Business
Upbeat data help European shares hold gains
LONDON – Upbeat economic data helped European shares break a three-day run of losses on Wednesday, offsetting some unconvincing company earnings and jitters about emerging markets.
Overnight trading in Asia had been mixed despite a rebound on Wall Street, but January purchasing manager index (PMI) data helped settle European nerves before the European Central Bank’s monthly meeting on Thursday.
The pan-regional FTSEurofirst 300 .FTEU3 was up 0.4 percent after the data. Outperforming Italy, Spain and Portugal bolstered gains of 0.4, 0.3 and 0.2 percent in London .FTSE, Paris .FCHI and Frankfurt .GDAXI.
Markit’s euro zone Composite PMI, which gauges business activity across thousands of companies and is seen as a good guide to economic health, climbed to 52.9 in January from 52.1 the previous month. That was the highest final reading since June 2011.
It showed the recovery of the 18-member bloc is broad-based, Markit said, with Germany leading an upswing in peripheral members amid signs of a stabilization in number two economy France.
“The euro zone PMI was down slightly on the earlier flash reading but nevertheless signals a very encouraging start to the year,” said Chris Williamson, Markit’s chief economist.
It was welcome news following data hiccups from the world’s biggest economies, the U.S. and China, earlier this week.
Dealers cautioned, however, that the mood remained brittle and it would only take a poor U.S. payrolls report on Friday to set the bears running again. The ADP reading on private hiring is due later on Wednesday, and investors are likely to react badly to any disappointment.
In Asia, the strain clearly took a toll. Demand for safety in the yen and top-rated bonds grew on a roller-coaster day for Toyko’s Nikkei .N225 and more losses for Chinese stocks.
The Nikkei eventually closed up 1.2 percent, but swings throughout the day meant it never got close to testing resistance at the 200-day moving average. The index has shed 14 percent this year following last year’s 50 percent boom.
YEN EFFECT
The faltering performance was all the more disappointing as some major corporate names reported upbeat earnings, helped by the yen’s recent plunge. Panasonic Corp (6752.T) jumped 17 percent after its quarterly earnings more than tripled. Toyota Motor Corp (7203.T) rose 5 percent after it predicted record annual profits.
On Wall Street, the Dow .DJI had ended Tuesday up 0.47 percent and the S&P 500 .SPX added 0.76 percent. But stock futures were trading lower on Wednesday, with the S&P e-mini contract off 0.3 percent.
The underwhelming bounce in the Nikkei led investors to again bid up the safe-haven yen, with the dollar dipping to 101.36 yen from an early top of 101.77.
“The key will be the U.S. data, and any missing of forecasts will challenge the global recovery story and push dollar/yen towards the 100.60 support,” said Jeremy Stretch, the head of currency strategy at CIBC World Markets.
The euro eased a touch to $1.3510 and German Bund yields returned to six-month lows, still driven by speculation that the threat of deflation might nudge the European Central Bank into easing policy on Thursday.
The major mover in currencies was the Australian dollar, which surged after the country’s central bank on Tuesday shut the door on further rate cuts.
The Aussie was enjoying the view at $0.8910 after climbing a steep 2 percent overnight. It also rallied against the euro and yen as speculators abandoned short positions in what had been a very crowded trade.
TREASURY HUNT
The reluctance to take risks led to demand for U.S. Treasuries, with the 10-year yield ticking down to 2.61 percent, not far from the recent three-month low at 2.57 percent.
Gold got a slight boost but remained sluggish at $1,255.60 an ounce.
In commodities, prices for wheat were boosted by dry weather and deteriorating crop conditions in the United States. Soymeal and corn were in high demand.
Broad gains in grains and natural gas lifted the Thomson Reuters/Core Commodity Index .TRJCRB 1 percent, the biggest one-day gain in nearly a month.
U.S. oil futures rose on bets on a reduced stockpile at a key delivery point caused by the start-up of a major pipeline. The March NYMEX contract added 64 cents to $97.84 a barrel. Brent crude rose 42 cents to $106.20.
– REUTERS
The Shell Petroleum Development Company of Nigeria Limited (SPDC JV) – Operator of the NNPC Limited, SPDC, TotalEnergies and Nigerian Agip Oil Company Joint Venture – has, announced the donation of US$1 million to support efforts to provide relief to over half a million people displaced in flood impacted communities of Borno State.
Managing Director, SPDC, and Country Chair, Shell Companies in Nigeria, Osagie Okunbor, said, “The donation will go into the procurement and distribution of relief materials and medical supplies for displaced residents who are now in urgent need of critical aid.”
He added that a Non-Governmental Organisation (NGO), local to the region with understanding of working with displaced people, will manage the distribution of the materials in collaboration with the Borno State Emergency Management Agency.
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According to Okunbor, the SPDC JV intervention was in response to the alert issued in September by the National Emergency Management Agency (NEMA), following the significant rise in water levels caused by the overflowing of the Alau Dam, and the calls for support by Borno State Governor, Babagana Umara Zulum.
“We consider providing this support to be of necessity to demonstrate our commitment to our society and the duty of care to our people. It expresses our deep concern for the victims of the devastating floods in Borno State,” Okunbor said.
He noted that the SPDC Joint Venture’s gesture is a continuation of similar assistance given over the years to the region that is recovering from recent conflicts.
Chief Upstream Operating Officer of the NNPC Upstream Investment Management Services (NUIMS), Bala Wunti, in a statement, added, “The urgency in providing this relief is important given the region’s existing vulnerabilities, with people recently barely recovering from conflict-induced displacement. The flooding has severely disrupted socio-economic activities, with women and children being disproportionately affected and we are glad that the joint venture is able to provide succour at this time.”
Wunti said, “As a responsible corporate organization, NNPC is glad to support the SPDC Joint Venture in this essential activity. Our thoughts are with those affected and with the government agencies working tirelessly to provide relief. We pledge to support ongoing efforts through immediate humanitarian aid and long-term partnerships for sustainable recovery.”
Investors on the Nigerian Exchange Limited (NGX) saw a boost of N217 billion added to their portfolios on Thursday, with the All-Share Index rising by 0.37% to close at 96,924.86 points.
This increase also lifted market capitalization to N58.73 trillion, driving the year-to-date return to 29.62%.
The insurance, consumer goods, oil and gas, and industrial goods sectors saw gains, increasing by 1.84%, 0.01%, 1.77%, and 0.02%, respectively, while the banking sector experienced a slight decline of 0.38%.
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A total of 33 stocks advanced, with top gainers including Conoil, Aradel, Eunisell, John Holt, and Thomas Wyatt. Meanwhile, Tantalizer, NGX Group, and Wema Bank were among the 17 decliners.
Trading activity surged with a 744.54% increase in volume and 16.48% increase in value, as 744.54 million shares worth N16.48 billion were traded across 9,700 deals. Consolidated Hallmark led in volume with 124.8 million shares, followed by Japaul Gold and EllahLakes. FBN Holdings, which recently opened its N150 billion rights issue, also featured prominently on the volume chart.
This robust trading activity highlights renewed investor confidence and growing momentum in Nigeria’s capital market.
Nigeria would soon have her own definition of free market, albeit by judicial interpretation, so long as the petroleum sector is concerned.
This follows the legal tussle on the legality of importation of refined products into Nigeria, on the heels of the deregulation of that sector.
Biztellers reports that three oil marketers, AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited, have approached the Federal High Court in Abuja, praying for a dismissal of a suit filed by the Dangote Petroleum Refinery and Petrochemicals (DPRP) to stop them from importing refined petroleum products.
The marketers, in response to an originating summon filed by the DPRP, filed a joint counter affidavit marked: FHC/ABJ/CS/1324/2024, and dated November 5, 2024.
They maintained that granting the application of the DPRP would spell doom for Nigeria’s oil sector.
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Their legal and economic argument assert that any form of monopoly for Nigeria’s oil sector is a recipe for disaster.
Recall that the DPRP in its originating summon dated September 6, 2024, had sued the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigeria National Petroleum Corporation Limited (NNPC Ltd), AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited as 1st to 7th defendants respectively.
Specifically, the DPRP prayed the court to declare that the NMDPRA was in violation of Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing licenses for the importation of petroleum products.
It asserted that such licenses should only be issued in circumstances where there is a petroleum product shortfall.
Consequently, the DPRP urged the court to declare that the NMDPRA was in violation of its statutory responsibilities under the PIA for not encouraging local refineries, the DPRP inclusive.
As a result, Shafa, A. A. Rano, and Matrix Petroleum, countered that the DPRP does not produce adequate petroleum products for the daily consumption of Nigerians.
According to their affidavit, the plaintiff had not placed anything before the court to prove the contrary.
They argued that they are well qualified and entitled to be issued an import licence by the NMDPRA to import petroleum products in Nigeria within the meaning of Section 317(9) of the PIA.
They also noted that they are fully qualified for the issuance of the import licences issued to them by the 1st defendant, as they duly met all the legal requirements for the issuance of such import licences, before the same were issued to them.
They categorically stated that, “The import licences lawfully and validly issued to the defendants did not in any way whatsoever, cripple the plaintiff’s business or its refinery.
“The import licenses issued to the defendants by the 1st defendant are in line with the provisions of the Petroleum Industry Act, 2021, the Federal Competition and Consumer Protection Act, 2018, and other relevant laws.”
They insisted that giving the DPRP the power of monopoly in Nigeria’s petroleum industry as it sought in the instant suit, would kill competitive pricing of petroleum products in the country.
They cautioned that such an act would further deteriorate the country’s critically ailing economy.
They also added that it would “unleash untold hardship on Nigerians, all of which constitute a recipe for disaster in the polity”.
The marketers explained that if Nigeria puts all her energy eggs in one basket by stopping the importation of petroleum products and allowing the plaintiff to be the sole producer and supplier of petroleum products in Nigeria, with liberty to determine the prices at which it supplies the products, the prices of petroleum products will continue to rise and energy security will elude Nigeria.
In addition, they pointed out that should the DPRP break down being a monopolized sector, Nigeria would be plunged into a-difficult-to-manage energy crisis.
“That in the event of any breakdown in or obstruction to the production chain of the plaintiff which stops it from producing, Nigeria will be thrown into energy crises because it does not have the reserves that would last it for at least 30 days that it would need to order, pay for, freight and import refined products into tanks in Nigeria.
“That amidst the glaring absence of any credible and demonstrable proof that the plaintiff refines and supplies adequate petroleum products for the daily use/consumption of Nigerians, is a recipe for disaster in Nigeria’s energy sector,” they wrote.
They further told the court that granting the reliefs sought by the plaintiff was a design to leave Nigeria and Nigerians at the mercy of the plaintiff with respect to the availability and cost of purchasing petroleum products in the country.
The presiding judge, Justice Inyang Ekwo fixed January 20, 2025, for a report of settlement or service.
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