Figures from National Bureau of Statistics (NBS) are showing that the country’s headline inflation rate moderates 38 basis points in September to 16.63% year on year from 17.01% year on year in August. According to the data agency, stock market recorded large gain as investors wealth expanded by more than N192 billion amid a slowdown in inflation worries.
This is the fifth consecutive weekly gain as strong buying interest in FBNH (+29.6%), Okomu Oil (+8.2%) and GTCO (+3.5%) drove the All-Share Index 1.4% higher to close at 41,438.15 points. As a result, the month to date and year to date returns rose to +3.0% and +2.0%, respectively, following the bullish reaction from investors on 30 stocks.
Interestingly, the All-Share Index zoomed by 308.17 basis points, a growth of 0.75 per cent to close at 41,438.15 points as investors fear over inflation dissolves as the equity segment of the Nigerian Exchange market capitalisation gained N192.54 billion, a surge of 0.90 per cent to close at ₦21.43 trillion as NGX Group Plc listed 1.96 billion units by Introduction.
For Atlass Portfolios Limited, the market activities traded negatively following the 19.72 per cent and 22.25 per cent decline in the total volume and value traded. A total sum of 728.96 million units of shares valued at ₦8.53 billion was transacted from 4,852 deals.
FBNH again, topped the traded stocks in terms of volume, accounting for 65.37 per cent of the total volume of trades, maintaining the position as the most trading stock, followed by Univinsure (5.44%), GTCO (4.55%), Fidelity Bank (3.00%), and TransCorp (2.85%) to complete the top five on the volume chart.
Also, FBNH appeared as the most traded stock in value terms, with 69.50 per cent of the total value of trades on the exchange.
SCOA led the gainers’ chart to emerge as the most profitable stock, with price appreciation of 9.20 per cent, trailed by Custodian (8.96%), FBNH (8.09%), Presco (4.71%), GTCO (3.86%), BUA Cement (3.05%), ETI (2.22%), NB (1.91%), UBA (0.61%), Total (0.52%) and 20 others.
On the contrary, 8 stocks declined in price led by CHAMS with price depreciation of 8.33 per cent to close at ₦0.22, as WAPCO (-4.74%), AFRIPRUD (-3.62%), Sterling Bank (-3.18%), JAPAUGOLD (-2.08%), and Fidelity Bank (-1.79%) also follow suit.
Friday market breadth closed significantly positive, recording 30 gainers and 8 losers.
This week, analysts at Cordros Capital said they are expecting investors’ sentiment will be shaped by third quarter earnings releases and the outcome of the bond auction scheduled to hold on Wednesday as they seek clarity on the movement of yields in the Fixed Income market.
Consequently, analysts envisage a mixed trading pattern due to bargain hunting activities in dividend-paying stocks amid intermittent profit-taking activities.
The firm is reiterating the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings. Stock Market Records Large Gain as Inflation Worries Slowdown
However, on a month-on-month basis, Nigerian headline inflation increased by 13 basis points to 1.15%. The outturn is 14 basis points higher than Cordros Capital estimate of 16.49% with the largest deviation stemming from the food basket.
Ahead of the September data release, analysts have predicted moderation in consumer price index due to base effect in 2021, rather than strategic policy measures. Today, NBS reported that Consumer Price Index, (CPI) which measures inflation increased by 16.63 per cent (year-on-year) in September 2021.
This is 0.38 per cent points lower than the rate recorded in August 2021 (17.01) per cent. Increases were recorded in all COICOP divisions that yielded the Headline Index.
On a month-on-month basis, the Headline index increased by 1.15 per cent in September 2021, translating to a 0.13 per cent rate higher than the rate recorded in August 2021 (1.02) per cent.
The percentage change in the average composite CPI for the twelve-month period ending September 2021 over the average of the CPI for the previous twelve-month period was 16.83 per cent, showing a 0.23 per cent point from 16.60 per cent recorded in July 2021.
The Urban Inflation rate increased by 17.19 per cent in September 2021 from 17.59 per cent recorded in August 2021, while the Rural Inflation rate increased by 16.08 per cent in September 2021 from 16.45 per cent in August 2021.
On a month-on-month basis, the Urban Index rose by 1.21 per cent in September 2021, up by 0.15 the rate recorded in August 2021 (1.06), while the Rural Index also rose by 1.10 per cent in September 2021, up by 0.11 the rate that was recorded in August 2021 (0.99) per cent
The Composite Food Index rose by 19.57 per cent in September 2021 compared to 20.30 per cent in August 2021. This rise in the food index was caused by increases in prices of oils and fats, bread and cereals, food product N.E.C., fish, coffee, tea and cocoa, potatoes, yam and other tuber and milk, cheese and egg.
On a month-on-month basis, the food sub-index increased by 1.26 per cent in September 2021, up by 0.20 per cent points from 1.06 per cent recorded in August 2021.
The average annual rate of change of the Food sub-index for the twelve-month period ending September 2021 over the previous twelve-month average was 20.71 per cent, 0.21 per cent points from the average annual rate of change recorded in August 2021 (20.50) per cent.
The ‘’all items less farm produce’’ or core inflation, which excludes the prices of volatile agricultural produce stood at 13.74 per cent in September 2021, up by 0.33 per cent when compared with 13.41 per cent recorded in August 2021.
On a month-on-month basis, the core sub-index increased by 1.24 per cent in September 2021. This was up by 0.47 per cent when compared with 0.77 per cent recorded in August 2021.
NBS said the highest increases were recorded in prices of gas, household textile, garments, motor car, game of chance, major household appliances whether electric or not, passenger transport by air, and hospital services.
This includes other services with respect to personal transport equipment, wine, clothing materials, other articles of clothing and clothing accessories, non-durable household goods.
It said the average twelve-month annual rate of change of the index was 12.55 per cent for the twelve-month period ending September 2021; representing 0.26 per cent points higher than the 12.29 per cent recorded in August 2021. Nigerian Inflation Rate Moderates 38 Basis Points in September.