Naira depreciates in both markets

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.

Grateful to God that He has kept us into the 9^th month of 2023. It’s been a tough and difficult year, but we are tougher and more resilient than we think or know.

Best wishes for the remainder of the year.

Please, also share so we can continue to build a community of “business thinkers”.

Markets

• The benchmark NGX All-Share Index (ASI) inched up 109.46 (0.16%) points to close at 66,548.99, representing a week gain of 1.75%, 4-week gain of 1.97%, and an overall year-to-date gain of 29.85%. Nigerian Exchange Group led the gainers with 10% share price appreciation closing at NGN 26.40 per share, followed by Seplat Petroleum Development Co. (+9.95%), Trans-Nationwide Express (+9.38%) and University Press (+9.32%).

• Oil prices rose on Thursday, boosted by a large drawdown in U.S. crude inventories and production cuts by OPEC+, and as US data showed slowing inflation in the world's biggest consumer. Brent crude futures for October, expiring on Thursday, rose 94 cents, or 1.1%, to US $86.87 a barrel. U.S. West Texas Intermediate crude futures for October rose US $1.24, or 1.5%, to US $82.87.

• Naira was down at both the I&E Window and on the streets. Naira depreciated by 3.32% on the I&E exchange, closing N762.71 against the US dollar. On the streets, Naira was down by 0.09%, reaching N923.33 against the US dollar.

• U.S. natural gas futures climbed about 2% to a three-week high on Thursday on hotter weather forecasts.

   

In partnership with

Global Headlines

• Lessons from my neigbours – Following the coup in Gabon two days ago, the Rwandan and Cameroonian governments have reshuffled their military leadership. Rwandan government retired 12 generals and other officers while President Paul Biya in Cameroon also made changes. President Paul Kigame of Rwanda has been in power for 23 years and plans to seek reelection in 2024. Paul Biya, the president of Cameroon has been in power since 1982. This metric signals sit tight leadership in these countries, but not sufficient to judge whether the countries enjoy stable democracy or not. Stable democracies are underlined by freedom to choose, free and fair elections, press freedoms, and strengthened by economic progress. Some of these are lacking in many African countries, including Nigeria.

• Inflation in the Euro Zone – Latest inflation data from the Euro zone rose higher than expected, 5.3% for August. According to Dow Jones poll monitored by CNBC, inflation expectations was 5.1%. The European Central Bank will meet in two weeks, September 14^th , to determine whether to raise interest rates further. Since July 2022, the central bank has lifted rates by 4.25 percentage points.

• China’s deflation woes – China's manufacturing activity contracted for a fifth straight month in August, most recent signal of continued slowdown in the world’s second largest economy. However, data also shows that producer prices rose for the first time in seven months. The official purchasing managers' index (PMI) rose to 49.7 from 49.3 in July, according to the National Bureau of Statistics.