Economy
Dec 2016 Inflation Rate Expected to Shrink to 18.44%
By Modupe Gbadeyanka
FSDH Securities Ltd has predicted that Nigeria’s inflation rate for December 2016 is expected to “marginally to 18.44 percent from 18.48 percent recorded in the month of November 2016.”
In its latest report, the firm explained this fall would be driven by lower than anticipated price increases within the Food and Non-Alcoholic Beverages division, as well as the base effect.
The National Bureau of Statistics (NBS) is expected to release the inflation rate for the month of December 2016 on January 13, 2016 based on the information on the twitter handle of the Statistician General of the Federation and Chief Executive Officer of the NBS.
The monthly Food Price Index (FPI) released by the Food and Agriculture Organization (FAO) shows that the FPI remained relatively the same in December. The Index was marginally down by 0.07 percent, compared with its revised November figure. Year-on-year (YoY), it grew by 12.02 percent.
According to the FAO, the performance of the Index was largely driven by a sharp fall in sugar prices. The FAO Sugar Index fell by 8.56 percent, on the back of the weakening Brazilian currency against the US Dollar.
Also, favourable reports emanating from the main producing region (Central South) contributed to the fall in prices. YoY, the Index rose by 26.34 percent.
The FAO Meat Price Index was down by 1.09 percent, as all meat categories recorded lower prices in December 2016.
On the flip side, the FAO Vegetable Oil Price Index appreciated by 4.22 percent. The rebound was primarily driven by lower global inventory level for palm oil. YoY, the Index appreciated by 29.31 percent in December 2016. The FAO Dairy Index appreciated by 3.35 percent from November 2016, as a result of weaker dairy production in the European Union (EU) and Oceania.
The Index recorded a YoY growth of 28.83 percent. The FAO Cereal Price Index increased marginally by 0.50 percent, mainly due to the increase in the prices of rice and maize. YoY, the Index declined by 6.25 percent.
Analysis by the FSDH Securities Ltd indicates that the value of the Naira remained stable at the inter-bank market while it depreciated at the parallel market by 2.65 percent to close at $/N491 from $/N478 at the end of November.
The depreciation in the parallel market led to an increase in the prices of imported consumer goods in Nigeria between the two months under review.
The prices of food items that FSDH Research monitored in December 2016 moved in varying directions.
The prices of vegetable oil, palm oil, meat, fish, sweet potatoes, onions and Irish potatoes were up by 25 percent, 21 percent, 14.2 percent, 12.5 percent, 7.1 percent, 4.2 percent and 4.17 percent respectively.
The prices of tomatoes and beans were down by 5 percent and 4.49 percent respectively. The prices of rice, garri, and yam remained unchanged. The movement in the prices of food items during the month resulted in a 1.04 percent increase in our Food and Non-Alcoholic Index to 216.99 points.
FSDH Securities Ltd said it also noticed increases in the prices of Clothing and Footwear; Housing, Water, Electricity, Gas & Other Fuels divisions between November and December 2016.
It emphasised that its model indicates that the price movements in the consumer goods and services in December 2016 would increase the Composite Consumer Price Index (CCPI) to 213.35 points, representing a month-on-month increase of 0.96 percent.
“We estimate that the increase in the CCPI in December will produce an inflation rate of 18.44 percent,” FSDH Securities Ltd stated in its report.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its gains by 0.91 per cent on Wednesday, June 3, spurred by three price gainers led by FrieslandCampina Wamco Nigeria Plc, which rose by N13.90 to sell N210.41 per share versus the previous day’s N196.51 per share. MRS Oil appreciated by N10 to N190.00 per unit from N180.00 per unit, and Food Concepts Plc added 5 Kobo to sell at N3.00 per share versus N2.95 per share.
As a result, the market capitalisation increased by N23.91 billion to N2.660 trillion from N2.636 trillion, and the NASD Unlisted Security Index (NSI) gained 39.97 points to finish at 4,446.27 points, in contrast to Tuesday’s 4,406.30 points.
The NASD exchange witnessed three price losers at midweek, led by Nipco Plc, which shrank by N21.30 to close at N325.97 per unit compared with the previous session’s N347.27 per unit, Nitrox Industrial Gases Plc went down by N1.20 to quote at N24.30 per share versus the preceding session’s N25.50 per share, and Central Securities Clearing System (CSCS) Plc weakened to by 69 Kobo to N75.41 per unit from N76.10 per unit.
The volume of trades yesterday significantly improved by 71.5 per cent to 527,221 units from Tuesday’s 307,363 units, as the value of transactions soared by 49.9 per cent to N64.2 million from the preceding session’s N49.9 million, and the number of deals surged by 9.5 per cent to 46 deals from 42 deals.
When trading activities ended for the day, 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 64.6 million units exchanged for N4.4 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 sold for N8.4 billion, followed 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 Adedapo Adesanya
The positive run of the Naira against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) continued on Wednesday, June 3, with the former chalking up N3.79 or 0.28 per cent against the latter, closing at N1,357.26, in contrast to the preceding session’s N1,361.05/$1.
Similarly, the Nigerian currency gained N10.52 against the Pound Sterling in the official market during the session to close at N1,822.67/£1 compared with the previous rate of N1,833.19/£1, and appreciated against the Euro by N9.56 to N1,574.83/€1 from N1,584.39/€1.
Further, at the black market, the Naira improved its value against the greenback at midweek by N5 to trade at N1,375/$1 compared with the N1,380/$1 it was traded a day earlier, and at the GTBank FX counter, it gained N6 to sell for N1,372/$1 versus N1,378/$1.
The boost came as the country’s external reserves continued to gain momentum. A look at the updated data from the Central Bank of Nigeria (CBN) showed that foreign reserves continue to increase with two consecutive inflows in June 2026, settling at $49.876 billion as of Tuesday.
Foreign portfolio investors, exporters and non-bank corporates continue to keep the supply side strong, with the less aggressive FX interventions by the CBN at the official window in recent times helping to ease worries about capital flight.
The apex bank reported that interbank FX turnover declined to $133.731 million across 136 deals, from $169.822 million the previous day.
Meanwhile, the cryptocurrency market remained bearish due to sell-offs triggered by geopolitical uncertainties and the US stock market rally.
Cardano (ADA) dipped by 5.5 per cent to $0.2046, Binance Coin (BNB) slumped by 4.8 per cent to $627.56, Solana (SOL) shrank by 3.9 per cent to $72.99, Ethereum (ETH) depreciated by 2.9 per cent to $1,844.53, and Bitcoin (BTC) slipped by 2.7 per cent to $65,675.87.
Further, Dogecoin (DOGE) depleted by 1.4 per cent to $0.0928, Ripple (XRP) declined by 0.7 per cent to $1.21, and TRON (TRX) lost 0.4 per cent to sell at $0.3336, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) gained 0.01 each to settle at $0.9986 and $0.9997, respectively.
By Dipo Olowookere
Nigeria’s stock market further depleted by 1.44 per cent on Wednesday following panic sell-offs by investors, who are cutting down their exposure to local equities.
Business Post observed that profit-taking dominated Customs Street at midweek, with all the key sectors of the Nigerian Exchange (NGX) Limited closing in red.
The insurance space shed 2.76 per cent, the industrial goods index lost 1.55 per cent, the banking counter declined by 1.53 per cent, the consumer goods segment shrank by 0.28 per cent, and the energy sector weakened by 0.05 per cent.
As a result, the All-Share Index (ASI) contracted by 3,554.05 points to 243,132.61 points from 246,686.66 points, and the market capitalisation moderated by N2.279 trillion to N155.940 trillion from N158.219 trillion.
Lafarge Africa led the losers’ chart yesterday after it gave up 9.97 per cent to trade at N307.90, Zichis lost 9.82 per cent to close at N29.20, Learn Africa depreciated by 9.80 per cent to N11.50, John Holt crashed by 9.80 per cent to N13.80, and Consolidated Hallmark dipped by 8.84 per cent to N6.19.
On the flip side, Abbey Mortgage Bank topped the gainers’ log after it grew by 9.93 per cent to N7.75, International Energy Insurance appreciated by 9.89 per cent to N6.00, Tripple G gained 9.80 per cent to sell for N4.37, Universal Insurance expanded by 8.91 per cent to N1.10, and Royal Exchange improved by 7.14 per cent to N1.50.
A total of 17 stocks gained weight yesterday, while 43 stocks lost weight, indicating a negative market breadth index and weak investor sentiment. This has been the mood of the market since the beginning of this week.
Market participants transacted 923.0 million shares worth N42.3 billion in 69,332 deals on Wednesday, in contrast to the 718.8 million shares valued at N29.3 billion traded in 71,683 deals on Tuesday, representing a drop in the number of deals by 3.28 per cent, and a rise in the trading volume and value by 28.41 per cent and 44.37 per cent, respectively.
Sterling Holdings led the activity chart with 264.6 million units valued at N2.1 billion, Access Holdings traded 76.7 million units worth N1.8 billion, Linkage Assurance exchanged 55.1 million units for N99.2 million, VFD Group sold 35.5 million units worth N378.8 million, and Ellah Lakes transacted 33.1 million units valued at N334.3 million.
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