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MARKETS

Investors gain big on Airbnb, now worth over $100 billion

At its present trading valuation, Airbnb is more valuable than Uber, and leading hospitality giants Hilton and Marriott combined.

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Global investors are cashing big time on the world’s biggest online vacation rental company, popularly referred to as Airbnb.

Following a remarkable comeback, the company’s share began trading on at its debut for $146 per share, more than double its initial public offer price and values the business at more than $100 billion.

The recent valuation of Airbnb represents a major leap, taking into account its previous valuation high of $31 billion in a 2017 financing round.

At its present trading valuation, Airbnb is more valuable than Uber, and more than two leading hospitality giants Hilton and Marriott combined.

What this means

The amazing surge seen in Airbnb’s stock price lately revealed the strong bias of global investors towards its business model and the latest signal in what’s shaping up to be a good week for the company.

  • Airbnb, the biggest and most popular vacation online rental marketplace, known for disrupting the hospitality industry, is now listed on the Nasdaq, under the ticker symbol ‘ABNB’.
  • Airbnb has become a household name amongst millennials and a growing middle-class population, as it has changed the hold big hotel businesses had on the accommodation industry, leading hotels to reform their business strategies.
  • Airbnb is an online marketplace that allows individuals to let out their apartments or spare rooms to intended guests, at prices often lower than hotels.
  • Airbnb makes a cut of 3% commission of every booking from those individuals listing their apartments on Airbnb’s platform, and between 6% and 12% from guests that book via its platform.

What you should know

Our source, a few days ago, did an in-depth analysis on why it felt the company’s IPO might be worth your money.

Though, Airbnb’s seeming entry into the public market looks new, the business has built a consistent pathway of generating impressive revenue that it’s closest rivals (Bookings, Expedia) would turn green at.

  • Last year alone, Airbnb’s gross bookings earnings of $38 billion were 35% that of Expedia and 39% of Booking Holdings Inc., and it kept the momentum fired up, that it closed it amazingly to 62% and 64%, respectively, when taking to account the recent year to date periodicity.
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CURRENCIES

Naira gains at NAFEX window as CBN’s intervention in forex market continues

The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Tuesday, closing at N393.83/$1.

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On January 5, 2020, the exchange rate between the naira and dollar closed at N393.83/$1, the second trading day of 2021 at the Investors and Exporters’ (NAFEX) window where forex is traded officially.

This is an appreciation from the N394.30 recorded on the previous trading day, January 4, 2021.

Themoneymetrics understands that intervention by the Central Bank of Nigeria has forced prices further down on Tuesday, sustaining the appreciation recorded on the last day of trading after the sharp depreciation recorded on the last trading day of 2020.

We also reported last week that the latest round of adjustment at the I&E window is temporary as the rates could fall back below N400/$1.

However, at the black market where forex traded unofficially, the exchange rate continued to remain stable at N470/$1 on Tuesday, January 5, 2021. The exchange rate at the parallel market closed at N470/$1 on the previous trading day January 4, 2021.  It has been trading at N470/$1 since the 29th of December 2020.

The exchange rate disparity between the parallel market and the official market widened again to N76.17 representing a 16% devaluation differential.

NAFEX

The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Tuesday, closing at N393.83/$1 as against N394.30 reported on January 4, 2021.

  • This represents a 47 kobo gain when compared with that of the previous trading day.
  • The opening indicative rate was N394.63 to a dollar on Monday. This represents a N15.3 gain when compared to the N409.93 that was recorded on Monday, January 4, 2021.
  • The N411 to a dollar was the highest rate during intra-day trading before, it still closed at N393.83 to a dollar. It also sold for as low as N387.10/$1 during intra-day trading.

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window rose by 47.3% on Tuesday, January 5, 2021.

  • According to the data tracked by Themoneymetrics from FMDQ, forex turnover rose from $22.75 million on Monday, January 4, 2021, to $33.51 million on Tuesday, January 5, 2021.
  • The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
  • The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.

Can the naira sustain below N400?

Last Thursday, December 31, 2020, the central bank allowed the exchange rate to depreciate to N410.25 as a late demand surge forced prices higher. Even though the highest price for the day was N411, the market still closed lower at N393.83 as the trend from the previous trading day continued, blowing any initial belief that a devaluation had occurred last week.

Devaluation supporters who had expected this to be a nudge towards “market reality” will be surprised by the appreciation recorded on Monday, suggesting that the central bank will continue with the defence of the local currency in the new year. On the flip side, policy supporters will cite this as the effect of market forces.

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COMMODITIES

Gold prices drop on U.S. Senate run-off elections

Gold futures dropped about 0.33% to trade at $1,947.

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Gold prices drifted lower at mid week’s trading session.

Traders are going short partly on awaited results of the U.S. Senate runoff election and gauging the prospects of further quantitative easing programs.

What you should know: At the time of writing this report, gold futures dropped about 0.33% to trade at $1,947.

Votes are presently being counted in the Georgia election, where two U.S Senate seats are up for grabs.

What this means: Traders are focusing on the outcome of such election results on the bias that it will determine which party will have control of the upper chamber in the U.S congress, and the ease with which President-elect Joe Biden can move his legislative agenda through.

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Our source, spoke on the political macros weighing on gold prices:

 “Gold is in a holding pattern ahead of Georgia runoff results.

“Gold continues to trade on the front foot after a roaring start to 2021 for TIPS, which outperformed about everything on Monday and reached new highs.

“It feels like there was a wave of last-ditch efforts effort to have the ‘blue wave’ trade on ahead of a Topsy Turvy Tuesday Senate election runoff in Georgia.”

What to expect: gold traders are anticipating a pause in action today until the election results are released as any disappointment (i.e., no blue wave) there could cause some pullback. However, with a long end of the curve firmly supported by the reflation narrative, gold could remain well supported on dips.

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COMMODITIES

Oil prices plunge over OPEC+ drama

Oil prices drifted lower amid reports revealing OPEC+ members are disconnected as regards to February crude oil output quota.

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Oil prices drifted lower at the second trading session of the year amid reports revealing OPEC+ members are disconnected as regards to February crude oil output quota.

What you must know: At the time of writing this report, Brent oil futures lost about 0.70% to trade at $50.70 a barrel, and West Texas Intermediate, futures were down more than 0.50% to trade at $47.55 a barrel, thereby giving up earlier gains sighted in Tuesday’s early trades.

Both major benchmarks lost more than 1% during the last trading session on the account that the oil cartel group was forced to extended Monday’s Joint Ministerial Monitoring Committee, as its members failed to agree to reach a compromise on February’s oil output levels.

Also, oil traders had their minds distorted as fuel demand worries also continue to remain on major headlines on the bias that a number of global COVID-19 cases continue to rise and more nations introduce restrictive measures.

Stephen Innes, Chief Global Market Strategist at Axi in a note to Themoneymetrics gave an in-depth analysis of the fundamentals pushing oil prices lower and highlighted the mutant COVID-19 strain causing havoc in leading economies;

  • “The oil market toppled head over heels with broader markets as the sum of all fear for oil market concerns centers around lockdown consternations. All the while, OPEC was doing their best to hold prices in check emphasizing the need for continued cooperation and vigilance in the face of the uncertain outlook.
  • “The most worrying aspect for oil market concerns is the case of a brave new year giving way to the same old fear as the re-imposition of worldwide lockdown to defend against the coronavirus’s mutant strain will pose the greatest near-term risk on the path back to oil demand normalcy.”

What to expect: Far more important for crude oil traders will be news flow relating to the COVID-19 vaccine rollout, stimulus measures being considered by various governments, and how quickly the world can get back on the path to normal oil demand levels via the vaccine rollouts.

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