Economy

Nigeria Records First Rise in Business Activities in 4 Months

Published

4 years ago

13/08/2020

By Dipo Olowookere

For the first time in four months, business activities grew in Nigeria last month, according to the Purchasing Managers’ Index (PMI) of Stanbic IBTC Bank Plc.

In a report made available to Business Post, the lender said the Nigerian private sector recorded an expansion during July, following three successive months of decline as both business activity and new orders increased, but the severity of the coronavirus disease (COVID-19) downturn meant that spare capacity remained evident, leading to a further reduction in employment.

It said the recent surge in prices extended into the second half of the year, with overall input prices rising at the sharpest pace in the survey’s history. In response, firms also raised their output prices at the fastest rate since the survey began in January 2014.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration and the headline PMI for July stood at 50.4 from 46.4 in June.

However, the reading signalled only a slight improvement in business conditions following a severe downturn due to the COVID-19 pandemic.

Signs of improving demand were central to the strengthening of business conditions. New orders increased for the first time in four months. Business activity also returned to growth for the first time since March on the back of higher new orders and an easing of the lockdown.

Despite new orders increasing in the latest survey period, steep declines in previous months meant that excess capacity was still evident. Backlogs of work decreased for the second month running, while firms continued to lower their staffing levels. Employment fell for the fourth successive month, but the rate of job cuts softened from June’s record.

The rate of overall input cost inflation was the sharpest in the survey’s history amid an unprecedented rise in purchase prices. Respondents linked higher purchase costs to currency weakness and shortages of raw materials. Meanwhile, staff costs continued to fall, with panellists reporting wage reductions.

In response to sharply rising cost burdens, companies increased their own selling prices. Moreover, the rate of inflation was the fastest since the survey began in January 2014.

Signs of improving customer demand led companies to expand their purchasing activity and inventory holdings, in both cases for the first time in four months. Stock building efforts were aided by quicker suppliers’ delivery times, reflecting the removal of restrictions on interstate travel and competition among vendors.

Commenting, an Economist at Stanbic IBTC Bank, Mr Gbolahan Taiwo, stated that, “Business activities in the Nigerian private sector returned to expansion territory for the first time since March as output and new orders improved.

“The PMI rose to 50.4 in July from 46.4 in June. Recall the Nigerian government started to ease the COVID-19 containment measures in early May and that has brought about some resumption to economic activities albeit slowly. The output and new orders sub-index expanded for the first time in 4 months at 52 and 52.5 respectively.

“Although we expect business activities in the Nigerian private sector will continue to improve over the coming months, the overall economy will likely still fall into a recession as some parts of the economy, particularly the services sector will still struggle to recover perhaps until a vaccine is found.

“Also, despite the expected quarter-on-quarter growth, the higher base from last year will ensure a year-on-year contraction.

“On a negative front, the employment index remains below the expansion mark of 50 for the fourth consecutive month as companies continue to reduce staffing owing to COVID-19 disruption to economic activities. This will continue to impact negatively on the demand side of growth as aggregate demand and purchasing power of the consumer will remain under pressure.”

Economy

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

Published

2 days ago

25/01/2025

Dipo Olowookere

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.

Economy

Nigeria’s OTC Exchange Jumps 0.42%

Published

2 days ago

25/01/2025

Adedapo Adesanya

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.

Economy

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

Published

2 days ago

25/01/2025

Adedapo Adesanya

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.