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Global Economic Roundup

Oil Prices Strengthen by A Few Upticks Factors

Oil prices rose for most of the week on the weak US dollar, the hope of economic activities rebound in China and the US, the EU’s hunger for more crude oil ahead of the Russian oil embargo, and the imminent supply cut by OPEC+. However, the reversals in some trading sessions were supported by high crude inventories in the US, bearish economic data, and the Chinese dry trade data and doubling down on Covid-19 restrictions. Analysts expect oil prices to remain below US$100 per barrel, on average, for Q4 2022, barring any significant disruption. Prices of Petroleum products in Nigeria are expected to move in tandem with the trajectory of international crude oil prices.

US Trade Data support the Economy to 2.6% GDP growth

The US economy registered a 2.6% real GDP growth in Q3 2022 beating even the most optimistic forecasts. The world’s largest economy entered a technical recession in June, when it recorded a second negative quarterly GDP growth (-0.6%) in Q2 after a -1.6% print in Q1 2022. Analysts believe that the Q3 2022 recovery was supported by a stronger exports and steady consumer spending, which itself was aided by a healthy job market.  Tamped down by rising mortgage cost, Housing investment plunged by 26%.   Analysts say that the recent data shows that the H1 2022 contraction did not reflect the underlying health of the economy. Analysts say the Q3 2022 data allays fears of a global recession.

UK Faces “Deep Recession” As Inflation Hits 40-Year High

British inflation surged to a new 40-year high in July on soaring food prices, official data showed Wednesday, adding to a cost-of-living crisis as the country faces the prospect of recession. The Consumer Prices Index (CPI) accelerated to 10.1 percent last month from 9.4 percent in June, itself a four-decade high the Office for National Statistics said. The Bank of England warned earlier this month that UK inflation would climb to just above 13 percent this year, which would be the highest level since 1980. It also projected that the country would enter a recession near the end of the year that the BoE expects to last until late 2023.Official data last week showed Britain’s economy shrank in the second quarter. In a bid to bring down inflation, the Bank of England has hiked its key interest rate several times since the end of last year. The most recent increase was by 0.5% points, the biggest hike since 1995 and which leaves borrowing costs at 1.75% driving up mortgage repayments for households but boosting savers.

Some of our recommended stocks are mentioned below;

GTCO PLC:

Gtco Plc Q3 2022 results showed that interest income advanced by 19.20% from N195.03bn in Q3 2021 to N232.49 bn in the current period. Net interest income went up by 16.41% from N162.94 bn in Q3 2021 to N189.69 bn in Q3 2022. Profit before tax grew by 11.73% from N151.91bn in Q3 2021 to N169.72bn in the current period due to 18.27% rise in fees and commission income and 42.32% rise Net gains on financial instruments. Profit after tax went up by 0.73% from N129.40bn in Q3 2021 to N130.35bn in the current period. Consequently, Gtco recorded a 0.22% rise in earnings per share from N4.54 in Q3 2021 to N4.55 in Q3 2022.  Gtco Plc has a BVPS of N29.66, P/BV of 0.61x and P/E ratio of 2.97x.

DANGSUGAR PLC:

Dangote Sugar Plc Q3 2022 results showed an increase in revenue by 47.48% from N195.50bn in Q3 2021 to N288.32bn in Q3 2022. Operating profit advanced from N28.61bn in Q3 2021 to N49.87 bn in Q3 2022, reflecting an increase of 74.26%. PBT went up by 56.97% from N23.10bn in Q3 2021 to N36.27bn in the current period. PAT grew by 60.07% from N15.51bn in Q3 2021 to N24.83bn in Q3 2022. EPS rose by 59.38% to N2.04 in Q3 2022 from N1.28 in Q3 2021. Dangote Sugar Plc has a BVPS of N11.63, P/BV ratio of 1.32x and P/E ratio of 5.64x.

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