Ghana To Control Gold Fields' Mines, S/Leone Gets IMF Climate Loan + More | Business Incorporated

[00:00:01][music] >> Hello and welcome to Business Incorporated live on Channel Television, the final one for the week where we'll be tracking the markets and of course the economy as well and see how that affects your pockets. Here are the stories that set your agenda.

[00:00:18]IMF approves $211 million climate financing for Sierra Leone.

[00:00:27]Ghana moves to tighten control of gold and Zimbabwe launches $17 million pipeline to unlock investments and capital inflows.

[00:00:47]It's great to have you join us again. I am Will Ebong and as always we're going to check in on commodities. We'll start with oil markets where we see oil prices are mixed after the postponed US Iran talks. Natural gas is down. We see that is 0.4% at that price and that level of $3.21.

[00:01:05]We also see Brent. Brent is also down 0.23%. That's what we have and we also see uh West Texas. That's the US West Texas Intermediate. That's So, that was up 0.1 as of last time I checked. It was trading at $76.68 a barrel. Let's check in on metals and see how that is faring, especially after the proposed postponed uh Iran and US talks. Uh gold is however on track for a third weekly loss as dollar continues to strengthen. As spot gold, that is down 1.9% that's nearly 2% down at $4,161.20.

[00:01:41]Spot silver, that's also down over 2% and we also see platinum down over 2% as well. Palladium is down 2.18% trading at $1,261.

[00:01:52]Copper is also down 0.6% at $6.34.

[00:01:56]Let's look at other stories making the rounds, especially in the commodity space in Africa. Ghana is considering giving the state a bigger role in the control of Gold Fields largest mining operation as part of broader efforts to increase domestic participation in the country's gold sector. We see these discussions are centered on restructuring ownership and influence over key assets, although no final decision have been reached. A government official said the move is aimed at ensuring Ghana captures more value from its natural resources, particularly at the time of strong global demand for gold. Uh Gold Fields has not yet publicly publicly commented on the latest developments. The talks are reflect a wider trend, however, across parts of Africa where governments are seeking greater control and higher returns from strategic mineral assets.

[00:02:43]Moving on, we see the Zimbabwe Investment and Development Agency, AZIDA, has unveiled a $17 million investment pipeline, and that's targeting key sectors of the economy.

[00:02:54]And the pipeline focuses on areas agriculture, mining, uh manufacturing, tourism, and infrastructure. And that's part of efforts to accelerate capital inflows and unlock stalled projects.

[00:03:05]AZIDA says the initiative is designed to bridge the gap between the project approval and actual implementation, which has slowed investment delivery in recent years. The agency adds that it will improve coordination between investors and government departments while fast-tracking regulatory approval to ensure quicker execution of deals.

[00:03:25]Officials also say the goal is to convert more signed commitments into on-the-ground investments that support economic growth and job creation.

[00:03:34]We see uh Sierra Leone has secured funding. The International Monetary Fund has approved about $211 million in new financing for the country to support climate resilience and economic stability. And the funding is aimed at helping the country better prepare for climate-related shocks while strengthening long-term physical and environmental reforms. The IMF says the package is part of wider efforts to support vulnerable economies facing with rising climate risk. And approval comes alongside ongoing IMF backed programs in Sierra Leone focused on economic reform and debt sustainability. And finally, we see Kenya has also secured a 1.2 million dollar loan to expand its main international airport. They're seeking lenders to do that. And then the government says it's working with the Trade and Development Bank and the Africa Finance Corporation to arrange about that amount of 1.2 billion dollars for the project. And the funds are expected to support upgrades and expansion works at the airport as Kenya moves to strengthen aviation capacity and position Nairobi as a regional hub.

[00:04:39]And let's get quick check-in on equities now with how they're trading, especially in intraday. And we see major stocks EGX closed about the kicking off Friday in the red. the NGX is down 0.36% and that's really continuing the bearish trading we've been seeing all week. And we see South Africa is also in the red. EGX 30 I mentioned, that is closed. Kenya for Thursday is closed in negative territory. But let's get a deeper dive what's happening behind the scenes on the NGX. And we have Abdulrasheed Momoh, Executive Director Operations at TLW Stockbrokers joining us to discuss this and breaking down. Good afternoon, Abdulrasheed. It's good to have you join us.

[00:05:20]>> Good afternoon.

[00:05:21]>> Uh Abdulrasheed, is there an end to this correction? It's just going downhill from where we started. We don't even remember when. But where is the market really heading right now?

[00:05:33]>> Nobody's talking when the market was going up. Everybody seems to be interested like when the market is coming down.

[00:05:39]For every up, there'll always be a down.

[00:05:41]So, people should not panic. It's just a correction. And um the market seems to be coming the correction seems to be coming in the same period when the Dangote refinery actually did their private placement. So, a lot of funds have actually left the market.

[00:06:01]>> Okay, so that's what we're seeing uh deepening the red in the market. But, uh let's look at uh other news now. So, is there an an end to you see in the horizon where the market will probably see a reset itself and go back to into green territory? Can you tell us that?

[00:06:16]>> Yeah, well, if if you look at the numbers, if you look at the number in terms of charts, what I said about that um this the the when the bears fall June are really coming very very strong cuz four days rally has wiped out the whole of May.

[00:06:34]Well, what May fought for in four in four days they're all out.

[00:06:38]Um we're looking at give or take will be pointing at let's say about 230,000 points.

[00:06:45]>> Wow, that's >> That's four a final strong support level.

[00:06:49]>> Well, that's really low, but we hope that it's going to bounce back bounce back to where we are headed. That's a >> No, but take note. Take note. Uh you need to know that most of the quoted companies actually let's say 95% of them their financials are really still good, you understand?

[00:07:05]But, I mean, once in a while people need to take profit. And I said one of the key reason here has been the Dangote um refinery. [clears throat] >> refinery private placement >> to our funds. Yeah, so definitely. And you know, the public offer is going to come up so you should expect more corrections.

[00:07:25]>> Wow.

[00:07:26]>> But, you know, in our as you said, we have we always have two players in the market, the investor and the trader. So, for the investor it's still a good market. For the trader that buys low and sells high is the one is actually the one in the panic mode now because at the end of the year most uh we are we are still going to see increased dividend payouts and everything is going to be more of better use for the market.

[00:07:53]>> Okay, so >> the long run.

[00:07:55]>> Okay, so right now we just have on the screen now you see the NGX has set new rules that's going to determine how much volume of shares can be traded on the exchange before it can trigger a price change. What are your thoughts on this very quickly before we go into what this means or the implication of it?

[00:08:13]>> Okay, um breakdown of minimum 10,000 shares.

[00:08:17]This was going to be uh because these rules have actually it has really helped the market for some time because the big players if you don't see 100,000 market is going to move move but with this new rule we're going to see a lot of volatility is going to happen in the market. We mean that the price wants to drop immediately based on 10,000 units. Let's have the kill once and for all and the rebound comes immediately because with this current movement now you can see that a lot of stocks like Seplat Airtel a lot of big names are not really affected because without a 100,000 you cannot move those share price. And most of them as you speak now they are million of full offers but because of the kind of um the kind of current price and what you need to move them they cannot move.

[00:09:18]>> Okay, but >> So that means the Yeah.

[00:09:20]>> now what we have is that prices are stocks that are 1,000 naira and above they need about a minimum of 10,000 naira 10,000 shares uh that must be traded before the price moves. So what does that >> Before.

[00:09:34]>> Before.

[00:09:34]>> Before it It 100,000 units the board.

[00:09:37]>> Okay.

[00:09:38]>> So, it favored the the it favored them it it protects them.

[00:09:43]>> It protected the defensive stocks, the big stocks.

[00:09:46]So, right now the big stocks are not no longer protected. Is that what you're saying?

[00:09:49]>> Yes, with with this. It now creates a lot of volatility in the market.

[00:09:54]>> Okay. So, the the the stocks that are below 500 naira that are they need a minimum of 100,000 for them to see a movement in the share price.

[00:10:04]>> rule applies across the board every every stock. So, it favored them more.

[00:10:07]>> Okay.

[00:10:08]>> You know, but these these smaller stocks you can see a lot of volatility going through. As I speak, you see some stocks now like um Seplat, you understand?

[00:10:19]Seplat is trading um let's check Seplat.

[00:10:23]Uh >> I was going to ask how is that impacting volume trading in the market? Is there a new strategy investors are now adopting to be able to, you know, maybe work around these new rules to ensure that maybe their stocks are not going to lose value?

[00:10:37]>> Okay, like Seplat is trading at about 11,363, but the market price is 10,222 227.

[00:10:45]So, you need to trade 10,000 units of Sep- with this rule, but the old rule with this new rule, if you trade 10,000, then there's going to be movement on >> in the price.

[00:10:55]>> Seplat. So, as it is I'm buying Seplat at 10,000, the market will still close at 11,000 because I can't do 100,000, which is huge volume.

[00:11:05]>> Mhm.

[00:11:06]>> It That means no no one's going to escape, but it will create volatility in the long term. You'll be able to if it drops, people will be able to get in the stock and buy back at a lower price.

[00:11:18]>> That's a good one for people who want to enter the market. So, it's a good thing in the market. This new rule is not a bad thing. Volatility is a good time because you you you have a good entry and exit points for stocks. So, it creates that flexibility. So, let's just look at it now. How do you see the markets probably closing today? I know that we're already in the red. But, is there anything happening on the exchange maybe you're seeing behind the scenes that I could flip and make it turn around for stocks?

[00:11:46]>> Okay, well, the market is down by 0.25. That's 583.72 as we speak. Most of the indexes are except from NGX oil and gas is in green. Um if you look at in terms of where the money which still we're seeing we're seeing about 2.6 billion worth of MTN and then Zenith. But, if you look at the top trades uh people are still in the banking sector. That's the bank That's where we see most of the volumes and then value in terms of trades for today.

[00:12:27]>> Okay, so I just want to ask quickly um just about the CBN new holdco rules. Um I know July 9th the stakeholders are going to meet to discuss uh that new capital threshold for or 51% for holdcos. How do you see what's your expectation? I just want to get from you.

[00:12:45]>> Sorry, for what for which one of these?

[00:12:47]>> new threshold, the capital requirement for holdcos, the new rules they've set for them.

[00:12:51]>> Okay.

[00:12:52]>> The 51% that holdcos now have to have as capital reserve um to strengthen their subsidiaries or strengthen the whole company or conglomerate as a as a whole.

[00:13:02]What do you think about it? Come July 9th, what do you see as the outcome of that meeting?

[00:13:07]>> Well, um I wouldn't want to say much about that for now until what what we're seeing basically is actually affecting the overall market as we speak.

[00:13:19]And um you know me um when it comes to fundamental news and data, I'm always my my strength is always in terms of data.

[00:13:31]And what I'm saying that is that uh the market has a cycle and it seems that most of these news whether good or bad actually starts to affect the market in the period of June and July. August is always one of the worst period it What I'm saying that is that um there is this ideology where people say "selling May and going away" but we start seeing over the years we start seeing that effect happens in the month of June.

[00:14:05]And July does not outperform June.

[00:14:08]So we're going to see some of these What what is being said that we're we're going to see some of these corrections taking place till about August. I'm not saying the market is going to be down down down but I know that at the end of from August most of these losses will be likely going to be recovered towards December and the beginning of the first quarter of next year.

[00:14:32]>> Mhm. Well, definitely that's a long wait. Is that the supposed to be >> No, no. You see there's nothing you need There's nothing you need to know about the market.

[00:14:41]It cannot be up all the time.

[00:14:43]>> Definitely.

[00:14:43]>> And these corrections are very healthy for the market.

[00:14:47]So even if you think you've lost out you have not lost out for an investor because you have not sold.

[00:14:55]>> But >> But for traders I mean that by the they are the ones getting their fingers burnt. All for me 95 of these quoted companies as I said their financials are still very strong. So you should watch out >> Definitely.

[00:15:10]>> [clears throat] >> We'll keep tracking that. Thank you so much Abdul Rashid Momah executive director operations TRW Stockbrokers for sharing your perspective. It's still Friday and markets definitely in the Middle East where we're looking right now are closed. Most of them are closed except in the UAE where we see Abu Dhabi and Dubai trading in negative territory.

[00:15:28]We see Dubai down 1.48% Abu Dhabi is down more than half a percent. Saudi and Qatari indexes they're closed for today.

[00:15:38]Let's look at the US. We see the markets they're closed today for the Juneteenth.

[00:15:42]That's the day that commemorates the end of slavery in the United States.

[00:15:45]However, futures trading in pre-market you see Dow Jones the Dow futures was down 0.27% S&P futures down 0.37% Nasdaq futures down 0.49%. Let's look at Asia markets now. We see Japan's Nikkei that rose to 0.28% to close at 71,250 points. And that's was after hitting a record high on Thursday. South Korea's Kospi however, that dropped 0.13% and this is driven by reversal of gains in shares of Samsung Electronics. But Hang Seng does in China they're closed markets in China, Hong Kong they're closed for public holiday. It's the start of the three-day Dragon Boat Festival. Hope to join them soon. But India we see them trading down today at 0.64%.

[00:16:33]Let's turn to Berlin for a look at how European markets are ending the week.

[00:16:36]Deutsche Welle correspondent Chiponda Chimbelu has got his eyes on them.

[00:16:40]Chiponda, how EU shares trading today?

[00:16:44]>> Well, European stocks have been struggling today and the stocks 600 is actually in the trade in the red rather trading 0.1% lower and Germany's DAX is flat and that's after of course a rise in oil prices which got their boost from the fact that US and Iranian negotiators postponed those peace talks which were scheduled for Saturday. Now energy stocks of course have been gaining as a result and health stocks are also trading higher here in Europe because of course investors are moving into sectors that are seen as safer in uncertain times. But even with that news of those US Iran peace talks stalling, the stock 600 is on track for a second straight week of gains.

[00:17:28]And that's of course good news because we did see a lot of volatility and the markets here in Europe did struggle because of that war Iran war.

[00:17:39]In terms of microeconomic news, there's also some good news there with German producer prices rising less than expected in May and they were up 2.2% year-on-year. Now that is of course welcome news because of course investors have been worried that high energy costs could feed through into inflation here in Germany.

[00:17:58]>> Looking at you just mentioned the producers producer prices, but there's also a report from Germany that says the number of people employed in the country and the industry that that's implementing the German industry that fell to a 10-year low last year.

[00:18:12]Uh How much What what what do you say about that? How do you explain that? What are you taking away is Chigonda?

[00:18:20]>> Well, in terms of what's happening according to the report, the number of people working in German industry will fell to 6.6 million people last year and that means that when compared to 2014, there were just under one in five Germans working in in industry in 2014 it was of course much higher and what we've seen is that the sector's proportion in the working population has declined by 3% and that's according to this new study which was published by the Bertelsmann Foundation this week. And it said that the trend represents a warning sign for future employment trends and that what is needed is a revival of labor demand in the industrial sector and greater dynamism in the labor market. Now the number of manufacturing job postings fell significantly. So they were there are now fewer people who are entering manufacturing than they are those leaving it. So, several major players, of course, will in Germany have been announcing several industry players have been announcing job cuts in the last 24 months.

[00:19:22]And while that has been happening, the number of workers, of course, in manufacturing has declined, but meanwhile, sectors other sectors are actually experiencing growth.

[00:19:31]>> How How do you explain this decline?

[00:19:33]Because they said the decline was driven by not by rising number of dismissals, but by employers not filling in vacancies and hiring new staff. Why is this happening?

[00:19:44]>> Well, what is happening is, of course, that those high energy costs, also the lack of structural reform here in Germany, and then, of course, of course, there's also other issues like bureaucracy, German red tape, which have added to the employment trends that we are seeing in industry because, of course, industry has been especially hard hit by energy costs, especially following the the the full-scale invasion of Ukraine when Europe decided to switch to other energy suppliers. That is what really hurt German industry in particular. But the downward trend that we have been seeing actually only affects certain parts of manufacturing, and that includes raw material extraction or metal processing. So, the steel industry, which is, of course, highly energy intensive, is one example there.

[00:20:34]But in there are other industry jobs well that require complex and technical knowledge, and those types of jobs, which, of course, include mechanical, electrical, and energy engineering. Now, those jobs are actually in high demand, and the demands for, you know, for those are, of course, increasing because of the digital and ecological transformation.

[00:20:55]But there was also another worrying trend for industry jobs because wages in the sector rose at a significantly slower pace than in other industries. So, the wage advantage of working in manufacturing, which has always been sort of an advantage here in Germany, that has halved. And that looks even worse for entry-level jobs, which of course reflects a wider trend here in Germany, where overall we are seeing that younger people in particular are struggling to find jobs, even those with a university degree.

[00:21:24]>> That's quite alarming, Jiponda. I hope you keep an eye on it and keep us updated about that development. So, thank you so much. It's always good to talk to you, Jiponda. Have a good weekend.

[00:21:35]>> Likewise.

[00:21:37]>> So, let's just quickly look at what's happening in crypto. I don't know, is it red? Is it green? Just having a heat map there, just like, oh, bloody red. Yeah, very red. I would say down 2.5% $62.

[00:21:46]It's Ethereum 1,000. And we see Ethereum also in the red, BNB in the red, XRP, Solana, all those, they're all in the red. So, it's not a very good day for crypto markets, especially now that we're seeing the Ethereum Foundation is facing another leadership exit, but that is also possibly what's happening to Ethereum and dragging that price down.

[00:22:06]But, we'll keep an eye out on the markets and see how they're performing for next week. But, that's all we have for today and the wrap on Business Incorporated. I'm Will Evason. Thanks for watching and bye for now.

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