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Markets

WEMA plunges as NSE Banking Index rises

At the close of the trading session today, banks posted profits as the NSE banking index gained (+0.41%) to settle at 348.28 index points.

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At the close of the trading session today, banks posted profits as the NSE banking index gained (+0.41%) to settle at 348.28 index points. This profit was less than the previous day’s (+2.19%). The NSE banking index started today’s trading session on a bullish note as predicted by market sentiments and experts. The market saw 6 gains, 3 stalemates, and 1 loss.

Wema Bank cancelled out some of its (+3.45%) gains to post a loss of (-1.72%) settling its price at N0.58 from the previous day’s N0.60.

After Access Bank saw an increase of (+ 1.90%) to put its price at N8.10, it then posted a stalemate to close at N8.05.

UBA also held a stalemate after its previous day gains of +0.72% holding its price at N7.00. Union Bank saw another stalemate putting its share price at N5.10 as opposed to the closing price of N4.90 held the previous day.

Ecobank broke out from its previous trading day stalemate to post significant gains of (+2.04), leading the gainers in the NSE Banking index. Ecobank’s share price increased to N5.00 from N4.90 held previously. Jaiz bank recovered slightly from the loss of -6.06% held at the previous trading session, posting a profit of (+1.61%) to put its price at 0.61 in today’s trading session.

Fidelity Bank reverted from its bearish momentum by posting a profit of (+0.81%) cancelling the previous day’s loss of -1.60% to put its price at N2.49, above the opening price of N2.46. Zenith Bank posted a profit of (+0.69%), supporting the profit of +3.81% held at the previous trading session, settling its price at N21.95 from N21.80.

Guarantee Trust Bank continued its bullish momentum to post a profit of +0.52% supporting the +0.68% held in the previous trading session to put its price at N28.80. Sterling Bank made a gain of +0.65% to settle its price at N1.59 from N1.56.

Outlook

  • Market sentiment trends bullish as 6 companies in the NSE Banking Index made 6 gains as opposed to 3 stalemates and 1 loss at the end of the trading session today.
  • Nairametrics counsels cautious participation in the market amid growing uncertainties in Nigeria.

Ubah,Jeremiah ifeanyi is a PhD candidate of Economics in Covenant university. He has held positions as the financial manager in Opera and is also a research ambassador in M&S research Hub. Ifeanyi is currently the financial market analyst for Nairametrics. Follow Ifeanyi on Twitter @ubahjc

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    Cryptocurrency

    Coin of the week: Ever heard of EOS?

    EOS is currently trading $11.33 with 936 million coins in circulation and a total supply of 1.02 billion.

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    EOS was created and designed to allow developers to build decentralized apps (DApps). DApps are any computer applications whose operation is maintained by a distributed network of computer nodes, as opposed to a single server.

    The EOS platform was developed by the company Block.one, to make it as straightforward as possible for programmers to embrace blockchain technology and ensure that the network is easier to use than rivals. It also aims to deliver greater levels of scalability than other blockchains which can only do a dozen transactions per second.

    EOS was created by Daniel Larimer and Brendan Blumer. Brenden Blumer is an entrepreneur, who was one of the co-founders of Okay.com, a digitally focused real estate agency in Hong Kong while Daniel Larimer is a software programmer who has also started a series of crypto ventures such as the crypto trading platform BitShares and the Steem blockchain. They are both members of Block.one’s executive team, with Brendan Blumer as CEO and Daniel Larimer as CTO.

    Why Invest in EOS?

    Block.one stated that EOS can accommodate the demands of thousands of DApps, even if they were being used by a high number of people. Parallel execution, as well as a modular approach, are said to drive this efficiency.

    EOS represents a truly democratic system that takes into account the will of the people, in this case, its token holders, as they can vote for block producers as well as other matters such as protocol upgrades.

    Network Security

    EOS, like many other coins, uses a delegated proof-of-stake consensus mechanism. This concept was conceived by Daniel Larimer and aims to solve some of the flaws that are seen in conventional PoW (Proof-of-Work) and PoS (Proof-of-Stake) systems.

    As stated earlier, those who own EOS tokens can vote for representatives who will be responsible for validating its transactions. One of the advantages is that it helps eliminate consolidation, where smaller miners are pushed out by those who have greater levels of computing power and resources.

    Price Analysis

    EOS is currently trading $11.33 with 936 million coins in circulation and a total supply of 1.02 billion. EOS has gained approximately 466% return comparing its 52 weeks low to its current price today. It is currently down 49.71% from its all-time high of $22.89 that was last traded on the 29th of April, 2018.

    Recently, after the Biden administration’s proposed tax hike, the coin dropped from its previous 2021 peek of $8.80 to a 0.236 Fibonacci retracement zone of $4.74, creating a new higher-low that indicates a bull market. No surprise that the market broke its previous 2021 high to create a new high of $13.18 on the 6th of May, 2021, following news of the coin proposing to increase its staking rewards. It is believed that this running will lead the coin to break its previous all-time high of 2018.

    Although it is not advisable to buy coins at peak prices, recent news as earlier mentioned, suggests that an increase in demand for the coin is imminent. Block.one mentioned that the protocol needs to increase the rate of inflation from its current pace of 1% to a rate between 1.2% and 3.8% intended to increase financial incentives for voters and block producers. While token holders still need to settle on what exact size the inflation rate will increase to, the possibility of higher yields for community participation has brought demand to the coin.

    A second major development for the protocol is the EOS PowerUp model, which intends to allow users to pay a fee to power up their account for 24-hours to transact on the network as opposed to paying a transaction fee for every transaction. Block.one mentions that the PowerUP model offers EOS token holders another way to earn a yield by depositing unused EOS tokens to receive a percentage of all the ‘power-up’ fees that are generated by the network. This has become an increasingly attractive option as investors are searching for ways to avoid the high gas fees (transaction fees) and network congestion on the Ethereum (ETH) network.

    With the overall cryptocurrency market bullish and projects like Litecoin (LTC) and Ethereum Classic (ETC) reaching new highs, EOS is a blockchain project that could benefit investors as the cryptocurrency bull market continues.

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    Commodities

    Lagos Commodities Exchange to start gold trading

    The move is in support of the Federal Government’s effort to reduce dependence on oil, diversify the economy and boost the country’s foreign exchange earnings.

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    Nigeria's first gold refinery to provide over 500,000 jobs

    The Lagos Commodities and Futures Exchange has concluded plans to commence trading of gold with the admission of Dukia Gold’s diversified financial instruments, backed by gold as the underlying asset.

    The move is in support of the Federal Government’s effort to reduce dependence on oil, diversify the economy and boost the country’s foreign exchange earnings.

    Dukia Gold said the financial instruments, which would be in form of exchange-traded notes, commercial papers and other gold-backed securities would enable the company to deepen the commodities market in Nigeria, increase capacity, generate foreign exchange for the government to diversify external reserves and create jobs across the metal production value chain.

    While making the disclosure, during a Pre-Listing media interactive session in Lagos on Thursday, the Chairman of Dukia Gold, Mr Tunde Fagbemi, applauded the Ministry of Mines and Steel Development and the Security and Exchange Commission (SEC) for supporting trading of gold in Nigeria.

    What the Chairman of Dukia Gold is saying

    He said, “We are proud to be the first gold company whose products would be listed on the Lagos Futures and Commodities Exchange. The listing shall enable us to facilitate our infrastructure development, expand capacity and create fungible products.

    This has the potential to shore up Nigeria’s foreign reserve and create an alternative window for the preservation of pension funds. Gold-backed security is a hedge against inflation and convenient preservation of capital.”

    Fagbemi pointed out that the company has refinery services to smelt metals with the capacity to meet local and international demand.

    Going further, he said, “As a global player, we comply with the practices and procedures of London Bullion Market Association and many other international bodies. Our refinery will also have multiplier effects on the development of rural areas anywhere it is located.’’

    Hotflex

    What you should know

    It can be recalled that the Federal Government, in June 2020, commissioned the operations of Dukia Gold and Precious Metals Project (DGPMP). The project is expected to enable Nigeria to mine its gold reserves properly, trade responsibly and refine locally.

    The Vice President, Prof. Yemi Osinbajo, while performing the virtual commissioning of the project, said Nigeria has potential reserves of 200 million ounces of gold reserves.

    Osinbajo said that he believed that the Dukia gold project would encourage the emergence of smaller-scale mining companies which, for the first time, would have a transparent and welcoming market for their mined gold and precious metals.

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