Okomu, Presco, others cause market’s 50,000 points cross
Nigeria’s stock market benchmark performance index crossed 50,000 points on Wednesday May 4, the first trading day of the week after the public holiday as investors bought shares of Okomu Oil Palm Plc, Presco Plc, Wema Bank Plc, Nigerian Breweries Plc, and Eterna Plc. The market’s positive return year-to-date (YtD) has increased to 17.35percent.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation increased from preceding day’s lows of 49,638.94 points and N26.761trillion respectively to 50,126.41 points and N27.023trillion, up by 0.98percent and N262billion.
Okomu Oil Palm led the league of advancers after its share price moved up from N147 to N161.70, up N14.70 or 10percent, followed by Presco which increased from N143.40 to N157.70, adding N14.30 or 9.97percent.
Wema Bank also rose from N3.50 to N3.85, up by 35kobo or 10percent, Nigerian Breweries increased from N57.10 to N62.80, adding N5.70 or 9.98percent, while Eterna Plc rose from a low of N6.02 to N6.62, adding 60kobo or 9.97percent.
“We expect the positive sentiment that has prevailed in the market in the last couple of weeks to persist. In our opinion, the positive corporate performance in first-quarter (Q1) 2022 should spur buying interest. Furthermore, tickers across sectors still have significant upside, which could stimulate bargain hunting activities,” Lagos-based Meristem research analysts said.
Though, the analysts noted a possibility of profit taking on tickers that have gained appreciably during the past weeks, especially on bellwether stocks, they however think that the positive factors would be dominant.
“Hence, we expect the market to close in the positive region this week,” Meristem research analysts added.
In 7,251 deals, investors exchanged 669,299,199 units valued at N5.988billion. Union Bank, Transcorp, AIICO, Chams, and Access Holdings were most traded stocks on Wednesday.
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Burundi says 10 of its peacekeepers killed in Somalia attack
An attack carried out on Wednesday on an African Union (AU) military base claimed the lives of 10 Burundi peacekeepers, with several others killed and injured.
According to Reuters, Floribert Biyereke, spokeperson for the Burundi army, in an interview on state television said that, in addition to the 10 killed, 25 other soldiers sustained several degrees of injuries from the raid on a camp near the village of El Baraf in central Somalia, while 20 “al-Shabaab terrorists” were also killed.
He informed the press that several follow-up operations were going on after al-Shabaab, which is affiliated with al-Qaeda, attacked its AU military base on Tuesday. The death toll was still unknown, even though “dozens” of soldiers were killed and about 20 people were taken to the hospital with injuries.
These figures have yet to be independently confirmed by the AU, as the AU and contributing countries such as Burundi, Uganda, Kenya, and Ethiopia do not usually comment on casualties from attacks.
The war-torn country of Somalia is preparing to hold its first presidential election this month after more than five years of delay. Unfortunately, political uncertainties created by political parties provided the opportunity for al-Shabaab to attack the AU camp.
Reuters said that “the attack is unlikely to cause any withdrawals from the peacekeeping mission.”
Since the AU arrived in Somalia in 2007, its peacekeeping troops have been involved in many bloody battles with the al-Shabaab militant group.
Al Shabaab is a notorious militant group affiliated with the infamous Al Qaeda and has carried out several deadly attacks not just in Somalia but also in Kenya and Uganda, killing several hundred in the process.
In a video not yet authenticated by Reuters, several lifeless bodies of soldiers who looked like AU soldiers littered a military base, about 130km from the capital Mogadishu. One soldier appeared to have been beheaded.
Fed increases interest rates as Powell signals similar moves ahead
After accessing the negative impact, that COVID-19 had on the US economy, where interest rates were pegged at zero, the Federal Reserve released its biggest interest-rate increase since 2000.
The Fed believes it will continue to raise interest rates in the coming meetings, thereby projecting its most aggressive monetary policy action to address rising inflation, which is at 8 percent, the highest in 40 years.
According to Bloomberg, the policy-making body of the Federal Reserve, the Federal Open Market Committee (FOMC), on Wednesday voted to increase the interest rate by half a percentage point.
The FOMC said that in a couple of months, its holdings of mortgage-backed securities and treasuries would start to decline in June, at an initial monthly pace of $47.5 billion, until they reach $95 billion within the next three months.
“Inflation is much too high and we understand the hardship it is causing, and we are moving expeditiously to bring it back down,” Chair Jerome Powell said. He reaffirmed the belief that an additional 50 basis point increase would be on the horizon for the next couple of meetings.
The Fed Chair’s statement drove the stock market to react bullishly following its first meeting in a decade. A meeting in which he dashed analysts’ expectations of an even larger increase of 75 basis points in the coming months
Powell’s remarks ignited the strongest stock-market rally on the day of a Fed meeting in a decade, as he dashed speculation that the Fed was weighing an even larger increase of 75 basis points in the months ahead, saying that it was “not something that the committee is actively considering.”
Wall street rally gains strength following Fed 50bps rate hike
The Fed’s 50-basis point rate hike impacted greatly on the market as the Dow Jones gained over 900 points, while the S&P 500 and the Nasdaq advanced further by 3 percent and 3.2 percent, respectively.
The interest rate hike by the Fed is seen as the sharpest in 22 years, regardless of Fed Chair Jerome Powell’s ruling out the possibility of larger rate hikes during its concluded conference.
“The Fed raised the target for the fed funds to 0.75 percent and 1 percent, and indicated that it would begin reducing asset holdings on its $9 trillion balance sheet to tame inflation rising at the fastest pace in 40 years,” the tradingeconomics view was stated.
Many had feared that the Fed was going to continue its interest rate hike. However, Powell promised that, against many thoughts in the public space, the Fed wasn’t considering a 75bps rate hike in June, easing expectations that the Fed would take a more aggressive monetary policy approach to tackle soaring inflation.
Romgaz takeover ExxonMobil Romanian asset for $1b
ExxonMobil, the world’s largest oil company, has entered into an agreement to sell its Romanian upstream subsidiary, ExxonMobil Exploration and Production Romania, to Romgaz for more than $1 billion, pending Romanian government clearance.
According to Rigzone, the transaction, which is expected to be completed by the second quarter of 2022, comprises all of ExxonMobil Exploration and Production Romania’s shares, as well as a stake in the XIX Neptun Block off the coast of Romania.
Details of the sale reveal that there will be a transfer of the block’s operatorship to OMV Petrom, while staff of its Romanian affiliate will be included in the deal. Apparently, Exxon and OMV Petrom both own 50 percent of the company’s shares. The block is around 2,900 square miles in size, with sea depths ranging from 330 to 5,580 feet.
Liam Mallon, president of ExxonMobil Upstream Company, said, “ExxonMobil continues to evaluate our portfolio of opportunities, focusing our investments in advantaged assets with a low cost of supply.”
“Our investments to date have positioned the Neptun Deep project for future success with the potential to help increase resource production within Romania and the European Union.”
ExxonMobil has had an interest in Romania’s upstream sector since November 2008, when it purchased a stake in the deepwater Neptun Deep block in the Black Sea.
The buyout of Exxon’s Romanian unit has been in the works for some time, with Romgaz submitting its initial proposal in March of last year.
This move by ExxonMobil is seen as its long-term strategy to exit the hydrocarbon business and divest into cleaner energy. The company also sold its onshore assets in Nigeria to Seplat early this year.
