Business
Investors Gain N15.6 Trillion in H1’24 Amid Monetary Policy Tightening
Despite economic challenges, investors on the Nigerian Exchange Limited (NGX) gained over N15.6 trillion in the first half of 2024 (H1’24), largely due to the forex market reforms introduced by the Central Bank of Nigeria (CBN).
Market Performance Highlights:
- Market Capitalization: Rose to N56.601 trillion at the end of H1’24 from N40.917 trillion at the end of December 2023.
- NGX All Share Index (ASI): Increased to 100,057.49 points from 74,773.77 points over the same period.
- Year-to-Date (YtD) Return: Stands at an impressive 33.81%, despite recent bearish trends in Q2.
Quarterly Performance Breakdown:
- Q1 2024: The equities market saw a significant return of 39.84%, driven by:
- Strong company earnings.
- Positive dividend announcements.
- The listing of Transcorp Power Plc on the NGX, which added 7.5 billion shares at N240.00 per share to the market.
- Q2 2024: The market experienced a decline, with returns falling to -4.31% by the end of June 28th. This downturn was primarily due to:
- Increased monetary tightening by the CBN.
- Rising interest rates, which made fixed income investments more attractive than equities.
Analysts’ Insights:
Financial analysts emphasized the positive impact of CBN’s FX reforms, which have bolstered market confidence and attracted foreign investors.
InvestData Consulting Analysts:
“Fiscal and monetary policies are striving to return the nation’s economy to a recovery path, despite the continued mismatch of policies and implementation styles. Ahead of the half-year earnings season, more companies like UCAP, AccessCorp, MTNN, and UACN have informed the market of their closed period and board meetings to approve the Q2 earnings report. Investors should target companies with a consistent track record of dividend payments, strong fundamentals, and growth prospects that support further earnings growth.”
Olatunde Amolegbe, Former President, Chartered Institute of Stockbrokers (CIS):
“The CBN’s reform of the FX market has increased confidence among foreign investors, boosting the market alongside support from local institutional investors.”
The insights from these analysts suggest that despite the economic headwinds and policy challenges, the NGX has managed to provide substantial returns to investors, underpinned by strategic reforms and positive investor sentiment.
Business
Iceland Demands Supermarket Rivals Stop Selling Prawn Rings
Supermarket chain Iceland has filed a trademark application for its well-known “King Prawn Rings,” urging rival supermarkets to stop selling similar products. Iceland, headquartered in Flintshire, claims it has faced increasing imitation since introducing its prawn rings in 1991.
In a bold open letter shared on social media platform X (formerly Twitter), Iceland called out major competitors Aldi, Tesco, Lidl, and Asda, accusing them of selling “copy crustaceans.” The letter cheekily asserted, “The King Prawn Ring is ours, and we won’t be letting you off the hook.”
Lidl humorously responded, “Here was us thinking it was a classic 1970s party dish.”
Iceland’s letter, signed by “Iceland Foods,” warned other retailers to cease selling prawn rings, especially ahead of Christmas. The chain emphasized its intent to pursue legal action if competitors don’t comply, declaring, “Our lawyers are more than ready to dive into legal waters.”
The prawn ring battle has sparked social media buzz, with consumers eagerly watching how rival supermarkets will respond to Iceland’s trademark claim.
Business
Boeing Workers Reject Latest Pay Offer Despite 30% Rise, Union Says
The union representing striking Boeing workers has stated that its members are not interested in the company’s latest pay proposal, which includes a 30% raise over four years. According to the International Association of Machinists and Aerospace Workers (IAM), a survey revealed overwhelming dissatisfaction with the offer, labeling it as “inadequate.”
This rejection follows Boeing’s new “best and final” offer, which also included a performance bonus reinstatement, improved retirement benefits, and a one-time $6,000 signing bonus. The company set a deadline for the deal to be ratified by union members by midnight on September 27.
However, IAM criticized Boeing for sending the offer directly to workers and the media without consulting union leaders and stated that the time frame was insufficient to organize a proper vote. Boeing has denied the union’s claims and said it would allow more time and provide support to facilitate the vote.
Business
China Unveils Bold Measures to Revive Economy Amid Growth Concerns
China’s central bank, the People’s Bank of China (PBOC), has launched a significant package of measures aimed at revitalizing its struggling economy. PBOC Governor Pan Gongsheng announced plans to lower borrowing costs and allow banks to expand lending to stimulate economic activity.
With recent economic data raising concerns that China may miss its 5% growth target this year, the central bank will cut the reserve requirement ratio (RRR)—the amount of cash banks must hold in reserve—by half a percentage point, releasing around 1 trillion yuan ($142 billion) into the economy. Additional cuts may follow later in the year.
The package also addresses China’s property market crisis by cutting interest rates for existing mortgages and reducing minimum down payments for all homes to 15%.
Asian stock markets responded positively to the news, seeing a boost after Mr. Pan’s announcement, which came during a rare joint press conference with officials from two other financial regulators.
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