“All eyes on the judiciary” today

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.

While the two-day warning strike by Labour started yesterday, the President and his team arrived in India for the G20 summit holding in New Dehli. It appears too early for a summit that starts on the 9^th and for which Nigeria is not a member, but I do not think that is why the President is there. I assume the President is in New Dehli because of the promise that Nigeria holds if we can follow the Indian example. They started their reforms in 1991 and they have not looked back.

I hope this year can be our defining moment.

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Markets

• The NGX All-Share Index (ASI) inched up 55.54 (0.08%) points to close at 68,334.68, representing a week gain of 2.77%, 4-week gain of 4.63%, and an overall year-to-date gain of 33.33%. Beta Glass Company led the gainers with 10% share price appreciation closing at NGN 42.90 per share, followed by Multiverse Mining & Exploration (+10%), Sunu Assurances Nigeria (+10%) and Omatek Ventures (+10%).

• Oil prices surged about 2% on Tuesday, reaching US $90 for the first time this year and highest since November 2022, after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year. Brent crude rose by US $1.24, or about 1.38%, to US $90.24 a barrel. The global benchmark, used to price over three-quarters of the world's traded oil, rose to $91.15 per barrel earlier in the session, its highest since Nov. 17.

• Naira was mixed at both the I&E Window and on the streets. Naira depreciated by 0.95% at the I&E exchnage, closing at a rate of N747.87 against the US dollar. On the streets, the Naira was up by 0.11%, reaching a value of N914 against the US dollar.

• U.S. natural gas futures fell about 7% to a one-week low on Tuesday. Front-month gas futures NGc1 for October delivery on the New York Mercantile Exchange fell 17.3 cents, or 6.3%, to US $2.582 per million British thermal units (mmBtu), putting the contract on track for its lowest close since Aug. 29.

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National Headlines

• Labour Strike – The Nigeria Labour Congress (NLC) two-day warning strike started yesterday, grounding some activities. It is expected to continue today. The National Electricity Workers Union shut down the head office of Kano Electricity Distribution Company, while some government ministries, departments and agencies in Abuja were shut in solidarity. The Abuja Electricity Distribution Company, on Tuesday, said the strike caused a power outage in the region.

• Nigeria + India – India is hosting the G20 meeting this week. The G20, comprising all the global and strategic economies in the world will hold in New Dehli, marking the end of the year long India’s presidency. Last year’s meeting, and expectedly this one is overshadowed by the Russia / Ukraine war. The Russian and Chinese president, recently and aggressively involved in the BRICS summit in South Africa will miss the summit. The Nigerian President Bola Tinubu arrived ahead of the meeting. If the goal is to learn from India, it is great. India started its economic reforms in 1991 and in over 20 years has become the fifth largest economy in the world, now growing higher than China.

• “All eyes on the judiciary” today – This slogan has been used much of the last few months by the supporters of Peter Obi, the presidential candidate of the Labour Party, but today, it is the really the case that “all eyes on the judiciary” as the presidential election tribunal delivers its judgement on the election petition brought by the People’s Democratic Party and the Labour Party against the All-Progressive Congress and INEC. Nigerians and all those interested in Nigeria are interested in the verdict. However, whatever the outcome of this much anticipated judgement, all parties have the liberty to approach the Supreme Court.

Global Headlines

• US recession receding – The probability of a US recession is receding, Goldman Sachs says. The US investment bank giant lowered its probability forecast from 20% to 15%. It is a sign that recent economic data on growth, inflation, and jobs gives the optimism that the US can successfully navigate the interest rate transition period of the last 18 months without entering a recession. The Chief Economist of the Bank Jan Hatzius wrote in the report, “we think the drag from monetary policy tightening will continue to diminish before vanishing entirely by early 2024”.

• The US dollar rose, Asian currencies slide – Relative to Asian currencies, the US dollar rose at the start of the week, causing panic in Asian capitals. For instance, China’s Yuan declined to a 10-month low, with authorities are tightening offshore yuan liquidity. Indian rupee is to remain below 83 / USD following the dollar rally. The Australian Aussie dollar slumped after the Reserve Bank of Australia kept rates steady. Relative to the Japanese Yen, it reached a six-month peak. Asian economies now fear an exodus of capital, with Asian equities showing massive foreign outflows in August.

This Week

• On Thursday, Sept 7, 2023, the NBS is expected to release the Nigeria foreign trade statistics for second Quarter. The first quarter shows that Nigeria’s export slightly increased by 2% while imports stood at N5.56 trillion, with petrol accounting for 79.4% of total imports in the review quarter.