COVID-19 Update in Nigeria
US Capitol complex temporarily shut down
Champion Breweries gains 32.35% in a week, following Heineken’s indirect acquisition of its shares
Kinyungu Ventures Research calls for changes to cut-and-paste VC strategy in Africa
Flour Mills shares lose N7.4 billion on NSE, as investors book profit
COVID-19 Update in Nigeria
Daily Parallel Market Exchange Rate – ₦470/$1
4 cryptos gain over 400% in a month, far outperforming Bitcoin
Naira remains stable across forex markets as external reserve continues to rise
Oil prices tumble on fears of global economic recovery
Market Views
Bank stocks remain a buy amid uncertainty prevailing Nigeria’s economy
The All-Share Index and Market Capitalization depreciated by 2.57% to close the week at 34,136.82 and N17.838 trillion respectively.
Nigerian Stocks ended the previous week cumulatively on a bearish note.
What we know: The All-Share Index and Market Capitalization depreciated by 2.57% to close the week at 34,136.82 and N17.838 trillion respectively.
In the previous week, Nigerian Stocks had its bullish run halted arbitrarily on the bias that stock traders and investors intensified their profit, taking into account the significant amount of weak earnings recorded by Nigerian Banks.
It was unsurprising to see four Nigerian banks in the top 10 losers chart for the week, as investors fretted on such performance on the basis that Nigeria’s banking industry remains the most vibrant after Agriculture, Energy in Africa’s largest economy.
That said, In the coming week stock traders are expected to be very cautious amid recent macros showing Africa’s largest economy has dipped into a recession in Q3 as oil production dropped to a four-year low.
Abdul-Rasheed Oshoma Momoh, Head of Capital Market in TRW Stockbrokers Ltd, in a phone chat interview with Nairametrics, said Nigerian markets are presently playing out like a ping pong ball the momentum has slowed down for now.
More of consolidation now as investors buy into good stocks that have a light at the end of the tunnel. (Zenith Bank, UBA, GTBank, First Bank, Access Bank) taking into consideration he doesn’t see any new highs now till 2021.
Bottom- line: Profit taking is expected to remain at least in the near term, taking into consideration Nigeria is officially in a recession, meaning a lot needs to be done to get Africa’s biggest economy on its foot, as such development could trigger more profit-taking in spite of the positive trend playing relatively at Africa’s best-performing equity market.
Market Views
Bitcoin, Gold, leading Stocks tumble on strong U.S dollar
The U.S dollar index gained 0.6% on the day to settle at 90.77.
The dollar was fired up at the last trading session of the week crushing its major currency rivals, Bitcoin, Gold, and leading global Stocks.
The U.S dollar retained its safe-haven status on the account of the U.S Dollar Index settled remarkably higher than a basket of six other global major currencies.
The U.S dollar index gained 0.6% on the day to settle at 90.77.
READ: U.S Central Bank leader says no rush into crypto dollar
What this means
Investors are piling to the U.S dollar after receiving worrying U.S economic data. Retail sales in the world’s largest economy were off 0.7% last month, the third straight drop.
- Such upsides seen in the greenback’s value saw gold at the expense of a charging dollar whose strength astonished metal traders, saw gold futures losing as much as 1.16% to settle at 1,829.90/ounce
- Also at press time the flagship crypto asset, Bitcoin traded at $35,756.99 with a daily trading volume of $70 Billion.
- Bitcoin is down 7.38% for the day.
READ: Google, Facebook, Twitter stocks drop, investors ponder if big techs have become too powerful
Also, the world’s biggest stock market by market volume and liquidity suffered heavy losses, as data showed the Dow Jones Industrial Average plunged by 0.57% to settle at 30,814.26 index points, the S&P 500 lost about 0.72% to settle at 3,768.25 and the Nasdaq Composite fell by 0.87% to close at 12,998.50 index points.
The greenback was an outlier at the last trading session despite drops seen in U.S bond yields associated with the benchmark 10-year U.S. note, whose resurgence in the previous week had been the catalyst for the U.S dollar comeback.
READ: Gold on a grand slam win, gains $40 per ounce
What they are saying
Milan Cutkovic, Market Analyst at Axi, in an explanatory note to Nairametrics, spoke on fundamentals supporting the rebound of the U.S dollar;
- “Many investors continue to stand on the side lines. President-elect Joe Biden unveiled his US$1.9 trillion stimulus plan. There were no major surprises, and a lot of it was already priced in.
- “Investors are now focused on how quickly the Biden administration can implement their plans and support the ailing US economy. Although Biden will be inaugurated on Wednesday, the second impeachment of Donald Trump might overshadow the first few weeks of his term.
- “Investors are also increasingly confronted with the reality that the pandemic is still far from being under control, despite the significant progress that was made in the past few months, and several COVID-19 vaccines already on the market.”
READ: Silver surpasses three-week high, joins Bullish momentum
Bottom line
Investors are increasingly confronted with the reality that the pandemic is still far from being under control, thereby flocking back to the safe-haven currency despite the significant progress that was made in the past few months, and several COVID-19 vaccines already on the market.
Market Views
Google, Facebook, Twitter stocks drop, investors ponder if big techs have become too powerful
Some powerful politicians have publicly decried the role these tech brands are having in censoring speeches.
Leading U.S tech stocks including Facebook, Apple, Twitter, Amazon, and Google experienced record sell-offs on growing global sentiments that big tech companies are getting out of control.
Such macros weighed heavily on these stocks as evidenced in Monday’s trading session performance for these tech stocks.
READ: Top 10 stockbroking firms traded stocks worth N1.17 trillion in 2020
At the end of Monday’s trading session,
- Twitter lost about 6.41%
- Facebook down by 4.01%
- Apple dropped 2.32%
- Google (Alphabet) fell by 2.31%
- Amazon down by 2.15%
READ: Opera launches Opera For Business and announces new partnership with Google My Business
Also, some powerful politicians publicly decried the role these tech brands are having on censoring speech, as senior lawmakers in France and Germany, including German Chancellor Angela Merkel, voiced their concerns.
The fall is largely attributed to record sell-offs from investors on account of these tech brands’ decision to permanently ban one of its most popular and powerful users, President Trump, and other leading voices from their social networks.
READ: 5 Nigerian startups selected to join 7 others at the Africa Tech Summit Connects (ATS)
What this means
Stock experts further anticipate such a move could deprive fast-rising tech brands of one of their best traffic-generators, as well as risking alienating some people who share the opinion that tech brands like Twitter, Google, Facebook have become too powerful.
Milan Cutkovic, Market Analyst at Axi, in a note to Nairametrics, spoke on the prevailing macros disrupting U.S stocks at least for the near term.
- “Fears of a global trade war have weighed multiple times on markets during the past few years. While concerns remain, the risk of trade tensions escalating has declined with Biden entering the White House soon.
- “While the US-China relations will remain complex, they could warm up somewhat after four turbulent years. Meanwhile, tech giants, Facebook and Twitter, have found themselves in a political crossfire by blocking US President Trump from their platform, which also weighed on the NASDAQ index.”
READ: Banks Vs Fintechs – Who should be Afraid? (Part Two)
What to expect: The question of whether big tech has become too powerful is likely to lead to some heated discussions in the coming weeks.
Market Views
Twitter drops 8.5% in early trading over President Trump ban
Record sell-offs from investors on account of the social media giant’s decision to ban, one of its most popular and powerful user, President Trump.
An American leading social media company, Twitter, saw its shares drop as much as 8.5% at the start of Monday’s trading session on the New York Stock Exchange.
READ: Mike Pence to go against Trump, announces he will attend inauguration
The fall is largely attributed to record sell-offs from investors on account of the social media giant’s decision to ban one of its most popular and powerful users, President Trump, permanently from its social network.
READ: Co-founder of Floyd Mayweather-backed crypto sentenced to prison for fraud
Stock experts further anticipate such a move deprives the fast-rising tech brand of one of its best traffic-generators, as well as risking alienating some people who share the opinion that tech brands like Twitter, Google, Facebook have become too powerful.
READ: Facebook suspends Donald Trump indefinitely
The tech brands are trying to stay away from accusations that they helped fuel the violence during the storming of the Capitol in Washington some days ago by a mob sympathetic to President’s Trump election loss.
