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Spotlight Stories

Bulls stage a comeback at Nigerian stock market

Nigerian bourse ended the third trading session of the week amid falling oil prices across the market spectrum.

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The Nigerian stock market ended the third trading session of the week on a bullish note. The All Share Index rallied by 0.14% to close at 40,221 index points.

Year-to-date return and market capitalization settled at -0.12% and N21.04 trillion respectively.

  • Activity level strengthened as total volume and value of stocks traded grew 38.95% and 82.28% to 469.56 million units and N7.08 billion respectively.
  • The top traded stock by volume and value was ZENITHBANK (1.15%) at 154.6 million units valued at N4.09 billion.
  • The NSE Oil & Gas index topped the gainers, up 0.79% on the back of sustained buy interest in OANDO.
  • Investor sentiments as measured by market breadth was neutral as 20 stocks advanced against 20 decliners. OANDO (+10.00%) led the gainer’s chart today, while LASACO (-9.49%) was the top loser.

Top gainers

  1. OANDO up 10.00% to close at N3.41
  2. ABCTRANS up 9.38% to close at N0.35
  3. JAPAULGOLD up 9.23% to close at N0.71
  4. ROYALEX up 8.70% to close at N0.25
  5. ACADEMY up 7.89% to close at N0.41

Top losers

  1. LASACO down 9.49% to close at N1.24
  2. CHIPLC down 8.33% to close at N0.33
  3. CORNERST down 7.81% to close at N0.59
  4. FLOURMILL down 6.94% to close at N28.85
  5. WAPIC down 6.90% to close at N0.54

Outlook

Nigerian bourse ended the third trading session of the week amid falling oil prices across the market spectrum. High buying pressures from medium capitalized stocks which include OANDO, JAPAULGOLD, ROYALEX lifted market sentiments across the spectrum.

  • Trailing, the Banking and Industrial indexes gained 0.77% and 0.22% respectively due to price appreciation in ACCESS (+1.80%), FIDELITY (+1.73%), and ZENITH (+1.13%).
  • Nairametrics, however, suggests cautious buying amid soft crude oil demand in play at the world’s largest economy.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Currencies

How rise in oil prices will impact exchange rate

Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

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Crude oil prices rebound ease investors’ concerns for Nigeria debt market, How substantial is compliance for the Oil market?, Crude Oil price soars high on new COVID-19 vaccine

Nigeria, Africa’s top oil producer and home to the second-largest reserves on the continent, is expected to benefit from the rise in oil prices in many ways.

Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

Historically, there has been a strong positive correlation between crude oil prices and the performance of the Nigerian economy. For example, when oil prices plummeted due to the COVID-19 outbreak and the implementation of lockdown protocols in 2020, the Nigerian government scaled down the budget to align better with the drop in crude oil price.

Now that there is a surge in oil price, we should expect that there would be an increase in government revenue translating to a stirring-up of aggregate demand.

READ: Nigeria records highest trade deficit since 1981

Why oil price is rising

The OPEC+ output restrains, despite the strong recovery of oil consumption, continues to give formidable fitting to bullish sentiments about soaring oil prices.

  • Oil prices are rising as optimism about a strong rebound in fuel demand in developed countries overshadows concerns of full lockdown to curb covid-19 in India.
  • Oil (BRENT) has seen a 34.3% increase Year to Date with the oil price at $69.34 showing an increase of +1.15% as of the time of writing this article.

What it means for the exchange rate

Perhaps the greatest benefit of the recent oil price rise is exchange rate stability. Since the crash in oil prices began in late 2019, Nigeria’s official currency has faced a barrage of sell pressure as local and foreign investors increase demand for the dollar.

This forced the central bank to curtain demand, implementing various forms of capital controls across the economy. With oil prices on the rise, Nigerians can begin to expect the following:

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  • An increase in government revenue, which also means higher dollar earnings and thus increased FX reserves. Nigeria’s FX reserve reportedly stands at $34.7 billion as of Tuesday, May 4th, 2021. Soaring oil prices strengthen the exchange rate and promote economic growth. This effect trickles down to higher reserves held by the CBN meant for stabilization of the currency.
  • Higher oil prices could also mean a more stable economy thus propelling economic growth. This, in turn, attracts foreign investor dollars or at least retains what we already have and reduces the pressure on demand.
  • Nigerians have intensified diversifying their currency holdings, keeping less of naira and holding more dollars as they hedge against depreciation. This has kept the pressure on the exchange rate over the last one and a half years. This trend could reverse if oil prices continue their steady rise.

READ: Dangote: Cement price from our factories is between N2,450 and N2,510 per bag, VAT inclusive

The implication? The parallel market exchange rate might appreciate closer to the NAFEX rate if this trend continues.

Hence, it is safe to presume that as the world resume business and travel activities, the demand for Black Gold will continue to increase, and with supply held steady by OPEC+ we can speculate that this is enough catalyst to relieve the pressure of FX demand and increase our foreign reserves thereby propelling growth.

However, the inclusivity of this growth may still be in question.

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Billionaire Watch

Top 5 women who became billionaires after divorcing their husbands

The divorce of Bill and Melinda Gates is set to mint another woman billionaire.

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Bill & Melinda Gates Foundation

The divorce of Bill and Melinda Gates is set to mint another woman billionaire. Yesterday, Nairametrics reported on the first set of transactions made by Bill Gates to his ex-wife, Melinda.

She was transferred securities worth over $1 billion, already making her a billionaire. With more transfers set to come, we want to look at 5 other women who became billionaires after divorcing their husbands.

5 .  Sue Ann Arnall ($1 billion  

Sue Ann Arnall was the wife of oil baron and CEO of Continental Resources, Mr Harold Hamm. The 26-year-old marriage ended in 2015 with a handwritten check of a whopping $974 million to Sue Ann, which she initially rejected on the basis that it was too small. After a series of back and forth in court, however, she finally accepted the cheque.

Before the cheque, Harold Hamm had initially paid her over $20 million, driving the total settlement figure over a billion dollars.

Harold Hamm is currently the 247th richest man in the world with a net worth of $8.6 billion.

READ: There are only 15 black billionaires in the world, here are the top 10

4.  Sue Gross ( $1.3 billion )

The ex-wife of Bill Gross, the billionaire founder of the investment management firm, PIMCO, walked away from her 32-year-old marriage to the business mogul with a handsome $1.3 billion dollars. She started her own charity afterwards.

Bill Gross is currently worth $1.5 billion according to Forbes. He founded PIMCO in 1971 and it became one of the most successful investment management firms in America.

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READ: Squarespace founder is the latest billionaire, set to make $3bn from listing his company

3.  Elaine Wynn ( $2 billion ) 

Elaine Wynn is the ex-wife of Steve Wynn and she is a Co-Founder of the successful casino company, Wynn Resorts. After the couple divorced in 2012, she was transferred 11 million shares from the company which was valued at $795 million at the time.

Her ex-husband sold a substantial amount of shares later that year, which she also got a stake in. Today, her total shares from the Wyatt Resorts are worth over $2.3 billion according to Forbes.

READ: Is Donald Trump still a billionaire?

2.  Melinda Gates ($1.8 billion and counting) 

Melinda Gates is the latest billionaire divorcee on the block and she is already worth $1.8 billion after the first transfer of wealth. Her ex-husband, Bill Gates is the 4th richest man in the world. She will be worth over $60 billion if Bill Gates’ fortune is split evenly with her, although that is very unlikely.

1.  Mackenzie Scott ($57.7 billion) 

The ex-wife of the richest man in the world tops the list with a staggering $57.7 billion net worth. She met her ex-husband, Jeff Bezos when they both worked at a hedge fund in New York and she helped set up Amazon.

After her divorce from Bezos in 2019, she received 4% of Amazon shares which was valued at $35 billion then. Amazon stocks have witnessed a near 75% increase since then. She is currently worth $57.7 billion according to Forbes.

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What you should know 

Melinda Gates may top the list after the complete transfer of wealth by her ex-husband, Bill Gates.

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