CAPITALDIGEST, DAILY NEWS, 11/10/2022

OPEC EYES OIL PRICE HIKE, 2MBPD CUT The price of Brent, the global benchmark for crude, gained $1.62 by rising to $93.4/barrel at 6.23pm Nigerian time on Wednesday, as oil producers agreed on a major production cut. Members of the Organisation of Petroleum Exporting Countries and their Russia-led allies agreed on a major cut in oil production on Wednesday, a move to prop up prices that could bolster sanction-hit Moscow’s coffers and irk Washington. Nigeria is a strong member of OPEC as the country pumps over 1.4 million barrels of crude daily, though this figure has crashed due to the activities of vandals and oil thieves in the Niger Delta. AFP reported that the 13-nation OPEC cartel and its 10 Russian-led allies agreed to reduce two million barrels per day from November at a meeting in Vienna, according to Iran’s OPEC Governor, Amir Zamaninia. It is the biggest cut since the height of the COVID-19 pandemic in 2020. STOCK INVESTORS RECORD N860BN ONE DAY LOSS The losses recorded by Airtel Africa, MTN Nigeria Communication, Nigerian Exchange Group, and others dipped the market capitalisation by N860bn at the close of trading on Thursday. The market furthered its losing streak on Thursday by 3.23 per cent or N860bn, following sell offs in Airtel Africa Plc and 22 others. Airtel Africa led the laggards after its share price moved down from preceding day from N2,000 to N1,800, losing N200 or N10 per cent. It was closely followed by Presco which dropped from N142.60 to N128.35, losing N14.25 or 9.99 per cent; and Okomu Oil Palm, which also decreased from N188.30 to N169.50, losing N18.80 or 9.98 per cent. A newcomer, Geregu Power, recorded the highest price gain of 9.91 per cent to close at N120.90, per share. Livestock Feeds followed with a gain of 9.80 per cent to close at N1.12, while Cutix rose 8.00 per cent to close at N2.16, per share. Cornerstone Insurance went up by 3.92 per cent to close at 53 kobo, while FCMB Group appreciated by 3.83 per cent to close at N3.23, per share. On the other hand, Airtel Africa led the losers’ chart by 10 per cent to close at N1,800 per share. CBN LOANS TO FG HIT N22TN, ANALYSTS KICK The Federal Government borrowed N1.46tn from the Central Bank of Nigeria through Ways and Means Advances in August 2022. The total FG’s borrowing from CBN rose from N20.61tn in July 2022 to N22.07tn in August 2022. According to data from the CBN, the Federal Government borrowed a total N4.61tn from the apex bank between January and August. The N22.07tn owed the apex bank by the Federal Government is not part of the country’s total public debt stock, which stood at N42.84tn as of June 2022, according to the Debt Management Office. The public debt stock only includes the debts of the Federal Government of Nigeria, the 36 state governments, and the Federal Capital Territory. Ways and Means Advances is a loan facility through which the CBN finances the shortfalls in the government’s budget. According to Section 38 of the CBN Act, 2007, the apex bank may grant temporary advances to the Federal Government with regard to temporary deficiency of budget revenue at such rate of interest as the bank may determine. STOCK MARKET BUST OFFERS OPPORTUNITY FOR NIGERIAN INVESTORS From the US and the UK to Nigeria, different markets are experiencing massive decline, threatening global investments. Looming recession, high inflation, and high-interest rates are making things harder for businesses and individuals. The world seems to be nose-diving into an economic crisis.  In one of its reports, the World Bank said that the world might be edging toward a global recession in 2023 and a string of financial crises in emerging markets and developing economies. This is a result of the simultaneous hike in interest rates in response to inflation by central banks across the world. In a statement in September, the World Bank Group President, David Malpass, said, “Global growth is slowing sharply, with further slowing likely as more countries fall into recession. My deep concern is that these trends will persist, with long-lasting consequences that are devastating for people in emerging market and developing economies.” STOCK MARKET DOWN N661BN ON PROFIT-TAKING IN AIRTEL AFRICA, OTHERS The bearish momentum in the Nigerian Exchange Limited (NGX) increased further as sustained profit-taking activities in Airtel Africa plc, other stocks drove the market to its fifth consecutive weekly decline. The NGX All-Share index dropped by 3.41 per cent to close at 47,351.43 basis points, the lowest level since April 2022. Consumer Goods and Industrial Goods indices recorded a weekly loss of 0.6 per cent and 0.3 per cent respectively, reflected the overall market sentiment. The market breadth for the week was negative as 11 stocks appreciated in price, 46 equities depreciated in price, while 100 stocks remained unchanged. Multiverse Mining & Exploration led the gainers table by 21.95 per cent to close at N4.50, per share. Geregu Power followed with a gain of 20.90 per cent to close at N120.90, while Livestock Feeds went up by 11.76 per cent to close to N1.14, per share. On the other side, NASCON ALLIED Industries led the decliners table by 13.64 per cent to close at N9.50, per share. Cornerstone Insurance followed with a loss of 10.71 per cent to close at 50 kobo, while Neimeth International Pharmaceuticals declined by 10.00 per cent to close at N1.26, per share.