Economy
Business Conditions in Nigeria Strengthen as PMI Rises to 54.5
By Aduragbemi Omiyale
The health of the private sector in Nigeria recorded a solid improvement in January 2024 despite rising inflation and foreign exchange (FX) supply constraints, the Purchasing Managers’ Index (PMI) of Stanbic IBTC has revealed.
In the period under review, business conditions further strengthened for the second month running after reaching 54.5 points from the 52.7 points recorded in the preceding month.
The recovery in the Nigerian private sector was consolidated amid a sharp expansion in output and new orders. Purchasing activity also increased markedly, but difficulties paying staff meant that the rate of job creation eased, contributing to a rise in backlogs of work.
The recovery in new orders which began in December gathered momentum in January amid reports from panellists of strengthening demand. New business increased sharply and to the largest degree since April 2022.
Business activity also rose for the second successive month in January and at the fastest pace in 21 months.
All four broad sectors covered by the survey posted improvements in output. In turn, companies also expanded their purchasing activity at a sharp pace, with stocks of inputs up accordingly.
Firms were helped in their efforts to secure inputs by quicker deliveries from suppliers. Shorter lead times reflected good relationships with vendors, prompt payments and quiet traffic conditions.
The accumulation in stocks of purchases in part reflected plans for further improvements in output in the coming months.
Companies remained optimistic that output would increase over the year ahead and were more confident than in December.
Bucking the wider trend of a strengthening recovery, employment increased at a softer pace in January amid some reports that firms had faced challenges paying staff. This contributed to a second successive monthly rise in outstanding business. Backlogs increased slightly but at a faster pace than in December. Rates of inflation remained elevated in January but showed some signs of easing.
Purchase prices rose at the softest pace in eight months, but currency weakness and higher costs for fuel and raw materials meant that inflation remained elevated.
The rate at which staff costs increased was broadly unchanged from December as firms helped workers with higher living costs, particularly those related to transportation.
Matching the trend for input prices, the rate of output charge inflation remained elevated but eased to an eight-month low at the start of 2024.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange lost 0.27 per cent on Thursday, January 29, weakening the Unlisted Security Index (NSI) by 9.79 points to 3,622.77 points from the previous session’s 3,632.56 points, as the market capitalisation recorded a N5.85 billion loss to end at N2.167 trillion compared with Wednesday’s closing value of N2.173 trillion.
Three securities were responsible for the downfall of the alternative stock market, with leaders being Okitipupa Plc, which shrank by N15.70 to end at N218.90 per unit versus the previous day’s N234.60 per unit. Afriland Properties Plc declined by 50 Kobo to close at N14.00 per share compared with the N14.50 per share it finished at midweek, and Food Concepts Plc dropped 9 Kobo to sell at N2.63 per unit versus N2.72 per unit.
Business Post reports that there were two price gainers yesterday led by Nipco Plc, which added N17.48 to its value to settle at N259.48 per share versus N242.00 per share, and Central Securities Clearing System (CSCS) Plc appreciated by 35 Kobo to N40.50 per unit from N40.15 per unit.
During the trading session, the volume of securities went down by 57.3 per cent to 1.9 million units from 4.7 million units, the value of securities decreased by 74.4 per cent to N13.4 million from N52.4 million, and the number of deals slipped by 50 per cent to 16 deals from 32 deals.
When the market closed for the day, CSCS Plc was still the most active stock by value on a year-to-date basis with 15.3 million units traded for N622.9 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.6 million units exchanged for N108.4 million, and Geo-Fluids Plc with 8.9 million units worth N60.4 million.
CSCS Plc was also the most active stock by volume on a year-to-date basis with 15.3 million units valued at N622.9 million, followed by Mass Telecom Innovation Plc with 10.1 million units sold for N4.1 million, and Geo-Fluids Plc with 8.9 million units transacted for N60.4 million.
By Dipo Olowookere
The gains recorded by RT Briscoe and 40 other equities lifted the Nigerian Exchange (NGX) Limited by 0.22 per cent on Thursday after a day with the bears.
Rebound of the stock exchange was triggered by renewed bargain-hunting activities by the market participants, with RT Briscoe gaining 10.00 per cent to sell for N7.15.
SCOA Nigeria appreciated by 9.91 per cent to N31.60, Deap Capital also jumped by 9.91 per cent to N10.43, Veritas Kapital appreciated by 9.85 per cent to N2.23, and Zichis chalked up 9.80 per cent to trade at N3.81.
Conversely, Haldane McCall depreciated by 9.84 per cent to finish at N3.94, Union Dicon shed 9.79 per cent to close at N8.75, University Press shrank by 8.00 per cent to N5.75, Legend Internet crashed by 7.56 per cent to N5.50, and Austin Laz lost 7.50 per cent to quote at N3.70.
Data indicated that the bourse ended the session with 41 price gainers and 27 price losers, implying a positive market breadth index and strong investor sentiment.
Business Post reports that the industrial goods index was flat yesterday, but this was offset by the others, with the banking space up by 0.68 per cent, the insurance segment rose by 0.64 per cent, the consumer goods counter expanded by 0.46 per cent, and the energy sector grew by 0.10 per cent.
Consequently, the All-Share Index (ASI) went up by 362.93 points to 165,527.31 points from 165,164.38 points and the market capitalisation gained N232 billion to finish at N105.969 trillion versus the previous day’s N105.737 trillion.
The most traded stock for the day was Cutix with 144.6 million units worth N464.9 million, Veritas Kapital traded 56.6 million units for N124.3 million, GTCO sold 26.0 million units valued at N2.6 billion, Tantalizers exchanged 26.0 million units worth N110.0 million, and Japaul transacted 25.9 million units valued at N67.2 million.
When Customs Street closed for business, the activity chart showed the trading was up by 10.94 per cent to 691.4 million shares from 623.2 million shares, the trading value was down by 6.67 per cent to N15.4 billion from N16.5 billion and the number of deals shrank by 8.32 per cent to 38,665 deals from 42,172 deals.
By Adedapo Adesanya
The Naira appreciated further on the Dollar in the the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, January 29 by N3.49 or 0.25 per cent to N1,396.99/$1 from the previous session’s N1,400.48/$1.
This was supported by foreign portfolio inflows from a recent bond auction and relatively subdued Dollar demand.
Year old reforms in the FX market as well as structural reforms in the oil sector have eased fears and buoyed investments, boosting foreign capital inflows and stronger diaspora remittances.
Also, the weakening of the Dollar has lent support as the American currency hit a four-year low triggered by tariff uncertainty, policy volatility including threats to US Federal Reserve independence, and rising fiscal deficits.
It also improved its value against the Euro in the official FX market yesterday by N3.75 to quote at N1,671.78/€1 versus midweek’s rate of N1,675.53/€1, but lost N2.05 against the Pound Sterling to trade at N1,932.04/£1 versus Wednesday’s closing rate of N1,929.99/£1.
In the parallel market, it gained N10 against the US Dollar to settle at N1,470/$1 compared with the previous session’s exchange rate of N1,480/$1 but remained unchanged at N1,426/$1 at the GTBank forex desk.
Market traders expect the Naira to remain fairly stable and could strengthen further with a bond auction in the coming week.
Meanwhile, the cryptocurrency market was weaker as traders reacted to reports that US President Donald Trump would nominate former Federal Reserve Board member, Mr Kevin Warsh, to replace current Federal Reserve Chair, Mr Jerome Powell. It is believed that Mr Warsh is bearish on crypto.
President Trump said late Thursday he would name his nominee on Friday morning, a day after lambasting Mr Powell and the US central bank for not choosing to reduce rates. The US Federal Reserve left interest rates unchanged at its meeting on Wednesday.
Cardano (ADA) fell by 8.1 per cent to $0.3225, Ethereum (ETH) declined by 7.9 per cent to $2,718.16, Solana (SOL) slipped by 7.6 per cent to $113.90, Ripple (XRP) crashed by 7.3 per cent to $1.74, Litecoin (LTC) went down by 6.8 per cent to $63.55, Bitcoin (BTC) depreciated by 6.7 per cent to $82,292.42, Binance Coin (BNB) decreased by 6.6 per cent to $839.47, and Dogecoin (DOGE) retreated by 7.1 per cent to $0.1131, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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