Wealth Wednesday
Ranora Daily - Your daily source for reliable market analysis and news.
Market Data
Local
Global
*Data as of 4pm WAT
Market News
Local
Dangote refinery imports crude as NNPCL swaps oil for loans - Punch
Dangote Refinery, owned by Africa's richest man, Aliko Dangote, has reportedly resorted to importing crude oil as the Nigerian National Petroleum Corporation (NNPC) swaps oil for loans with international companies. This unusual arrangement comes as NNPC struggles with mounting debt, and Dangote Refinery aims to ensure a stable supply of crude for its operations.
National grid collapses again,electricity drops to 42.7MW - BNR
The Nigerian national power grid has experienced another collapse, leading to widespread power outages across the country. This latest incident marks a continuation of the ongoing challenges faced by Nigeria's power sector, characterized by frequent grid failures, inadequate generation capacity, and an unreliable power supply
FG opens old international terminal to ease flight disruptions - Punch
The Nigerian federal government has reopened the old international terminal at the Murtala Muhammed International Airport in Lagos to alleviate flight disruptions caused by ongoing construction work at the main terminal. This move aims to enhance passenger comfort and reduce congestion during the renovation project, which is expected to last for 18 months.
Global
The US national debt hit $33T for the first time - CNBC
The U.S. national debt has surpassed $33 trillion, driven by increased federal spending, pandemic-related stimulus, and tax cuts. Congress is at an impasse over a spending bill, with Republicans advocating for reduced spending and Democrats supporting President Biden's initiatives.
Weekly Investment Watchlist
Market Commentary:
Asia and Australia:
Asian equities mostly closed lower in a risk-off trading session. Hong Kong managed to hold on to its recent support level but still ended lower, along with mainland China markets. South Korea closed slightly higher, while other major benchmarks, including Taiwan and India, saw declines. Southeast Asian markets also showed weakness. Japan dipped sharply into the close, challenging its 33,000 support level.
China’s Loan Prime Rates (LPRs) remained unchanged at 3.45% for 1-year and 4.20% for 5-year terms. This suggests that China is not opting for rate cuts to stimulate the economy at this time.
Chinese companies are set to pay out record dividends this year as they aim to boost confidence amid market turbulence. Dividends paid by CSI300 companies have exceeded CNY 1.5 trillion ($206 billion) year-to-date, surpassing the total for 2022 and causing index dividend yields to exceed 10-year sovereign bond yields for the first time.
Local Government Funding Vehicle (LGFV) domestic bond issuance in China reached nearly CNY 620 billion ($85 billion) in August, marking an almost 50% increase from July and the third-highest monthly total on record. While some of these bonds needed refinancing due to maturities, investors still view these bonds as relatively safe. However, most of the bonds issued had short-term maturities, possibly contributing to their appeal.
Europe, Middle East, Africa:
European equity markets showed gains, with the FTSE 100 outperforming. This was attributed to a softer UK inflation update. UK housing stocks benefited from increased expectations that the Bank of England (BoE) would end its rate hike cycle.
German producer prices (PPI) recorded the largest YoY fall on record in August, declining by -12.6%, in line with expectations. July’s figures fell by -6%. These numbers are likely to affect inflation calculations.
Ahead of the Bank of England (BoE) meeting this week, analysts at Bank of America (BofA) suggest that GBP/USD may remain under pressure. They cite the BoE’s tightening stance, which could undermine the UK’s weak but resilient growth. Additionally, stale long positioning from investors and hedge funds contributes to the pressure.
The Americas:
Auto parts makers face the potential risk of losing $38 billion in revenues if UAW strikes are extended. Negotiations are critical, and Friday will be a key day for developments.
Disney plans to almost double its investment in theme parks to $60 billion over the next 10 years. This strategy comes at a time when their streaming business may require more focus.
Bond Market Volatility, as measured by the MOVE Index, has reached its lowest levels since the Fed started hiking interest rates. If the Fed pauses its rate hikes, there could be a mild pullback in longer-term yields. However, if the Fed’s message is hawkish, and inflation remains a central concern, the entire yield curve could move higher. The low volatility is noteworthy and, in a way, concerning.
The Week Ahead:
Monday:
Tuesday:
Harmonized Index of Consumer Prices (MoM) (EA)
Wednesday:
PBoC Interest Rate Decision (CN)
UK Consumer Price Index YoY is at 6.80%, compared to 7.90% last month and 10.10% last year.
Fed Interest Rate Decision (US)
FOMC Press Conference (US)
Thursday:
Bank of England Minutes (GB)
Initial Jobless Claims (US)
Existing Home Sales Change (MoM) (US)
Friday:
GfK Consumer Confidence (GB)
Retail Sales (MoM) (GB)
HCOB Composite PMI (EA)
S&P Global Services PMI (US)
Investment Tip of The Day
Stay Cautious of Leverage: Be cautious when using leverage to amplify your investments. While leverage can magnify gains, it also increases the potential for losses. Assess the risks carefully and only use leverage if you fully understand its implications.
Meme of the Day
