Economy
July Inflation Rate to Drop to 15.96%—FSDH
By Modupe Gbadeyanka
Analysts at FSDH Research has predicted that inflation rate in July 2017 will fall to 15.96 percent from 16.10 percent recorded in June 2017.
In its latest report titled ‘Inflation Watch’, FSDH noted that “although the inflation rate (year-on-year) dropped consistently between January and June 2017 due to the impact of the base effect in the prior year, we note that inflationary pressure persists.”
It said the expected decrease in the inflation rate is largely attributed to the downward movement in some categories of non-food items in the Consumer Price Index (CPI) basket, as well as decreases in some major food prices.
“Based on the data release calendar on the website of the National Bureau of Statistics (NBS), we expect the NBS to release the inflation rate for the month of July 2017 on August 16, 2017,” it said.
The monthly Food Price Index (FPI) that the Food and Agriculture Organization (FAO) released yesterday indicates that the Index averaged 179 points in July 2017, 2.24 percent higher than the June value, and the third consecutive month of increase.
According to the FAO, the increase in the value of the Index in July was majorly due to the supply constraints and currency movements in the prices of items such as cereals, sugar and dairy.
The sharp increase in the FAO Sugar Price Index (up 5.19 percent) from June 2017 is mainly attributable to the strong appreciation of the Brazilian Real.
The FAO Cereal Price Index was up 5.14 percent in July 2017 mainly due to the appreciation in the price of wheat and rice.
The FAO Dairy Price Index appreciated by 3.63 percent in July 2017. The prices of most dairy products which include whole milk powders, cheese and butter appreciated during the period.
Meanwhile, the price of skimmed milk powder declined. On the flip side, the FAO Meat Index was down by 0.08 percent largely unchanged from June figure.
The price increases in ovine meat was offset by the downward price movement in bovine, pig and poultry. The FAO Vegetable Oil Price Index was down by 1.10 percent, driven by falling quotations for palm oil.
FSDH said its analysis indicates that the value of the Naira appreciated at both the inter-bank and parallel markets.
The Naira gained 0.08 percent to close at N305.65/$ at the inter-bank market while it gained 1.09 percent to close at N367/$ at the parallel market at the end of July 2017.
The appreciation in the value of the Naira should reduce the pass-through effect of the increase in the prices of food at the international market on domestic prices.
“The prices of most of the food items we monitored in July 2017 moderated while a few items recorded price appreciation.
“The movement in the prices of food items during the month resulted in 1.25 percent increase in our
Food and Non-Alcoholic Index to 248.20 points. We noticed increase in the prices of Housing, Water, Electricity, Gas & Other Fuels divisions between June 2017 and July 2017.
“Our model indicates that the general price movements in the consumer goods and services in July 2017 would increase the Composite Consumer Price Index (CCPI) to 236.83 points, representing a month-on-month increase of 1.13 percent.
“We estimate that the increase in the CCPI in July 2017 would produce an inflation rate of 15.96 percent lower than the 16.10 percent recorded in June 2017,” the report said.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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