Economy
Nigeria’s PMI dips to 49.2 in July 2024
Nigeria’s Purchasing Managers Index (PMI) fell below the 50-point threshold to 49.2 points in July 2024 from 50.1 points in June 2024. The July 2024 decline represents the third consecutive decline in Nigeria’s PMI, indicating stress on the private sector and declining manufacturing sector activities. In our view, private sector activities may remain under pressure without coordinated monetary and fiscal policies to address the rising input costs and other supply-side bottlenecks that continue to weigh in on business activities.
CBN Commences Dollar Auction
The Central Bank of Nigeria (CBN) commenced the Retail Dutch Auction System (rDAS) on August 8, 2024. The auction system was introduced due to rising demand for foreign exchange in banks and mounting pressure on the naira. In total, 32 banks sent in bids valued at $1.18bn at the auction; only bids from 26 banks valued at $876.26m were approved. Bids from 6 banks valued at $313.69m were disqualified due to late bid submission and/or use of the wrong template. While the auction aimed to ease the demand pressure in the FX market and foster price discovery, its appreciation effect has been observed in the near term, coupled with a rise in FX turnover. We expect the rDAS to contribute to a stable FX market and a rise in capital importation and diaspora remittances.
FG Suspends Registration for N40,000 Subsidized Rice
The Federal Government of Nigeria disclosed its decision to halt civil servants’ registration to obtain 50kg bags of rice at N40,000. Whereas the policy was aimed at cushioning the cost-of-living crisis in the economy, kicking off with the civil servants, actions or inactions that led to the suspension and the length of the suspension have not been provided, underscoring another policy backtrack. Analysts have expressed concerns that the inconsistency in policies could be a major undoing of the current administration, as such a flip-flop could dent investment inflow and heighten the cost-of-living crisis.
Table 1: Global Economic Spotlight This Week
| Indicator | Decision | What to Expect |
| Eurozone PMI for July 2024 | 51.9 unchanged from June 2024 | Stagnation of PMI to linger due to war in Europe and energy cost |
| South Africa PMI for July 2024 | 49.3 from 49.2 in June 2024 | Trend to persist with moderating economic conditions |
| UK PMI for July 2024 | 52.8 increase from 52.7 in June 2024 | Trends to persist with moderating economic conditions |
| US PMI for July 2024 | 54.3 declined from 55 in June 2024 | Stagnation to persist amidst a volatile economy |
| Egypt Inflation for July 2024 | 25.7% from 27.5% in June 2024 | Rates to remain hawkish with inflation above target |
| Ghana PMI for July 2024 | 50.1 from 49.7 in June 2024 | Output and investment increase to drive GDP growth |
| Canada PMI for July 2024 | 55.3 from 62.4 in June 2024 | PMI to support output and trade surplus as seen this week |
| China Consumer Price Index for July 2024 | 0.5% from -0.2% in June 2024 | Volatile condition and property crisis to persist in economy |
Table 2: Global Economic Spotlight in The Week Ahead
| China FDI in July 2024 (YoY) | Monday, August 12, 2024 |
| Angola Inflation for July 2024 | Monday, August 12, 2024 |
| South Africa Unemployment Rate | Tuesday, August 13, 2024 |
| UK Inflation for July 2024 | Wednesday, August 14, 2024 |
| Ghana Inflation for July 2024 | Wednesday, August 14, 2024 |
| Eurozone Unemployment Data | Wednesday, August 14, 2024 |
| Eurozone GDP for Q2 2024 | Wednesday, August 14, 2024 |
| US Inflation for July 2024 | Wednesday, August 14, 2024 |
| Japan GDP for Q2 2024 | Wednesday, August 14, 2024 |
| Nigeria Inflation for July 2024 | Thursday, August 15, 2024 |
| UK GDP for Q2 2024 | Thursday, August 15, 2024 |
Source: Various Economic Calendars,
Proshare Research
Commodity Market
Global Commodities
The global commodity market traded mixed for the week, with Brent and WTI up by 3.63% and 4.78%, respectively, as tension continued in the Middle East. Gold and Silver were down -0.04% and -3.14%, respectively, as recent economic/job data suggest the Fed may stick to its Sept plan for a rate cut. While Platinum was down -4.16%, Palladium gained 1.47%. (see table 3 below).
Table 3:
Local Commodities
AFEX commodity market closed mixed with Sorghum down -1.25%, Cashew down -5.32%, and Cocoa down -0.04%, while Maize and Soybeans gained 0.18% and 1.12%, respectively. Other commodities traded on the AFEX commodity market, such as Ginger, Sesame, Paddy rice, and Wheat, remained flat for the week (see table 4 below)
Table 4:
Eko Gold and Head Rice at the LCFE ended the week stable at N88,550.00 per gram and N72,000.00 per gram (see table 5 below)
Table 5:
We expect commodity prices to maintain similar performance in the coming week
Fixed Income Markets
Currency Market
The value of the naira to the dollar appreciated by 272bps (week-on-week) to close at N1574.20/US$ from N1,617.08/US$ last week (see Table 6 below).
Table 6: Naira/Dollar at NAFEM
| August 02, 2024 | August 09, 2024 | W-o-W% Change | |
| NAFEM | 1,617.08 | 1,574.20 | 2.72 |
Source: FMDQ,
Proshare Research
Money Market
Market liquidity tightened this week, raising interbank rates. The Open Repo Rate (OPR) and the Overnight rate (O/N) rose by 2813bps and 3264bps to 33.39% and 33.97% respectively (see Table 7 below).
Table 7: Money Market
| August 02, 2024 | August 09, 2024 | W-o-W % Change | |
| OPR (%) | 26.06 | 33.39 | 28.13% |
| O/N (%) | 25.61 | 33.97 | 32.64% |
Source: FMDQ,
Proshare Research
We expect rate to hover around current levels
Nigerian Treasury Bill
The Nigerian treasury bill market traded on a calm note this week. The selloffs outweighed demand, nudging the average benchmark yield upward by 283bps week-on-week to 25.98%.
The OMO Bill’s average benchmark yield rose by 312bps week-on-week to 25.11 from 24.35% the previous week (see Table 8 below).
Table 8: Average Benchmark Yields of the Treasury Bills Market
| August 02, 2024 | August 09, 2024 | W-o-W % Change | |
| OPR (%) | 26.06 | 33.39 | 28.13% |
| O/N (%) | 25.61 | 33.97 | 32.64% |
Source: FMDQ,
Proshare Research
We expect more activity next week as liquidity improves.
Nigerian Treasury Bill Auction.
The Debt Management Office offered N216.09bn and had a total subscription of N486.87bn. The oversubscription was skewed at 91-day and 364-day papers, while 182-day had an undersubscription. The DMO eventually sold N216.09bn, which is exactly the amount offered. The stop rates for 91-day and 182-day papers stayed flat at 18.50% and 19.50%, respectively, while the 364-day declined to 21.88% (see Table 9 below).
Table 9: Nigerian Treasury Bill Auction Result August 07, 2024
| Tenor | Amount offered (N’bn) | Total Subscription (N’bn) | Amount Sold (N’bn) | Stop Rate (%) | |
| 91-day | 16.59 | 21.83 | 20.75 | 18.50 | |
| 182-day | 51.35 | 33.46 | 32.62 | 19.50 | |
| 364-day | 148.15 | 431.58 | 162.72 | 21.88 |
Source: CBN,
Proshare Research
FGN Bond Market
The local bond market sustained the bearish trend, with selloffs witnessed at the short and mid papers, overshadowing the cherry-picking at the long end of the curve. Thus, the average benchmark yield rose by 107bps to 19.82% from 19.61% (see Table 10 below).
Table 10: Average Benchmark Yields of the FGN Bonds
| August 02, 2024 | August 09, 2024 | W-o-W % Change | |
| Short Tenor | 20.76 | 21.25 | 2.38% |
| Mid Tenor | 19.87 | 20.10 | 1.18% |
| Long Tenor | 18.50 | 18.48 | -0.12% |
Source: FMDQ,
Proshare Research
We expect the selloffs to persist as investors anticipate July inflation figures.
Equity Market
- With a mix of profit-taking and cherry-picking in some stocks, largely tilted to the bulls, the Nigerian equities market gained in four of the five trading sessions for the week.
- The All-Share Index (ASI) rose +0.87% to close the week at 98,592.12 points from 97,745.73 points the previous week (see chart 1 below).
Chart 1: Movement of NGXASI Index December 29, 2023 – August 9, 2024
Source: NGX,
Proshare Research
- Investors gained N480.83bn as market capitalisation rose to N55.98trn from N55.50trn the previous week.
- The Financial Services Industry led the activity chart with 1.982 billion shares valued at N31.985 billion traded in 23,467 deals. Investors on the exchange floor traded a total turnover of 2.679 billion shares worth N49.017 billion in 47,451 deals this week, from 3.39bn shares valued at N52.30bn that exchanged hands last week in 44,814 deals.
- The market appreciated due to gains made from MTNN (5.16%), ZENITH (+7.92%), FBNH (+9.76), Oando (+60.47%), NIG-BREW (+19.23%) and SAHC (+26.47%) outweighing losses in BUACEMENT (-9.99%), TRANSCOHOT (-0.03%) and NESTLE (-1.81%).
- Of the twenty-three indices under our coverage for the week, eighteen appreciated, led by the NGX AFR Div Yield Index; three closed negatively, led by the
- Proshare Samad Index, while two others closed flat (see Table 11 below).
Table 11: Sectoral Index Performance as of August 9, 2024(%)
| INDEX | WTD | MTD | QTD | YTD |
| NGX AFR Div Yield Index | 11.02 | 18.37 | 19.28 | 71.16 |
| NGX Growth Index | 9.08 | -3.44 | -7.14 | -17.79 |
| NGX MERI Growth Index | 7.95 | 12.15 | 7.38 | 8.41 |
| NGX-AFR Bank Value Index | 6.35 | 9.6 | 4.17 | -5.14 |
| NGX Banking Index | 5.14 | 6.96 | 3.26 | -4.45 |
| NGX CG Index | 4.91 | 5.64 | 0.86 | 1.75 |
| NGX Pension Index | 3.48 | 4.07 | 0.63 | 16.81 |
| NGX MERI Value Index | 3.35 | 4.04 | 2.17 | 37.11 |
| NGX Premium Index | 2.53 | 1.85 | -5.7 | 28.7 |
| NGX Lotus II | 2.46 | 2.47 | -1.25 | 34.4 |
| Proshare Toni Index | 2.42 | 2.32 | -2.45 | 155.84 |
| NGX Consumer Goods Index | 2.35 | 1.88 | -2.73 | 37.19 |
| NGX Insurance Index | 1.79 | 2.6 | -0.03 | 21.39 |
| NGX Oil/Gas Index | 0.97 | 3.5 | 9.25 | 50.89 |
| NGX All-Share Index (ASI) | 0.87 | 0.84 | -1.46 | 31.85 |
| NGX 30 Index | 0.79 | 0.76 | -1.85 | 30.52 |
| NGX Pension Board Index | 0.58 | 0.57 | -2.08 | 32.56 |
| Proshare Gote Index | 0.36 | 0.00 | -10.18 | 68.80 |
| NGX ASeM Index | 0.00 | 0 | 5.26 | 147.63 |
| NGX Sovereign Bond Index | 0.00 | 0 | -4.35 | -3.56 |
| NGX-Main Board Index | -0.09 | 0.26 | 1.21 | 37.22 |
| NGX Industrial Goods Index | -3.67 | -3.65 | -9.03 | 57.51 |
| Proshare Samad | -4.14 | -4.14 | -4.14 | 65.58 |
Corporate Earnings for The Week Ended August 09, 2024
Of the three corporate earnings released this week, two recorded a growth in profitability. Notably, despite a drop in revenue by Academy Plc, its PAT rose over 1000% driven by its cost-cutting strategy that moderated the cost of sales by close to 50% in the Q1 2025 reporting period (see Table 12 below).
Table 12:
| Ticker | Period | Current Revenue | Previous Revenue | % Chg Revenue | Current PAT | Previous PAT | % Chg PAT |
| ACADEMY | Q1 25 | 1,852 | 1,944 | -4.73% | 519 | 38 | 1,258.42% |
| BAPLC | H1 24 | 77,290 | 24,893 | 210.49% | 2,945 | 1,675 | 75.82% |
| GUINEAINS | H1 24 | 2,077 | 1,390 | 49.42% | 478 | (83) | -675.90% |
NASD OTC EXCHANGE – Unlisted Equities
- The benchmark NASD Securities Index (NSI) dipped -0.93% to close at 1,456.53 points from 1,470.23 points the previous week, while market capitalisation fell to N2.00trn.
- The negative performance was driven by losses in AFRIPROP (-0.31%), ARADEL HOLDINGS (-0.81%), FC WAMPCO (-6.25%) and CSCS (-7.50%), which outweighed gain from PREI (+10.00%) (see table 12 below).
Table 13: NASD W-o-W Change
| Parameter | August 2, 2024 | August 9, 2024 | W-o-W Changes (%) | |
| NASD NSI | 1470.23 | 1,456.53 | -0.93 | |
| Mkt Capitalization (N’bn) | 2.01 | 2.00 | -0.93 | |
| Volume Traded | 13,351,825 | 6,981,765 | -47.71 | |
| Value Traded (000) | 2,585,879.19 | 3,614,782.05 | 39.79 | |
| Deals Executed | 219 | 230 | 5.02 | |
Source: NGX,
Proshare Research
Proshare Indices
The Gote Index rose +0.36% w-o-w on renewed buying interest in NASCON and DANGSUGAR, while DANGCEM closed flat (see Table 13 below).
Table 14: Gote Index W-o-W
| Company | August 2, 2024 | August 9, 2024 | W-o-W Changes (%) |
| DANGSUGAR | 34.00 | 36.70 | 7.94 |
| NASCON | 29.50 | 31.50 | 6.78 |
| DANGCEM | 591.10 | 591.10 | 0.00 |
| Total | 308.03 | 309.13 | 0.36 |
Source: NGX, Proshare Research
The Toni index gained +2.42% to close the index at 1254.31 points buoyed by gains in TRANSCORP, UCAP, and UBA which net off the losses in TRANSPOWER and TRANSCOHOT while AFRIPUD closed flat (see Table 14 below).
Table 15: Toni Index W-o-W
| Company | August 2, 2024 | August 9, 2024 | W-o-W Changes (%) |
| UCAP | 12.15 | 15.95 | 31.28 |
| UBA | 20.05 | 23.00 | 14.71 |
| TRANSCORP | 11.20 | 11.30 | 0.89 |
| AFRIPRUD | 9.40 | 9.40 | 0.00 |
| TRANSCOHOT | 98.40 | 98.30 | -0.10 |
| TRANSPOWER | 373.90 | 372.40 | -0.40 |
| Total | 1224.69 | 1254.31 | 2.42 |
Source: NGX,
Proshare Research
Samad Index
The Samad Index snapped its months-long flat position, slipping -4.15% on selloffs in BUACEMENT while BUAFOOD remained flat for the week (see Table 15 below).
Table 16: Samad Index W-o-W
| Company | August 2, 2024 | August 9, 2024 | W-o-W Changes (%) |
| BUA CEMENT | 143.20 | 128.90 | -9.99 |
| BUA FOOD | 379.90 | 379.90 | 0.00% |
| Total | 364.34 | 349.23 | -4.15% |
Source: NGX,
Proshare Research
We expect a mix of buying interests and sell pressures in the coming week as investors reassess their portfolios
