Investors gain N320bn as Guinness, others drive market’s new high
The Nigerian Stock Market recorded its first gain this week, rising by N320 billion, or 1.25 percent, as investors on the domestic bourse bought shares of Guinness Nigeria Plc, Eterna Plc, Meyer Plc, Japaul Gold Plc, and Coronation Insurance Plc.
At the close of the trading session on Wednesday, April 20, the Nigerian Exchange Limited (NGX) All Share Index (ASI) and market capitalisation rose from the preceding day’s lows of 47,545.86 points and N25.632 trillion to close at 48,138.71 points and N25.952 trillion respectively. A feat that saw it surpass its 52-week highest position.
The market’s year-to-date (YTD) positive return increased to 12.69 percent. Equity traders exchanged 349,560,578 units of shares worth N3.699 billion in 4,587 deals. Universal Insurance, Zenith Bank, Fidelity Bank, UBA, and Mutual Benefit generated most of the attention from sales as they were the most traded on the stock exchange.
Guinness Nigeria Plc gained the most on the Bourse, rising from N74.80 to N82.25, a gain of N7.45, or 9.96 percent, while Eterna Plc rose from N5 to N5.50, a gain of 50kobo, or 10%.
The shares of Japaul Gold Plc were also on the buy-side, causing the price to rise from 30kobo to 33kobo, up 3kobo or 10 percent. Others include Meyer Plc, which increased from N1.76 to N1.93, an increase of 17kobo or 9.66 percent, and Coronation Insurance Plc, which increased from a day-open low of 42kobo to 46kobo, an increase of 4kobo or 9.52 percent.
Unfortunately, UnionDicon ended up dominating the undesirable end of the market as investors’ sell-activity saw it lose 95 kobo, or 9.60 percent of its share value, to close trade at N8.95. Others were CWG, Johnholt, Regalins, and Sunuassur, which suffered losses of 9.28 percent, 8.97 percent, 8.57 percent, and 8.33 percent, respectively.
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Fed interest rate hike, Netflix poor performance failed to put Wall Street under
The talk of an interest rate rise by several Federal Reserve staff and the loss of 200,000 subscribers of Netflix failed to drag the entire US indexes down. As a result, the S&P 500 and Nasdaq fell 0.1 percent and 1.2 percent, respectively, to close at 4,459.45 bps and 13,453.07 bps, while the Dow Jones industrial average ended trading 0.7 percent higher, at 35,160.79 bps.
The mixed performance of the US stock market was not only due to the hawkish statement from the Fed reserve staff about interest rate hike, or down to Netflix’s loss of 200,000 subscribers, the first time it has suffered this loss since 2004, but also as a result of investors trying to get a grip on all the earnings reports from the big companies as they kick off their long weeks of earnings report season.
For instance, Procter & Gamble, which recorded one of its best sales return performances for the past 20 years, saw its earnings forecast beaten. A feat that saw it rise 4.03 basis points, or 2.52 percent, to close at $163.65, while IBM beat earnings and revenue estimates.
Once again, Netflix’s loss of 200,000 subscribers not only made it lose 40 percent of its market share value but also saw it take home the worst-performing stock in the S&P 500 this year.
Another big company of note was Baker Hughes, as the company failed to meet analyst forecasts.
Many market analysts believe that the Fed interest rate hike will play a major role in deciding the fate of the market this week.
South Africa’s Rand drops as floods, power cuts hit outlook
The recent flood crisis, which claimed the lives of over 448 people, power cuts as a result of the flood, and fears of a resurgence of COVID-19, pushed the South African rand to its lowest level in five months.
The unplanned flood crisis, which, according to the country’s ministry of environment, forestry and fisheries, is the deadliest natural disaster to hit the country in more than 50 years, has put doubt on the country’s ability to meet its economic target for this year.
Bloomberg reported that the rand fell by more than 2 percent on fears of a U.S. interest rate hike. A decision that has generated so much fear in the hearts of emerging markets.
Meanwhile, the country’s state power utility company, Eskom, has warned the country may unavoidably have more than 3 months of blackouts, especially for the areas affected by the flood.
In a response to bring relief to the people of KwaZulu Natal province, the province most hit by the flood, the ANC national government will plead for additional funding of 1 billion rand to repair infrastructure damaged by the flood.
It seems to many quarters that this unplanned plea for additional funding following the flood will dent the government’s objective of reducing its budget deficit and curbing government debt, a key factor preventing credit-rating upgrades.
There are also fears of a resurgence of the Omicron variant of the COVID-19 virus as cases of new infections increase.
The rand fell by 2.67% to 15.0456 to a dollar at the time of writing this report.
Tesla beats analysts’ sales, profit projection
Despite fears of supply-chain challenges, strong domestic demand for its electric vehicles pushed the first-quarter earnings result to a better than expected position for Tesla Inc.
The pioneer electric car manufacturer was not only the first major U.S. automaker to report its financial results, but beat analysts’ profit projection for the company.
The company believes that earnings could have been even higher if not for shortages of key components, which, according to an investigation, have affected not only the EV companies but also conventional car manufacturers worldwide.
According to Bloomberg, disruptions in the supply of semiconductors were a major factor that affected all electric vehicle (EV) manufacturers worldwide.
A letter explaining the current production woes was presented to shareholders “Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through the rest of 2022,” it stated.
Further investigation revealed that the Texas-based company not only posted strong gains in profit and revenue this quarter but that the sale of regulatory credits totaling $679 million helped the company achieve one of its best performances in terms of revenue yet.
An analyst who pleaded anonymity praised the result achieved by Tesla and looked critically at the sales of its regulatory credits, saying that that decision put the company’s rivals behind it.
The market responded excitedly to the news of the earnings report as its shares rose sharply by as much as 5.3% to peak at $1,028.87, only for them to close trade on the NYSE at $977.20, losing nearly 5% from their day-trade high position.
A critical examination of the profit projection showed that the company’s $3.22 a share exceeded analysts’ $2.27 a share. The revenue of the other exceeded analysts’ forecast by $900 million as it reported revenue earnings of $18.8 billion as against $17.9 billion.
The company said that the shutdown of production in Shanghai, China has affected its global production target due to the COVID-19 lockdown. It, however, believes that production will return to pre-locked down levels as partial production is resumed in its factory.
Russia warns U.S. Allies with its Nuclear-Capable ICBM weapon test-fire
In a move to show strength, President Vladimir Putin of Russia said that it test-fired a new intercontinental ballistic missile on Wednesday to cause a rethink in the hearts of the U.S. and its allies about attacking Russia.
According to Bloomberg, this move by Putin ups the ante since the war began in February. Following the destruction of the Russian carrier Moskva in the Black Sea by Ukrainian military officials, the war took a deadlier dimension as troops from Moscow staged a deadly offensive in Donbas, east of Ukraine.
The Russian leader, who has taken a more aggressive approach to win the Ukraine war, was seen watching the launch of the intercontinental ballistic missile on state television. He said, rather optimistically, “this unique weapon will strengthen the military potential of our armed forces, will reliably guarantee Russia’s security against outside threats and force those who, in the heat of frenzied aggressive rhetoric, try to threaten our country to think again.”
The missile, known as the Sarmat intercontinental ballistic missile, was fired from the Plesetsk cosmodrome in the northern Arkhangelsk region, the ministry of defence said.
This test launch followed Putin’s previous threats to use its nuclear warhead if any other country intervened in its war. According to him, intervention by other countries in the conflict would trigger “consequences you have never seen.”
Putin had hoped that his army would have taken over the country. He never anticipated the level of support the Ukrainian government would have gotten from the U.S. and European Union. The U.S. and the EU have helped Ukraine through its military supplies to contain the attacks of the Russian army, which is refocused on the east after failed efforts to capture the capital, Kyiv.
Despite reassurances from the minister of foreign affairs, Sergei Lavrov, questions to find out if Russia would use atomic weapons in the war were faintly provided as he said that Moscow was strongly against nuclear conflict.
His comment came after former Russian president Dmitry Medvedev threatened that the country was going to use nuclear missiles if Finland and Sweden joined NATO.
