Trading Tuesday
Ranora Daily - Your daily source for reliable market analysis and news.
Market Data
Local
Global
*Data as of 4pm WAT
Market News
Local
Customs Opens 90-Day Window For Vehicle Import Duty Regularisation - Daily Trust
The Nigeria Customs Service (NCS) has announced the introduction of a 90-day window to facilitate the regularisation of import duties on specific vehicle categories. According to a statement by Abdullahi Maiwada, NCS PRO, issued on Sunday, the initiative aims to enhance compliance and simplify import processes, based on the directive of the minister of Finance and Coordinating Minister of Economy, Wale Edun.
Airtel Africa buys back 491,861 shares from Citigroup Global Markets - Business Day
Airtel Africa Plc has purchased 491,861 units of its ordinary shares of USD 0.50 each on the London Stock Exchange from Citigroup Global Markets Limited pursuant to the authority granted by its shareholders as part of its share buy-back programme. Details of the transaction were announced on March 1, 2024. Lowest price paid per share was (GBp): 96.10 while highest price paid per share (GBp): 97.65. Volume weighted average price paid (GBp): 97.14.
Banks increase lending rates after CBN’s jumbo MPR hike - Business Day
Nigerian banks have started increasing their lending rates following the record hike in the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN), in a development that will see businesses and individuals with existing loan facilities with the banks pay more to service those loans. Zenith Bank, the country’s largest bank by market capitalisation, raised its interest rate by 500 basis points to 30 percent from 25 percent. The review takes effect from March 12, 2024.
IWD: FG set to commence disbursement of $100m World Bank funds to Nigerian women - BNR
Minister of Women Affairs, Barrister Uju Kennedy-Ohanenye has said that the Government is set to commence the disbursement of the $100m World Bank funded women project in Nigeria as part of activities marking the 2024 International Women’s Day celebration. She made this known at a media briefing announcing the line-up of activities in Abuja.
Global
Reddit’s Meme Stock Forum Users Threaten to Bet Against Its IPO - Bloomberg
Reddit Inc.’s stock-trading enthusiasts made it a household name by backing companies that Wall Street wouldn’t. For Reddit’s own initial public offering, a group of them are about to flip the script. In the days after the social-media company filed for an IPO, thousands of members of the WallStreetBets forum — which boasts around 15 million users and helped popularize meme stocks like GameStop Corp. — voted to boost a forum post about shorting the company, a sharp reversal of their typically bullish ways.
Corporate junk debt defaults hit post-pandemic high in February - Reuters
Defaults among U.S. corporate junk debt issuers reached a post-pandemic high in February, JPMorgan said in a new research report.
Afreximbank tops loan market rankings in Bloomberg’s 2023 Capital Markets tables for Sub-Saharan Africa - BNR
African Export-Import Bank (Afreximbank) has been ranked number one in all three categories in the Bloomberg Capital Markets League Tables Report for African Capital Markets. Afreximbank is ranked as number one Mandated Lead Arranger, Bookrunner, and Administrative Agent for Sub-Saharan Africa Borrower Loans.
Market Commentary:
Currencies/Macro:
The US dollar experienced minimal fluctuations against the currencies of the G10 group, with net changes varying from -0.4% to +0.3%. The EUR/USD increased by 0.2% to 1.0855, and the GBP/USD climbed by 0.3% to 1.2690. The USD/JPY moved upward by 40 pips to 150.50, tracking the slight rise in US Treasury yields.
In the Eurozone, investor sentiment, as measured by the Sentix index, improved to -10.5 in March, slightly better than the -10.6 forecast and a marked increase from the previous -12.9. This improvement was noted in both the current situation and expectations components.
Atlanta Federal Reserve President Raphael Bostic discussed his outlook on interest rate policies, indicating he anticipates the first rate cut to occur in the third quarter, with a subsequent pause for evaluation. He suggested that consecutive rate cuts are unlikely due to prevailing uncertainties and emphasized the value of observing how different economic actors respond to policy adjustments. Regarding quantitative tightening (QT), the strategy of selling bonds acquired through quantitative easing, Bostic expressed hope that the current pace could be maintained for an extended period. He advocated for a gradual return to more standard monetary policy practices as the need for emergency measures recedes.
Interest Rates:
The yield on the US 2-year Treasury note increased from 4.53% to 4.60%, and the 10-year yield rose from 4.18% to 4.22%. Market expectations for the Federal Reserve's funds rate, set at 5.375%, remain steady for the upcoming 20 March meeting, with a 70% probability of an interest rate cut by June.
In the credit markets, there was notable outperformance, with both the Main and CDX indices improving by a basis point to 54 and 50.5, respectively. U.S. investment-grade (IG) cash credit also showed tightening, improving by 1-3 basis points as the week started with strong primary market activity. In Europe, 10 issuers successfully priced a total of EUR 12.1 billion, while in the U.S., 12 issuers priced USD 16 billion, reflecting a robust demand and supply dynamic in the credit markets.
Commodities:
Crude oil markets experienced some profit-taking, with participants shifting their focus to increasing production levels. The April West Texas Intermediate (WTI) contract declined by 1.5% to $78.78, while the May Brent contract decreased by 0.87% to $82.82. A Bloomberg survey highlighted that OPEC's oil production rose last month due to the restart of Libya’s Sharara oilfield and additional production from Iraq and the UAE, which exceeded their early-year quotas by around 400 thousand barrels per day (kbpd). Iraq is considering budget adjustments to facilitate payments for recovery and transit fees to international oil firms, aiming to reopen the Ceyhan pipeline, closed since March 2023. This pipeline, with a 400-500 kbpd capacity, has caused Iraq to lose over $7 billion in revenue in the past year. The New York gasoline contract has seen a 12% increase over the previous week due to tightened supply from the BP Whiting refinery's emergency shutdown on February 1. Although operations were slated to resume by March 1, BP announced a continued phased restart last Friday.
In the metals market, outcomes were mixed as a significant increase in Chinese inventory levels tempered price rises. Copper edged up by 0.25% to $8,525, and nickel increased by 1.35% to $17,900, reaching its highest closing value since early November. The surge in Chinese inventories is being offset by a decrease in London Metal Exchange (LME) stocks, particularly driven by European withdrawals, with LME copper stocks dropping to their lowest since September.
Iron ore exhibited some buying interest at the $115 level in anticipation of China’s National People’s Congress, which begins today. The April Singapore Exchange (SGX) contract rose by $1.40 to $115.60, and the 62% Mysteel index increased by $1.65 to $117.35.
Investment Tip of The Day
Monitor and manage your debt strategically to ensure it does not hinder your wealth accumulation. Use debt wisely to leverage investment opportunities when appropriate, but avoid high-interest debt that can erode your financial resources. Effective debt management is crucial for maintaining a healthy balance sheet and facilitating wealth growth.