The Pentad – Urban Retail Price Tracker September 2017
- The month of August saw mixed retail price stories across our coverage segments with the overall concussion ultimately translating to an increase in the PURP index (0.7% MoM to 99.5 ppts)—with the bulk of the pressures occurring in the second and third week of the review month.
Key summary of outcomes
- After two consecutive monthly decelerations, the PURP index expanded 0.7% MoM over August to indicate renewed price pressures across our retail baskets.
- Survey result showed a steep decline (-2%) in the first week of August followed by a cumulative 6% increase in prices in the second and third week of the review period.
- Whilst the initial decline in retail prices reinforced our view on the delayed pass-through of increasing FX availability, we think the subsequent increase in retail prices was largely reflective of greater stock-piling ahead of the Eid-el-Kabir celebration.
- Going by the index readings, urban retail prices rose 0.7% over August. (vs +1% MoM July urban inflation reported by NBS).
- Although retail price volatility - as measured by the standard deviation from the mean - reduced by 10.7% MoM in the commodities market, the segment still recorded the largest price volatility across our various coverage.
- Across other sectors, breweries had the least price volatility.
- Overall, going by the developments in the retail end, we believe some coverage companies may have succeeded in further nudging prices higher in August to retain strong pass-through to top-line.
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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