The Pentad – Urban Retail Price Tracker February 2019
- Our Urban Retail Price Tracker – the PURP index – recorded a modest pace of price increase of 0.42% MoM to 111.3 pts in January (vs 0.45% MoM in December). Price pressure remained more evident in the commodities and consumer basket, with the increase in the latter driven largely by reversal of price discounts following weeks of discount sales. On other fronts, prices were lower across the brewery and oil & gas sectors.
- In the consumer basket, average prices increased by 2.2% MoM largely due to reversal of price discounts following weeks of discount sales. Elsewhere, we noted increases in price of Close Up (+8.1%) and Dangote Pasta (+4.6%) which was not linked to any reversal of price discounts. Current price of Close Up now match the price of its closest competitor, Oral B. On the other hand, the increase in price of Dangote pasta now places it at a premium to Honeywell and Golden penny pasta.
- Prices in the brewery basket moderated slightly by 0.10% MoM as competition remained stiff in the sector. Price moderation was more evident in Goldberg (-1.2% MoM) and Satzenbrau (-0.6% MoM).
- Average price in the commodities basket remained elevated over January with prices rising by 0.57% MoM. Importantly, Palm Oil prices extended its rally into the month following festive period induced price hike. Nonetheless, prices are almost 10% lower compared to same period in the prior year. Similarly, vegetable oil prices were during the period. In a different trend, average price of rice moderated over January. Despite incessant floods, bumpy harvest continued to support crop production and supply during the period.
- Prices in the oil & gas sector witnessed moderated over January with average prices down by 0.78% MoM largely on the back of lower Cooking Gas price (-2.3% MoM). We believe this is largely due to increased domestic and foreign supply.
- Prices in the cement sector increased by 1.0% MoM following a decline in the previous month. On other fronts, activities in the cement sector picked up slightly relative to December gauged by demand for cements over the period.
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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