Economy
Base Effect to Ease February Inflation to 14.31%—FSDH
By Dipo Olowookere
Analysts at FSDH Research have predicted that inflation rate for the month February 2018 will slow further to 14.31 percent from 15.13 percent recorded in January 2018.
The drop in the rate for the month is attributed to the base effect of previous year.
FSDH said it observed decrease in some major food prices as well as the slowdown in the price movement in some categories of non-food items in the Consumer Price Index (CPI) basket.
On March 14, 2018, the National Bureau of Statistics (NBS) is expected to release the inflation rate for the month of February 2018, based on the data release calendar on its website.
The February 2018 monthly Food Price Index (FPI) from the Food and Agriculture Organization (FAO) shows that the Index averaged 170.8 points, 1.07 percent higher than the revised value for January but 2.68 percent lower than the February 2017 figure. The increase in the FPI represented increases in all categories of commodities used in the calculation of the Index except vegetable oil and sugar.
The FAO Dairy Price Index appreciated by 6.21 percent in February. The prices of products in all the four categories of milk products that constitute the Index firmed up. This increase was mainly supported by strong import demand and lower than expected milk output.
The FAO Cereal Price Index increased by 2.55 percent from the previous month. The sustained increase recorded in the cereal price Index is as a result of the rise in the prices of wheat, maize and rice.
The FAO Meat Index was marginally up by 0.06 percent. The increase in the prices for bovine meat was offset by decreases recorded in the prices of poultry and pig meat. On the flip side, the FAO Sugar Price Index dropped by 3.45 percent and represents its lowest level in two years. The drop in the Index is on the heels of favourable supply conditions in the main sugar producing regions and last year’s removal of output quotas.
The FAO Vegetable Oil Price Index was down by 3.15 percent. The easing global import demand and rising inventories exerted downward pressure on the prices of palm oil and soy.
“Our analysis indicates that the value of the Naira appreciated in the parallel market while it depreciated in the inter-bank market.
“The Naira gained N2.00 in the parallel market to close at N362.50/$ while it lost 20kobo at the inter-bank market to close at N305.90/$ at the end of February.
“FSDH Research notes that there is a potential increase in the local prices of imported food items because of the faster than expected increase in the international food prices.
“This may have negative impact on inflation rate going forward.
“The prices of most of the food items we monitored in February 2018 recorded moderate increases, leading to 0.80 percent increase in our Food and Non-Alcoholic Index. The Index increased by 17.50 percent from 224.77 points recorded in February 2017.
“We also noticed increase in the prices of Transport and Housing, Water, Electricity, Gas & Other Fuels divisions between January and February 2018.
“We estimate that the increase in the Composite Consumer Price Index (CCPI) in February 2018 would produce an inflation rate of 14.31 percent lower than the 15.13 percent recorded in January,” the report tagged Inflation Watch said.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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