Presco, others drive stock market’s negative start to new week
Nigeria’s stock market opened this week on a negative note, after declining by 0.58percent or N168billion on Monday. The record dip pushed lower market’s positive return this year and this month to 25.88percent and 8.33percent respectively.
No thanks to stocks like Presco which led others that topped the laggards league. Presco share price dipped by N18, from day-open high N180 to N162, down by 10percent.
It was followed by May & Baker which decreased from N4.34 to N4.01, shedding 33kobo or 7.60percent; Wema Bank which was down from N3.65 to N3.40, losing 25kobo or 6.85percent; and University Press which decreased from N2.85 to N2.60, shedding 25kobo or 8.77percent.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation decreased from 54,085.3 points and N29.157trillion respectively to 53,772.14 points and N28.989trillion.
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Government’s debt to banking sector rises by 17.7% to N16.6trn-MPC
Government debt to the banking sector rose by 17.7 percent or N2.5 trillion to N16.6 trillion as of April 2022 from N14.1 trillion as at January, 2022.
In the Central Bank of Nigeria (CBN) April 2022 report on money and credit data situation in the country, it showed that financial sector borrowing by the government rose in the first quarter of the year. A rise that began with N14.1 trillion in January 2022, progressed to N14.7 trillion in February, N16.3 trillion in March, and N16.6 trillion in April 2022.
Despite a 17.7 percent increase over the four-month period due to several budgetary pressures, growth in banking sector borrowing slowed to N300 billion, or less than 1.9 percent, between March and April 2022, according to the report.
The CBN revealed that public sector credit made up 30.9 percent of the banking sector’s total credit assets, or borrowed fund makeup.
However, the banking sector’s borrowing from the private sector rose marginally within the four-month period by 5.5 percent, or N1.93 trillion, to N37.13 trillion in April 2022 from N35.2 trillion in January 2022.
Meanwhile, the report showed that the total credit allocation, which comprises public and private sector borrowing, grew by 9.14 percent, or N4.5 trillion, to N53.7 trillion in April 2022 from N49.2 trillion in January 2022.
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Brent rises above $120 as EU bans Russian oil imports
Brent crude futures rose above $120 on Tuesday, hitting their highest point since March 9.
This rise was influenced by the EU’s decision to ban over 85 percent of Russian crude by the end of 2022, adding concerns about an even tighter global market. Despite countries such as Hungary and a few others expressing concerns over shortages and their inability to handle the challenges that will follow, the sanctions on Moscow are expected to pave the way for a departure from Russian energy dependency and speed up processes to replace Russian crude and gas.
The sanctions also include taking out Russia’s biggest bank from the SWIFT message system.
However, analysts at Tradingeconomics suggested that oil price gains may be slowed as the move has already been priced in by the markets.
Meanwhile, demand from China is expected to gather strength as Beijing and Shanghai ease COVID restrictions.
Finally, production from OPEC+ is set to stick to its policy of modest output increases at its meeting on Thursday, rejecting any call from the West for increased production at lower prices.
German inflation hits fresh record, piles pressure on ECB
Inflation in Germany reached an all-time high of 8.7 percent, putting pressure on the European Central Bank to exit its COVID-19 stimulus.
The country’s high inflation, which exceeded most analysts’ predictions of 7.9 percent for the month of May 2022, was driven mainly by rising food and energy costs. A cost that came from the EU’s decision to gradually exit Russian gas as a result of the country’s invasion of Ukraine.
This report, which is crucial in the formulation of monetary and fiscal policies in the Euro zone, comes just 10 days before the next ECB meeting, where officials are set to announce the conclusion of large-scale asset purchases and confirm plans to raise interest rates in July for the first time in more than a decade.
Added to the many ideas to address Europe’s monetary and economic problems, some policy makers have even suggested the idea of a 50 basis point jump in interest rates, rather than the 25 basis point jump in interest rates.
According to Christian Lindner, Germany’s Finance Minister, the inflation figures put additional pressure on the government as households are further squeezed. Finance Minister Christian Lindner earlier Monday called the fight against surging prices the “top priority” while advocating an end to expansive fiscal policy.
“Inflation is an enormous economic risk,” Lindner told a news conference in Berlin. “We must fight it so that no economic crisis results and a spiral takes hold in which inflation feeds off itself.”
UK to grant visas to graduates of world’s top universities
Graduates from any of the top 50 non-UK universities can come to the UK without any prior job offer, the UK government through the Home Office said.
In its new visa scheme, the government hopes to attract individuals with potential from any part of the world to play a significant role in driving the growth of the UK economy while at the same time contributing to their own career growth.
According to the government, the scheme, which launched yesterday, Monday, May 30, will be expected to attract the “brightest and best” at the beginning of their careers to come and work in the UK.
Bachelor’s or Master’s applicants who are successful with their application will be given a two-year work visa, while PhD-holders will be considered for a three-year job stay visa.
The British Home Office revealed that this route is open to graduates from the top 50 universities as ranked by the Times Higher Education World University Rankings, Quacquarelli Symonds World University Rankings, or The Academic Ranking of World Universities with a degree, equivalent to a UK bachelor’s or postgraduate degree, awarded no more than five years before the date of application.
