Trading Tuesday
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*Data as of 5pm WAT
Market News
Local
Labour mobilises for protest, tanker drivers strike triggers fuel queues - Punch
The organised Labour on Monday began mobilising its members for a nationwide protest slated for February 27 and 28 over the cost of living crisis in the country. Sources in the leadership of the Nigeria Labour Congress told our correspondents that the National Executive Council met via Zoom on Friday, February 16, to review the resolution of the National Action Council of the
Foreign loans make up 59% of $4bn capital importation (NBS) - Punch
No less than 59.1 per cent of capital importation into the country in 2023, amounting to $2.31bn, was foreign loans, according to the latest capital importation report released by the National Bureau of Statistics. According to the report, foreign capital inflow rose from $654.65m in Q3 2023 to $1.09bn in the final quarter of the year.
EU Plans €37m Investment in Nigeria’s Power Sector - This Day
The European Union (EU) is set to invest €37 million in the power sector in Nigeria, in addition to the about €200 million grants it has invested in the sector since 2008. This disclosure was made by the EU ambassador to Nigeria, Samuela Isopi, during a visit to the Minister of Power, Chief Adebayo Adelabu.
She was accompanied by the new Head of Cooperation of the EU, Mr. De Luca Massimo and the Programme Manager on Energy, Mr. Godfrey Ogbemudia.
Senate asks FIRS to suspend N17tn tax waivers - Punch
The Senate through its Committee on Finance on Monday frowned at the N17tn loss incurred by the country on tax waivers within the last five years.
It consequently urged the Federal Inland Revenue Service to suspend the tax waivers being largely abused and substitute it with a rebating system. The Senate’s objection to the allegedly abused tax waivers came to the fore during the 2024 budget presentation of FIRS to its committee on Finance.
Youth unemployment in Nigeria rises higher 8.6% in Q3 2023—NBS - BNR
National Bureau of Statistics NBS, has said that in the third quarter of 2023, the unemployment rate significantly surged to 5.0% from 4.2% in the previous quarter, indicating a marked increase, with disparities evident across genders, geographical locations, and educational backgrounds in Nigeria. NBS report said “Specifically, unemployment was higher among women at 6.0 per cent compared to men at 4.0 per cent.
Global
Africa’s economic growth slows, but recovery expected in 2024: AfDB - Zawya
Africa’s economic growth dipped to 3.2% in 2023, falling short of the 4.1% recorded in 2022, the African Development Bank (AfDB) reported. Despite the slowdown, the bank projected a return to faster growth for most regions in 2024, with the exception of Central Africa.
BP plans to inject $1.5bln in new investments for development, exploration activities in Egypt - Zawya
The BP’s CEO said the company plans to inject up to USD1.5 billion in exploration activities in Egypt within the next years, with the potential of pumping further investments worth nearly USD5 billion.
PPI Inflation Comes in Hotter Than Forecast - WSJ
Another inflation gauge is in the spotlight, following Tuesday's stronger-than-expected consumer-price index. The producer price index, which is just out, rose slightly more than expected in January. The update weighed on stock futures and pushed benchmark bond yields above 4.3%.
Tech Leaders Fled San Francisco During the Pandemic. Now, They’re Coming Back - WSJ
In 2020, venture capitalist Keith Rabois urged startup founders to join him in ditching San Francisco for Miami, touting the city’s relative safety, lower taxes and tech-friendly mayor. The self-proclaimed contrarian investor, who made a fortune backing companies such as Airbnb and DoorDash, once tweeted that San Francisco was “miserable on every dimension.”
Elon Musk says first Neuralink patient can control a computer mouse through thinking - CNBC
A patient implanted with Neuralink’s brain technology can now control a computer mouse just by thinking, the company’s founder Elon Musk said.
The billionaire’s startup says it has developed a brain implant to help humans use their neural signals to control external technologies.
Musk, who is also the CEO of Tesla, said Neuralink is trying to get “as many button presses as possible from thinking” from the patient.
Markets Start to Speculate If the Next Fed Move Is Up, Not Down - Bloomberg
Investors are beginning to war-game how the Federal Reserve can manage a US economy that just won’t land, with some even debating whether interest-rate hikes will be needed only weeks after a steady run of reductions appeared all but certain. Bets on lower rates coming soon were so prevalent a few weeks ago that Fed Chair Jerome Powell publicly cautioned that policymakers were unlikely to be in position to cut as of March.
Market Commentary:
Currencies/Macro:
The US dollar remained relatively stable against the major currencies throughout the day. The EUR/USD pair did not see significant movement, staying at 1.0780. Similarly, the GBP/USD pair was almost unchanged, hovering around 1.2595. The USD/JPY pair also experienced minimal fluctuation, maintaining a position at 150.15 with little overall change.
Interest Rates:
While the US cash treasury market was closed for Presidents Day, futures trading suggested a slight increase in the implied 10-year yield from 4.28% to 4.31%. Market expectations for the Federal Reserve's funds rate, set at 5.375%, remain steady for the upcoming March meeting, with a 95% likelihood of a rate reduction by June.
In Europe, rates markets showed minimal movement, with both Bund and Gilt yields staying within a basis point of Friday's closing. The Euro credit markets remained stable, with the Main index steady at 56 and secondary cash markets quiet. Despite the US market holiday, primary market activities continued in Europe, where four issuers successfully priced a total of EUR 3.3 billion.
Commodities:
Crude oil market activity was subdued due to the US holiday, yet prices remained near three-month highs amid escalating geopolitical tensions. The March West Texas Intermediate (WTI) contract saw a slight increase of 10 cents to $79.29, whereas the April Brent contract decreased by 17 cents to $83.31. The attack on the Rubymar by Houthi missiles, which forced its crew to abandon ship, contributed to the upward pressure on prices. This incident was part of a series of attacks on foreign vessels within a 24-hour period. Additionally, Centcom reported destroying an "unmanned underwater vessel" during strikes on Saturday.
In political developments, the Israeli cabinet rejected calls for a permanent settlement with the Palestinians. Bloomberg reported that diesel shipments from India to Europe have dropped to their lowest since 2022 due to Houthi attacks, with no diesel imports into the EU in the first two weeks of February, as per Vortexa data, while deliveries to Asian destinations have increased.
In metals, trading was muted in light of the US holiday, with sentiment dampened by post-Lunar New Year trading disappointment in China. Copper fell by 0.7% to $8,427, and aluminium decreased by 0.9% to $2,197, though zinc rose by 0.9% to $2,406. In industry news, Glencore-backed Horizonte Minerals announced the need for a new financing package to restart a nickel project in northern Brazil, facing costs 87% higher than initially estimated. Egypt is reportedly in talks with the UAE to establish a new aluminium plant with a capacity of 600k tons per year on the Red Sea, with construction estimated to take 18-24 months and initial costs around $3 billion. BHP is set to report earnings and has indicated potential closures of its nickel operations in Western Australia.
Iron ore prices significantly declined, erasing gains from the Lunar New Year reopening in China. The March Singapore Exchange (SGX) contract fell by $4.50 to $126.10, and the 62% Mysteel index dropped by $2.85 to $128.10. This decrease occurred despite reports of local governments in China pledging to boost the economy in Q1 and a more than 70% year-over-year increase in existing home sales in 50 key cities, according to Beike Research Institute data reported in the Securities Times.
Investment Tip of The Day
Stay informed about global economic trends and their potential impact on investments. Understanding these dynamics can help you make proactive adjustments to your portfolio, potentially seizing opportunities or mitigating risks before they affect your wealth. It's a strategy that complements active portfolio management and informed decision-making.