The Pentad – Urban Retail Price Tracker October 2018
- Our Urban Retail Price Tracker—the PURP index— recorded an increase of 01% MoM to 109.5 pts in the month of September (vs 0.60% MoM in August). Higher prices in the month reflected elevated prices across the Consumer, commodities, brewery and oil & gas baskets. On other fronts, prices in the cement sector moderated over the month.
- Average prices in the consumer sector advanced higher by 2% MoM for the second consecutive month. Most of the increase reflected higher price of Lipton (+11.1%), Goldenmorn (+12.6%) and Knorr (+6.2%).
- The commodities basket increased 86% MoM in September for the seventh consecutive month. Price increase under this basket reflected a jump in prices of rice (+1.7% MoM) which retailers attributed to tensed restriction on importation of foreign rice. Contrary, there was no scarcity of rice due to smuggling activities but retailers took this as an advantage to increase price. Prices of vegetable oil also advanced higher by 0.57% MoM. Palm oil price, on the other hand stayed flat over the month following a slight uptick in August. However, based on our findings, we have begun to see slight increase across some markets in the early weeks of October.
- The brewery basket reversed last month’s decline by expanding 21% MoM. The increase was more evident in prices of Satzenbrau (0.91% MoM) and Star (0.40% MoM). Feedback from retailers showed that prices of Value beers continued to put pressure on volumes of Premium brands.
- Prices in the oil & gas sector witnessed a dramatic increase with average prices up by 59% MoM largely due to higher prices of cooking gas (+12.43%). We believe this is largely due to higher oil price (+7% MoM to $79) over the month. Similarly, lubricants prices expanded at a moderate pace of 1.2% MoM.
- Prices in the cement sector moderated lower by 5% MoM. On volumes, retailers noted lower sales volume on the back of higher rainfall in the month. Update on the cement sector over the month saw Dangote Cement launched a new product named BlocMaster cement.
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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