July Inflation: Lower food prices remained the anchor
- As anticipated, headline inflation took downward trajectory for the month of July printing at 11.08% YoY (June: 11.22% YoY), albeit lower than our expectation of 11.18% by 10bps. In our H2 2019 Nigeria strategy report (NSR), we highlighted the confluence of buoyant market supplies, reduced risk of flooding, curtailed bandit attacks in the North and stable PMS prices would steer the downward trend in consumer prices over the rest of the year. True to our words, food inflation dipped by 17bps to 13.39% YoY due to decline in prices of farm produce. According to FEWSNET, the ongoing green harvest which came in earlier than usual, further amplified market supply, driving a decline in food prices over the period. Also, Core Inflation further moderated by 4bps to 8.80% YoY reflecting the curtailed nature of PMS prices.
- Month-on-Month, headline inflation followed a similar pattern, declining by 6bps to 1.01% MoM. Food inflation came in 11bps lower to 1.26% MoM, reflecting lower prices of farm produce and processed foods. Imported food inflation at the other end remained flat, printing at 1.26% MoM, reflecting continued gains on currency. On the flipside, core inflation edged up 3bps to 0.87% MoM mirroring slight increases in diesel and kerosene prices. Delving into the core basket, key sub-indices such as HWEGF and Transport inflation flatlined, clothing and alcoholic beverages declined while Furnishing and Restaurant increased slightly.
- More analysis to follow.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.