Economy, Finance, Business News Headlines & Insights: 21st April 2020

Economy, Finance, Business News Headlines & Insights: 21st April 2020

Stock Market Update:

Nigeria’s equity market is currently down by 1.19%. FTSE (UK) – down by 1.77%, DAX (Germany) – down by 2.73%, CAC 40 (France) – down by 2.52% and Nikkei 25 (Japan) – down by 1.97%.

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Oil Market Update:

The negative closing price of WTI futures price yesterday can be interpreted to mean sellers desperately paying buyers to take US crude from them. As an example, WTI is currently trading at -$6.3, it means suppliers of oil have to give $6.3 to buyers willing to take one barrel of their oil.

Why will a seller pay a buyer to take a product away? In this case of oil-storage trade, the sellers want to avoid storage costs.

In a WTI futures contract, the buyers of WTI oil are required to take physical delivery of their oil at a location called Cushing, Oklahoma in the United States. Sadly, the storage capacity of that location had been exhausted as a result of oil glut and destruction of demand by COVID-19, and buyers don’t want to take delivery of oil without a place to store it before getting a final buyer. Sellers were therefore compelled to pay buyers an incentive, the reason for the negative closing price of WTI on 20th April.

Aside from the real activities of Buyers and Sellers, Oil as a commodity is heavily traded on exchanges.

The closing price of the WTI yesterday was more of a function of the commodities trading market than underlying fundamentals, more about the activities of pure Investors than the reality on the ground. You will be right to call it panic.

WTI futures expired yesterday, meaning that pure Investors had to sell May’s contract and purchase June to avoid having to make good on their purchase and also avoid storage costs, because there was no storage capacity available in Cushing, Oklahoma.

The main takeaway here is that this challenge is peculiar to the US and the price of WTI is expected to make a comeback in no time.

As for Brent, the unprecedented crash in WTI will not crash Brent prices as Brent contracts will expire at the end of the month.

Nigeria’s Bonny Light futures prices will not be affected too, for now.

Current prices: WTI -$6.3, Brent $21.57, Bonny Light $20.88

Money Market Update:

Nigeria’s annual inflation rate rose for the seventh consecutive months to 12.26 per cent in March, the highest in 23 months from 12.2 per cent in February. The Nigeria Bureau of Statistics (NBS) disclosed this today in its Consumer Price Index Report for March 2020. Read more

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Earnings Flash: United Capital grow earnings by 32.23% and PAT by 53.89%, see highlights in the image below.


BREAKING: 38 New Cases Of COVID-19 Confirmed By The NCDC
Thirty-eight new cases of #COVID19 have been recorded;  says the Nigeria Centre for Disease Control (NCDC). This brings the total number of cases confirmed to 665. According to the NCDC, 23 cases were discovered in Kano, 5 in Gombe, 3 in Kaduna, 2 in Borno, 2 in Abia, 1 in FCT, 1 in Sokoto and 1 in Ekiti. Read more
Latest on the spread of the coronavirus around the world
Reported cases of the coronavirus have crossed 2.46 million globally and 169,863 people have died, according to a Reuters tally as of 0200 GMT on Tuesday, with U.S. President Donald Trump saying he will suspend all immigration into the country. Read more
Nigeria’s Airports Will Remain Shut For Two More Weeks – Aviation Minister
Airports in Nigeria will not be reopened on April 23rd as earlier scheduled. Instead, they will remain shut for two more weeks, a statement from the Ministry of Aviation said on Monday. “As a result of the extension on lockdown by Mr President, it is no longer possible for us to open our airspace and airports for normal operations by the 23rd April 2020,” the Minister of Aviation, Hadi Sirika, was quoted as saying in a statement by the Director of Public Affairs in the ministry, James Odaudu. Read more
Brent crude crashes to $25, US oil falls below $1
The international oil benchmark, Brent crude, fell to $26 per barrel on Monday, as the demand collapse triggered by the COVID-19 pandemic has caused a massive oversupply in the global oil markets. The lockdowns imposed in many of the world’s major economies have sent crude demand tumbling. US oil prices crashed below $0 per barrel on Monday, hitting the lowest level since the contract launched in 1983, on warnings that storage could fill up within weeks, according to Financial Times. Read more
COVID-19: Insurers set to pay N3m on deceased doctor
Nigerian insurers have said they are ready to pay N3m to the first medical casualty who died while taking care of a COVID-19 patient in fulfilment of their promise to provide free cover for medical personnel. Some underwriters disclosed this to our correspondent after a 51-year-old medical doctor died recently of COVID-19, which he contracted from a patient he had treated. The doctor died at the Lagos University Teaching Hospital after he was rushed to the facility. Read more
Corporate Disclosures:

UAC of Nigeria Plc – Dividend Information for 2019 AFS
A Dividend of 10 kobo per ordinary share, subject to appropriate withholding tax and approval will be paid to shareholders whose names appear in the Register of Members as at the close of business on the Monday 18th May 2020. Read more
Sunu Assurances Nigeria Plc – Notice of Board Meeting and Closed Period for 2020 Q1 Accounts
Notice is hereby given that a virtual meeting of the board of directors of SUNU Assurance Nigeria Plc (the company) would hold on Thursday, May 7 2020 at 10.00 am to consider and approve the first quarter 2020 unaudited financial statement. Read more

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