands, in 6 deals on the floor of the exchange today.
Read Also: Livestock Feeds shares have gained N1.6 billion since January 4
It is important to note that the current price of the shares of the company is still below the offered cash consideration of N2.90 for each ordinary share of N0.50 held in Portland Paints, in line with the proposition of the scheme merger.
However, the cash consideration offered to shareholders is 8.2% higher than the current share price of the company.
Read Also: Dangote Cement shares lose N339 billion following completion of share buyback
What you should know
- Nairametrics reported that the Judicial Division of the Federal High Court has approved the proposed scheme merger between Chemical Allied Products Plc and Portland Paints Plc, and other matters connected therewith.
- Upon the Scheme becoming effective, shareholders of Portland Paints Plc, at the close of business on the Terminal Date, shall be offered a Cash Consideration of N2.90 for each ordinary share of N0.50 held in Portland Paints, or be allotted 1 ordinary share of N0.50 each in the share capital of CAP (credited as fully paid) in exchange for every 8 ordinary shares of N0.50 each held in Portland Paints.
