Since the global oil price crash in 2014, Nigeria has been one of the hardest-hit economies due to its over-dependence on oil as its main source of revenue. China’s economic slowdown, as well as the United States’ rate hike, also affected its economy adversely. As a result, Nigeria’s economic growth has declined dramatically, with its currency falling to an all-time low. As a result of the new monetary policies, investors are pulling out regularly as most of them are scared to leave their investments in the country. The Central Bank of Nigeria (CBN) put in stringent policies to help save the Naira from falling but all efforts seem to have backfired.
However, it looks like that is all about to change as the CBN, which once showed that its decisions were not independent of the federal government, seems to be taking a different turn. But it is still uncertain if the CBN will be able to sustain some of its recent policies, which are geared towards saving the Naira from falling.
Below is the Ventures Africa Weekly Economic Index, for the week ending 2nd of June 2017. This economic index gives you a glimpse into the recent activities in Nigeria’s economy as well as changes that could affect the economy:
Did the price of crude oil change?
The OPEC weekly basket price revealed that between 29th of May and 1st of June 2017, the price of crude oil decreased from $49.67 per barrel to $48.85 per barrel. Oil fundamentals are tightening now, but could be worse by 2018.
Oil prices fell more than 1 percent on Friday, posting a second straight week of losses. This is happening because of the worries that U.S. President Donald Trump’s decision to abandon a climate pact could spur more crude drilling in the United States. This could lead to worsening a global glut.
How low is the external reserve?
Data from the website of the Central Bank of Nigeria reveals that as of 31st May 2017, Nigeria’s external reserve increased by $131.92 million to $30.330billion from $ 30.462billion recorded on 26th May 2017.
According to available data, the reserve rose steadily by $7.06 billion from $23.93 billion on October 24 last year to $30.99 billion on May 4 when it commenced its steady decline. The reserve grew by $819 million in November, $1.07 billion in December, $2.33 billion in January and by $1.47 billion in February. However the reserve dropped by $645 million in March, while it also grew by $573 million in April.
How did the Naira fare?
During the week under review, the Naira appreciated further against the dollar at the parallel market to 364 Naira/$ on Friday 2nd June 2017, from 375Naira/$ recorded on Friday 26th May 2017.
The CBN has injected about $5 billion into the forex market since February, in a bid to ensure stability in the forex market.
During the week under review, it injected $482.6 million into the market. The sum of $285,779,350 was allocated to the retail Secondary Market Intervention Sales (SMIS), while $100 million was offered in the Wholesale SMIS auction window. The Small and medium sized enterprises (SMEs) window received an allocation of $52 million, while the sum of $45 million was allocated to the Invisibles segment, comprising Basic Travel Allowance (BTA), Personal Travel Allowance, medicals and tuition fees, among others.
What happened to the Purchasing Managers’ Index (PMI)
The Central Bank of Nigeria, on Thursday, 1st of June 2017 released the May 2017 report on Purchasing Mangers Index (PMI) which measures business performance. According to the report, the Manufacturing PMI recorded an increase in activities in May 2017 as it saw a 1.4 index point increase from 51.1 Index Point in April to 52.5 Index point in May. The index is above the 50-benchmark index points and this increase represents a second consecutive month expansion. 10 out of 16 sub-sectors reported growth. These sub-sectors include primary metal; petroleum & coal products; plastics & rubber products; paper products; electrical equipment; appliances & components; textile, apparel, leather & footwear; cement; food, beverage & tobacco products and chemical & pharmaceutical products. The transportation equipment; nonmetallic mineral products; fabricated metal products; printing & related support activities; furniture & related products and computer & electronic products reported a decline in the period under review.
The composite PMI for the non-manufacturing sector grew to 52.7 in May 2017 after 16 consecutive months of contraction. Of the 18 non-manufacturing sub-sectors, 10 recorded growth in the following order: agriculture; transportation & warehousing; educational services; electricity, gas, steam & air conditioning supply; utilities; information & communication; water supply, sewage & waste management; accommodation & food services; healthcare & social assistance; and finance & insurance. The remaining 8 sub-sectors recorded contraction in the order: construction; professional, scientific, & technical services; public administration; management of companies; arts, entertainment & recreation; real estate rental & leasing; repair, maintenance/washing of motor vehicles; and wholesale/retail trade
However, the data further revealed that the PMI for the non-manufacturing sector increased from 49.5 index point recorded in April to 52.7 Index point in May. This index point is above the 50-benchmark index points and first increase above the benchmark after 16 consecutive months of decline. Out of the 18 non-manufacturing sub-sectors, 10 recorded growth in the following order: agriculture; transportation & warehousing; educational services; electricity, gas, steam & air conditioning supply; utilities; information & communication; water supply, sewage & waste management; accommodation & food services; healthcare & social assistance; and finance & insurance. The remaining 8 sub-sectors recorded contraction in the order: construction; professional, scientific, & technical services; public administration; management of companies; arts, entertainment & recreation; real estate rental & leasing; repair, maintenance/washing of motor vehicles; and wholesale/retail trade
The Nigerian Stock Market
According to the recent data released by the Nigerian Stock Exchange, as of 2nd June 2017, the market closed trading on a positive note as the all share index increased 7.94percent from the previous week ending 26th May 2017. Market capitalization at the close of trading was N10.845 trillion up from N10.048 trillion recorded the previous week. The All Share Index for the week under review closed at 31,371.63. This represents an all year high market capitalization.
Top five price Gainers and Decliners in the week under review:
Top five price Gainers
- FBN Holdings Plc
- UACN Property Development Co. Limited
- Axamansard Insurance Plc
- May & Baker Nigeria Plc
- Champion Brew. Plc.
Top five price Decliners
- 7-Up Bottling Comp. Plc.
- Linkage Assurance Plc
- Oando Plc
- Seplat Petroleum Development Company Ltd
- Nigerian Enamelware Plc.
Dividends announced so far in 2017
Tracking companies that have announced their dividends are very important for the country as it affects the share price of the company. This also enables people to know if they are eligible to collect the dividend, when it will be approved and when it will be paid. So far the following companies who have announced the full year reports are:
- Neimeth Int’l Pharmaceuticals Plc
- Vitafoam Plc
- Greif Nigeria Plc
- United Capital
- Nigerian Breweries
- Transcorp Hotels Plc
- Africa Prudential
- Zenith Bank
- Dangote Cement
- Nestle Nigeria
- Access Ban
- Guaranty Trust Bank
- Total Nigeria Plc
- Lafarge Africa Plc
- Custodian and Allied Plc
- MRS Oil Nigeria Plc
- United Bank for Africa Plc
- GlaxoSmithKline Consumer Nig. Plc
- Unilever Nigeria Plc
- FCMB Group Plc
- Dangote Sugar Refinery Plc
- Stanbic IBTC Holdings Plc
- Pharma-Deko Plc
- UACN Plc
- AIICO Insurance Plc
- Chemical and Allied Products Plc
- Trans-Nationwide Express Plc
- AXA Mansard Insurance Plc
- Mobil Oil Nigeria Plc
- Beta Glass Plc
- Infinity Trust Mortgage Bank Plc
- Okomu Oil Palm Company Plc
- NASCON Allied Industries Plc
- O.C. Gases Plc
- Learn Africa Plc
- NEM Insurance Plc
- Nigerian Aviation Handling Company Plc
- Med-View Airline
- Fidelity Bank
- Okomu oil
- Regency Alliance
- Presco Plc
- Consolidated Hallmark Insurance Plc
- Nestle Nigeria Plc
- Aluminium Extrusion Industries Plc
- Berger Paints Plc.
- FBN Holdings Plc.
- NPF Microfinance Bank
- Newrest ASL Nig
- UAC of Nigeria Plc
- Chemical and Allied Products Plc
- Continental Reinsurance Plc
- Ashaka Cement
- Smart Products Nigeria Plc
