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Naira Stability Buoys Nigeria’s Consumer Confidence Index in Q2—Report

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Consumer Confidence Index Nigeria

By Dipo Olowookere

A new report released by South Africa-based Nielsen Africa has revealed Nigeria’s Consumer Confidence Index (CCI) for the second quarter of 2018 recorded a very healthy increase of nine points to 122, while Ghana’s CCI for the same quarter dropped 12 points to 108.

In an emailed statement to Business Post, Nielsen Africa noted that in terms of Nigeria’s performance, its Sub Saharan Africa chief, Mr Bryan Sun, submitted that, “The stability of forex rates and a steady Naira has led to stable retail prices of most manufactured goods and imported staples, resulting in a recovery in confidence levels in Nigeria. The improvements seen in the economic environment are reflected in the overall enhanced sentiment, with 83% of Nigerians describing the state of their personal finances over the next year as excellent or good.”

He stated further that this has resulted in a more positive outlook in terms of Nigerian consumers immediate-spending intentions, which has risen to 48% (up from 38% in Q1) who say now is a good or excellent time to purchase what they need or want.

This increasingly positive sentiment is also reflected in their job prospects, with 67% viewing them as excellent or good (up from 56% in Q1’18) and 29% as not so good or bad.

More cash, more spend

Looking at whether Nigerians have spare cash, a majority of 54% said yes, up nine points from the previous quarter, while 46% said no. Looking at what their spending priorities are once they do have spare cash, the highest number 86% would put it in savings followed by 82% on home improvements, 72% on new clothes and 67% would use their spare cash for both out of home entertainment and investing in shares and mutual funds.

When asked about the changes in their spending to save on household expenses, compared to this time last year, 80% of Nigerians agreed that they have changed their spending habits.

In terms of the actions they took to save money last year, the highest number (66%) said they spent less on at home entertainment, followed by 57% who took less holidays, 42% who spent less on new clothes and 39% who delayed the replacement of major household items.

Some of the major concerns driving this more cautionary mindset include 19% who think economy is their biggest concern over the next six months, whereas 12% consider food prices and 11% said work/ life balance is their biggest concern. When asked what their second biggest concern would be over the next six months, 19% said food prices, 13% said work/life balance and 12% mentioned job security.

Growing uncertainty in Ghana

From a stable confidence level in Q1’18, Ghana dropped 12 points this quarter to 108, the lowest since quarter 3, 2016.

Mr Sun comments; “Though consumer confidence in Ghana has declined in Q2’18, it still leans on the positive side, 100 being the neutral point on the index. The declining economic growth in Ghana, subdued performance in the non-oil and industrial sector, and poor agricultural performance has led to declining confidence levels this quarter.”

He adds that this uncertain sentiment is reflected by the six point drop in Ghanaians, down to 79%, who describe the state of their personal finances over the next year as excellent or good, and 17% (increase of 10% from Q1’18) who say that state of their personal finances is “not so good” or “bad”.

“It’s therefore no surprise that Ghanaian consumers’ immediate-spending intentions have declined, with only 35% of respondents (down from 48% in Q1’18) who say now is a good or excellent time to purchase what they need or want, versus the 61% who said it was not,” reports Mr Sun.

This declining sentiment is also reflected in Ghanaians’ job prospects, which has dropped 11 points to 54% who view them as excellent or good and a 10 point rise to 39% who think their job prospects are not so good or bad compared to the previous quarter.

Disposable income

Looking at whether Ghanaians have spare cash to spend, there was an even 50/50 split between those respondents who said yes and no. Looking at what their spending priorities are once they do have spare cash, the highest number 78% would spend it on home improvements, 77% would put it into savings and 61% would spend on new clothes.

When asked about the changes in their spending to save on household expenses, compared to this time last year, 61% of Ghanaians agreed that they have changed their spending habits. In terms of the actions they took to save money last year, the highest number (49%) said they spent less on at home entertainment, followed by 48% who took less holidays, 32% who delayed the replacement of major household items and 31% who spent less of new clothes.

The factors driving this more cautionary mindset are embodied in Ghanaians biggest and second biggest concerns over the next six months. The highest number of respondents (14%) said health is their biggest concern, followed by work/life balance (13%), and food prices and the economy (both at 12%).

When asked about their second biggest concern over the next six months, 16% of respondents said work/life balance, 12% said their kids’ education/welfare, and food prices and higher fuel prices both recorded 11%.

Elaborating on these results, Sun says: “Despite the decline in confidence levels, Ghana’s outlook is still positive. A strong domestic demand and favourable performance on oil, cocoa, and gold, coupled with ongoing investment in the country, gives hope for a brighter second half in 2018 for the country, resulting in a revival of consumer sentiments and spend”.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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Economy

Stock Market Grows 0.79% as Investors Buy Guinness Nigeria, Others

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guinness nigeria

By Dipo Olowookere

It was a good day for the stock market in Nigeria as it appreciated by 0.79 per cent on Friday to bring the year-to-date return to 0.66 per cent.

This was influenced by renewed interest across most of the sectors of the market, though the insurance index declined by 2.15 per cent when trading activities ended for the session.

Business Post reports that the banking counter appreciated by 1.97 per cent, the consumer goods space grew by 0.70 per cent, the industrial goods sector gained 0.09 per cent, and the energy counter closed flat.

Yesterday, the All-Share Index (ASI) increased by 810.26 points to 103,598.46 points from the preceding day’s 102,788.20 points and the market capitalisation by N497 billion to N63.645 trillion from Thursday’s N63.148 trillion.

Chellaram was the biggest price gainer on Friday after it chalked up 10.00 per cent to trade at N4.07, Guinness Nigeria also appreciated by 10.00 per cent to N77.00, SCOA Nigeria improved by 10.00 per cent to N3.96, Transcorp Power jumped by 7.96 per cent to N349.80, and Lasaco Assurance went up by 7.19 per cent to N3.28.

Conversely, Neimeth was the biggest price loser as it shed 9.88 per cent to N3.10, John Holt declined by 9.78 per cent to N8.30, International Energy Insurance depleted by 9.74 per cent to N1.76, Sovereign Trust Insurance fell by 9.40 per cent to N1.06, and Austin Laz lost 9.00 per cent to close at N1.82.

As for the activity chart, a total of 576.4 million stocks valued at N9.0 billion in 11,546 deals compared with the 394.4 million stocks worth N22.8 billion traded in 12,160 deals in the preceding session, indicating a rise in the trading volume by 46.15 per cent, and a decline in the trading value and number of deals by 60.53 per cent and 5.05 per cent.

Secure Electronic Technology was the busiest equity with 202.2 million units worth N151.8 million, Nigerian Breweries traded 42.1 million units valued at N1.3 billion, Japaul exchanged 34.6 million units for N79.7 million, Access Holdings sold 32.2 million units valued at N807.0 million, and Sovereign Trust Insurance traded 17.0 million units worth N18.3 million.

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Economy

Nigeria’s OTC Exchange Jumps 0.42%

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Nigerian OTC securities exchange

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.42 per cent gain on Friday, January 24 after three equities ended on the advancers’ chart at the close of business.

Nipco Plc gained N15.01 during the trading day to close at N165.11 per share versus N150.10 per share of the preceding session, Okitipupa Plc added N4.79 to end the session at N52.69 per unit compared with Thursday’s trading value of N47.90 per unit, and Central Securities Clearing System (CSCS) Plc expanded by 80 Kobo to trade at N24.00 per share, in contrast to the N23.30 per share it was sold a day earlier.

The gains recorded by these stocks pushed the value of the bourse higher by NN7.41 billion to N1.775 trillion from the N1.767 trillion recorded in the preceding session and the NASD Unlisted Security Index (NSI) grew by 6.93 points to wrap the session at 3,133.20 points compared with 3,120.13 points recorded in the previous session.

Yesterday, the price of FrieslandCampina Wamco Nigeria Plc went down by 92 Kobo to end the session at N38.58 per share, in contrast to the previous day’s N39.50 per share.

The volume of securities traded in the session decreased on Friday by 95.9 per cent to 16.3 million units from 407.4 million units, the value of shares traded yesterday slumped by 97.4 per cent to N10.2 million from N391.2 million units, and the number of deals declined by 23.3 per cent to 23 deals from 30 deals.

Impresit Bakolori Plc was the most active stock by value (year-to-date) with 406.5 million units worth N386.1 million, followed by FrieslandCampina Wamco Nigeria Plc with 4.3 million units valued at N170.4 million, and Geo-Fluids Plc with 9.1 million units sold for N44.3 million.

Impresit Bakolori Plc was also the most active stock by volume (year-to-date) with 406.5 million units worth N386.1 million, trailed by Industrial and General Insurance (IGI) Plc with 26.3 million units sold for N6.3 million, and Geo-Fluids Plc with 9.2 million units valued at N44.3 million.

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Economy

Naira Appreciates to N1,531/$1 at NAFEM, N1,660/$1 at Parallel Market

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old Naira notes

By Adedapo Adesanya

The Naira extended its recent gaining spree by 1.12 per cent or N17.39 on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, January 24.

Yesterday, the local currency was traded in the official market at N1,531.20/$1 compared with the preceding trading day’s value of N1,548.59/$1.

The recent appreciation aligns with expectations that the Naira will appreciate in the first quarter of the year, backed by continued policy support by the Central Bank of Nigeria (CBN), with the latest being the launch of the FX Code due next week to enhance transparency in the market.

Also, the domestic currency improved its value against the Pound Sterling in the spot market on the last trading day of the week by N8.97 to quote at N1,903.24/£1, in contrast to Thursday’s exchange rate of N1,912.21/£1 and against the Euro, it gained N8.72 to finish at N1,605.17/€1 versus the preceding day’s N1,613.89/€1.

In the same vein, the domestic currency appreciated against the American Dollar in the parallel market yesterday to sell for N1,660/$1 compared with the N1,665/$1 it was traded a day earlier.

In the cryptocurrency market, there was profit-taking following earlier euphoria around US President Donald Trump’s ambitious “Stargate Project” announcement, which is a $500 billion commitment to enhancing the US AI infrastructure.

Crypto commentators believe this signals a shift toward reduced oversight with the pledge unveiled on Tuesday, bringing together tech giants OpenAI, Oracle, and SoftBank with an initial commitment of $100 billion, scaling to $500 billion over four years.

Solana (SOL) dipped by 4.9 per cent to trade at $247.14, Ethereum (ETH) dropped 2.8 per cent to $3,290.29, Dogecoin (DOGE) fell by 2.4 per cent to $0.3488, and Cardano (ADA) slid by 2.1 per cent to $0.9763.

Further, Ripple (XRP) went down by 1.9 per cent to $3.11, Binance Coin (BNB) shrank by 0.7 per cent to $687.71, and Bitcoin (BTC) declined by 0.6 per cent to $104,369.28, while Litecoin (LTC) appreciated by 3.9 per cent to $121.63, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

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