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?

CBN floats Niara

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

Weekly Economic Index

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

  1. FBN Holdings Plc
  2. UACN Property Development Co. Limited
  3. Axamansard Insurance Plc
  4. May & Baker Nigeria Plc
  5. Champion Brew. Plc.

Top five price Decliners

  1. 7-Up Bottling Comp. Plc.
  2. Linkage Assurance Plc
  3. Oando Plc
  4. Seplat Petroleum Development Company Ltd
  5. 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:

  1. Neimeth Int’l Pharmaceuticals Plc
  2. Vitafoam Plc
  3. Greif Nigeria Plc
  4. United Capital
  5. Nigerian Breweries
  6. Transcorp Hotels Plc
  7. Africa Prudential
  8. Zenith Bank
  9. Dangote Cement
  10. Nestle Nigeria
  11. Access Ban
  12. Guaranty Trust Bank
  13. Total Nigeria Plc
  14. Lafarge Africa Plc
  15. Custodian and Allied Plc
  16. MRS Oil Nigeria Plc
  17. United Bank for Africa Plc
  18. GlaxoSmithKline Consumer Nig. Plc
  19. Unilever Nigeria Plc
  20. FCMB Group Plc
  21. Dangote Sugar Refinery Plc
  22. Stanbic IBTC Holdings Plc
  23. Pharma-Deko Plc
  24. UACN Plc
  25. AIICO Insurance Plc
  26. Chemical and Allied Products Plc
  27. Trans-Nationwide Express Plc
  28. AXA Mansard Insurance Plc
  29. Mobil Oil Nigeria Plc
  30. Beta Glass Plc
  31. Infinity Trust Mortgage Bank Plc
  32. Okomu Oil Palm Company Plc
  33. NASCON Allied Industries Plc
  34. O.C. Gases Plc
  35. Learn Africa Plc
  36. NEM Insurance Plc
  37. Nigerian Aviation Handling Company Plc
  38. Med-View Airline
  39. Fidelity Bank
  40. Okomu oil
  41. Regency Alliance
  42. Presco Plc
  43. Consolidated Hallmark Insurance Plc
  44. Nestle Nigeria Plc
  45. Aluminium Extrusion Industries Plc
  46. Berger Paints Plc.
  47. FBN Holdings Plc.
  48. NPF Microfinance Bank
  49. Newrest ASL Nig
  50. UAC of Nigeria Plc
  51. Chemical and Allied Products Plc
  52. Continental Reinsurance Plc
  53. Ashaka Cement
  54. Smart Products Nigeria Plc

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