The Pentad – Urban Retail Price Tracker December 2018
- Our Urban Retail Price Tracker – the PURP index – recorded a modest pace of price increase of 0.18% MoM to 110.4 pts in November (vs 0.61% MoM in October). The slowdown reflects combination of price discounts in the black Friday sale, lower cooking gas price and adequate supply of commodity products in the month. Prices in the consumer and oil & gas baskets were lower while prices in the cement and commodities baskets were higher. Meanwhile, prices were flat in the brewery basket.
- In the consumer basket, average prices moderated by 0.24% MoM largely due to price discounts during the Black Friday sales. However, the pace of decline was much lower than expected as prices of some products were adjusted slightly higher before the black Friday sales.
- Prices in the brewery basket stayed flat (+0.06% MoM) over the month as competition remained stiff in the sector. From our feedback across retailers, we observed Spirits are now adding to the pressure on demand for beers due to its cheaper price, readily availability and packaging.
- Price pressure in the commodities basket dissipated over November with prices rising slightly by 0.21% MoM. Importantly, palm oil prices moderated 0.22% after staying flat for three consecutive months. This is in contrast with the previous period last year, where palm oil prices spiked ahead of the festive period. The lower prices continued to reflect robust supply in the market. Elsewhere, prices of rice were stable over the month due to adequate supply in the market. Meanwhile, prices of vegetable oil climbed higher by 0.27% MoM.
- Prices in the oil & gas sector witnessed a moderation over November with average prices down by 0.19% MoM. We believe this is largely due to increased domestic and foreign supply. Elsewhere, lubricant prices tracked higher by 0.29% over the month.
- In the cement sector, prices increased by 0.94% MoM after two consecutive quarters of decline. We saw lower demand during the month, as the rate of capex spend across levels of government dissipates ahead of the general election.
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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