Money Monday
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*Data as of 4pm WAT
Market News
Local
Nigeria’s rig count rises 61% to 29 - Vanguard
Nigeria's rig count has increased by 61% to 29 rigs as investors respond to the new Petroleum Industry Act (PIA) and other developments in the country's energy sector. The increase in rig count signals growing interest and activity in Nigeria's oil and gas industry, driven by regulatory changes and investment opportunities created by the PIA and other initiatives.
Power transmission capacity now 8,500MW – FG - Punch
The Nigerian Federal Government has announced an increase in the country's power transmission capacity to 8,500 megawatts (MW). This development signifies progress in enhancing Nigeria's electricity transmission infrastructure. It's a step toward improving the reliability and stability of the power supply in the country, a long-standing issue that has hindered growth.
Oando Plc – Adjournment of hearing on Scheme of Arrangement - Oanda
Oando PLC has announced that the Federal High Court in Lagos, Nigeria, has extended the hearing of a petition filed by 14 shareholders of the company to November 28, 2023. The extension aims to allow Oando to provide a further report on compliance with a court order issued on June 7, 2022.
FG to adhere to statutory limits of CBN’s Ways&Means - The Sun
The Nigerian Federal Government has pledged to follow statutory limits when seeking budget support from the Central Bank through Ways and Means Advances and is in discussions with the World Bank for a $1.5 billion loan. The Central Bank is exploring control options to enforce these limits for fiscal policy management.
Global
Oil dips below $90 a barrel as US agrees Venezuela deal - Reuters
Oil futures dropped as reports emerged of a U.S.-Venezuela deal to ease sanctions on Venezuela's oil industry, potentially increasing oil supply. Brent futures fell 1.19% to $89.81 a barrel, and U.S. WTI crude dropped 1.22% to $86.62 a barrel. However, geopolitical concerns over the Israel-Hamas conflict still loomed, with investors contemplating its impact on oil prices.
Dow rallies more than 350 points as optimism over earnings outweighs higher rates - CNBC
Stocks saw a rally as investors looked forward to upcoming corporate earnings reports despite a rise in Treasury yields. The Dow Jones Industrial Average surged 1.2%, with the S&P 500 and Nasdaq Composite both posting similar gains. Leading the Dow were companies like Nike, Intel, and Travelers, each with over 2% increases.
Weekly Investment Watchlist
Market Commentary:
Asia and Australia:
Asian equities ended lower across the region on Monday. China’s tech shares were among the worst performers, leading to declines in Shenzhen and Hang Seng. Seoul and Taipei also saw sharp losses, and Australia was down, with New Zealand underperforming. Japan closed near its daily lows, and Southeast Asia finished lower, with India a few points down.
The People’s Bank of China (PBOC) conducted medium-term lending facility (MLF) operations worth 789 billion yuan ($107.96 billion) to maintain adequate liquidity in the banking system. With 500 billion yuan worth of MLF loans maturing, the PBOC injected 289 billion yuan of fresh liquidity into the banking system, marking the largest such net injection in nearly three years. The PBOC also kept the rate on the one-year policy loans unchanged at 2.50%. While these developments may seem positive in terms of stimulus, the market appeared to shrug them off, as the PBOC is essentially replacing liquidity in the system.
Japan’s Finance Minister Suzuki told G20 peers that Tokyo may need to take “appropriate action” in the exchange-rate market, considering that global monetary tightening could heighten currency volatility. Such intervention could bring temporary relief for the Japanese Yen, but the dominant market driver remains interest rates.
South Korea extended its tax cut on fuel consumption through the year-end due to growing inflationary pressures.
New Zealand elected a center-right government to manage economic challenges in the aftermath of the pandemic.
Europe, Middle East, Africa:
European equity markets closed higher, with basic resources, banks, and oil/gas sectors leading gains. Healthcare, technology, and industrial/goods and services lagged. The banking sector was stronger, with the upside supported by some bargain hunting ahead of the Q3 reporting season. Ongoing commentary about the sector benefiting from a “higher for longer” rate regime was also a factor.
Miners led the way in EU trade, benefiting from higher metals prices as the PBOC injected CNY789 billion in new MLF funding, marking the biggest such injection since 2020, while keeping the rate unchanged at 2.50%.
In a Bloomberg poll of economists, the majority expected the European Central Bank (ECB) to leave rates on hold until September 2024. Dovish comments from ECB members the previous week played a role in pushing rates down and providing some relief in equities early last week. However, the situation reversed as news of the war escalated. Rates are higher across the curve in Europe and Germany.
This week brings UK employment and inflation data ahead of the November 2 BoE meeting. Ahead of the data, UK rate expectations continued to retreat as recent inflation figures came in well below expectations. Analysts anticipate no further BoE hikes, especially if this week’s data continues to show progress on disinflation.
The Americas:
The Bank of Canada governor stated that interest rate hikes are still possible, given geopolitical tensions and core inflation remaining stubborn. They do not expect “higher for longer” to cause a recession.
Major U.S. pharmacy chain Rite Aid filed for bankruptcy on Sunday and obtained $3.45 billion in fresh financing as part of its restructuring plan while dealing with falling sales and opioid-related lawsuits.
Another round of Fed speakers is expected this week, adding to the geopolitical uncertainty, and earnings season is in full swing. The market remains on alert for another potentially choppy week ahead.
The Week Ahead:
Monday:
Empire State Manufacturing Index (US)
Tuesday:
Retail Sales m/m (US)
Wednesday:
CPI y/y (UK)
Thursday:
Unemployment Claims (US)
Friday:
Retail Sales m/m (UK)
Investment Tip of The Day
Assess Economic Regimes: Different economic regimes, such as inflationary or deflationary environments, can impact various assets differently. Understand these economic dynamics and tailor your portfolio accordingly.
Meme of the Day
