ThinkBusiness Today - July 21st

E kaaro o, Ututu Oma, Barka da Safiya - Good morning, and a warm welcome to ThinkBusiness Nigeria, your Monday – Friday dose of commentary, contexts, and insights on business and economic news that matter to you.

TGIF.

The FIFA women’s world cup has started in Australia and New Zealand, making it the first co-hosted women’s world cup. It started yesterday and as I write, Nigeria is playing Canada and the score still 0 – 0. I hope you find the time to support the national team.

Have a great weekend.

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Markets

• Equities Market remains largely flat, with NGX ASI up by 0.27%, climbed 173.49 points to close at 63,930.72, a week gain of 1.88%, a 4-week gain of 8.16%, and an overall year-to-date gain of 24.74%. Top gainers on the day include University Press (10%), Eunisell Interlinked (9.97%), Academy Press (9.95%) and Chellarams (9.91%).

• Brent crude futures steadied above US $79 per barrel on Thursday after facing heightened volatility in recent sessions, as traders continued to assess the outlook for the oil market in the second half of the year

• Naira’s exchnage rate to the US $ continues to be volatile. At the I&E window, the Naira appreciated by 3.38%, closing at a rate of N768.16 against the US dollar, but reached N843 on the streets, a depreciation of 2.18%.

• US natural gas futures surged 5% to above $2.7/MMBtu, the highest in a week driven by expectations of heightened demand for air conditioning amid hotter-than-usual weather forecasts until at least August 4.

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National Headlines

• Review of Automobile Levy of 15% - According to reports in Punch, the acting Comptroller General of the Nigeria Customs Service, Adewale Adeniyi, says the customs will approach the federal government for review of the 15% national automobile council (NAC) levy. The NAC was increased from 2% to 15% May 2022 but does it is not consistent with the NAC legislation of 2014 designed to promote local production.

• N5.5 trillion collected in taxes - The Federal Inland Revenue Service (FIRS) has announced it collected N5.5 trillion in taxes in the first half of this year, achieving 100% of its target. Tax revenue collected from the oil sector was N2.03 trillion while non-oil tax collection stood at N3.76 trillion. Given its performance in H1, FIRS is on course to repeat the over N10 trillion taxes collected in the whole of 2022.

Global Headlines

• New unemployment claims lower in the US – The number of those filing unemployment claims in the world’s largest economy fell last week, reaching the lowest level in 8 weeks. It is another evidence of the tight US labour market, and amid declining inflation, there is now optimism that the US can avoid an economic recession in the coming quarters. Inflation in June was 3%, still higher than the 2% target, while GDP growth was 2% in Q1 2023, with expectations a higher GDP growth in Q2 2023.

• Another interest rate hike in Turkey - Turkey’s central bank on Thursday hiked its key interest rate by 250 basis points to 17.5%, the second consecutive month its raising rates. Since after the election, the central bank has returned to an orthodoxy approach to monetary policy.

• India bans rice exports – The Indian government in the last 24 hours banned exports of non-basmati rice to control rising food prices, according to CNBC reports. India accounts for over 40% of rice exports, and second largest producer after China. The ban will worsen food prices in importing countries, including Bangladesh and Nepal, key importers of India rice. The report also mentioned Benin, Nigeria’s neigbour. But everyone knows that the rice imported into Benin is destined for Nigeria.

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