May Inflation: Consumer Prices remained pressured in May
- Reflecting our earlier postulation that the confluence of conflict-induced disruption to farming activities, seasonal price increases and fading impact of the decline in PMS prices would drive inflation rate for the month of May higher, data released today by the NBS showed that inflation rate rose 11.40% YoY in May (ARM estimate: 11.39%) from 11.37% YoY in April. Food inflation led the expansion, rising by 8bps MoM to 13.78%, following price increase in farm produce. Specifically, the Ramadan impact coupled with disruption in farming activities buoyed by continued conflict in northern region drove the price increase in farm produce. According to NBS, the price increases were more evident in Kebbi, Bauchi and Kaduna. On the flipside, core inflation continued its moderation, down by 26bps MoM to 9.02%.
- Elsewhere, the month-on-month increases in the price level persisted, rising by 16bps from April to 1.11% in May, mirroring increases in food and core inflation. Food inflation recorded a 26bps increase, printing at 1.40% MoM, spurred mainly by a 30bps expansion in farm produce inflation to 1.53%, which muted declines in processed food.
- Core inflation also inched up by 4bps to 0.74%, largely driven by increases in diesel and kerosene prices both of which more than neutered the flat movement in PMS price. Across the sub-indices, we saw increases in transport (+4ps), clothing (+6bps), furnishing (+6bps), and HWEGF (+3bps).
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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