December Inflation - Export pressures on grain harvests prod CPI higher
- Inflation closes 2016 on a whimper: The National Bureau of Statistics (NBS) released
the final monthly CPI reading for 2016, which showed that inflation inched 7bps
higher to 18.55% in December—5bps ahead of our forecast.
- Food inflation prints at four year peak on higher export demand: Looking through
breakdowns, price pressures emanated mainly from food inflation (+20bps from
prior reading to 17.39% YoY) while core inflation (-10bps from prior month to
18.1% YoY) once again moderated in line with expectation.
- Elevated readings to persist in January 2017 on food pressures, but…Going forward, our
near-term inflationary forecast is broadly hinged on sustained export
demand-pull pressures on the food basket, for which numbers trickling in
suggest that ongoing trade restriction has failed to address.
- …2016 base effects pose high hurdles to CPI run rate: However, beyond January, which we expect to produce peak monthly CPI in 2017, we think base effects inherent in 2016’s shocks to fuel and electricity prices pose headwinds to headline inflation tracking higher.
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
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