- Nigeria’s business activities contrast in July as PMI drops to 49.7%
The Nigerian Exchange witnessed a continued downturn on Wednesday, as bearish sentiments dominated trading for the third consecutive day.
The All Share Index declined by 0.20 per cent, closing at 97,199.60 points, down from the previous day’s 97,390.01 points.
This brings the year-to-date gain to 31.37 per cent, the month-to-date performance to a negative 0.54 per cent, and the week-to-date to a negative 1.42 per cent.
The market capitalization fell to N55.188trn, reflecting a loss of N108bn compared to the previous trading session.
A total of 315.3m shares were exchanged in 8,365 deals, amounting to a turnover of N5.48bn.
This represents a decline in trading activity, with a 47 per cent drop in volume, a 61 per cent reduction in turnover, and a 26 per cent decrease in the number of deals compared to the previous trading day.
Guinea Insurance led the gainers with a 10 percent increase, closing at N0.44 per share.
It was closely followed by SFS Real Estate Investment Trust with a 9.96 per cent gain, Honeywell Flour Mill, and RT Briscoe, both recording a 9.87 per cent increase.
On the flip side, Oando and Cutix led the losers’ chart, with their share prices dropping by 9.95 per cent and 9.92 per cent, respectively.
Oando closed at N36.20 per share, while Cutix ended the day at N5.36.
Other significant losers included Academy Press (-8.70 per cent), Japaul Gold and Ventures (-7.89 per cent), and Red Star Express (-6.98 per cent).
The market breadth closed negative, with 25 equities declining against 22 that posted gains.
In total, 118 equities participated in trading, further reflecting the prevailing bearish sentiment.
Veritas Kapital Assurance recorded the highest volume of traded shares, with 38.4m units changing hands. This was followed by Guaranty Trust Holding Company (36.3m), Universal Insurance (23.2m), and Oando (22.1m).
On Tuesday, the Nigerian equity market continued its bearish trend influenced by the declining share prices of companies of Oando, Livestock Feeds, Cornerstone Insurance Company, and Linkage Assurance.
This downturn led to a decrease in market capitalization and the All-Share Index by 0.5 per cent, closing at N55.31trn and 97,390.01 points, respectively.
Nigeria’s business activities contrast in July as PMI drops to 49.7%
In July 2024, the composite Purchasing Managers Index stood at 49.7 points indicating contraction in economic activities for the thirteenth consecutive month.
However, the index shows improvement compared to the 48.8 points recorded in the previous month. Furthermore, Output Level, Suppliers’ Delivery Time and Stock of Inventory expanded.
New Orders and Employment contracted at a slower rate compared to the levels recorded in the previous month.
The data released by the Central Bank of Nigeria on Wednesday showed that the Services Sector recorded expansion for the second consecutive month while the Industry and Agricultural Sectors registered slower contraction when compared to the level recorded in the previous month.
Within the Industry Sector, the Manufacturing, Construction and Mining & Quarrying; Electricity, Gas & Water Supply Subsectors all recorded contractions in the review month.
The Composite Output Index stood at 50.3 points in July 2024, indicating growth in production level for the first time after five consecutive months of contraction.
Of the 36 sub sectors reviewed, 16 subsectors reported growth in production during the review month, while 17 subsectors registered a decline with Transportation Equipment reporting the highest decline. The remaining three subsectors were stationary.
In July 2024, the composite level of New Orders index at 48.8 points, indicated contraction in the volume of new incoming businesses/orders.
Of the 36 sub sectors reviewed, 25 subsectors reported declines in New Orders with Chemical & Pharmaceutical Products recording the highest decline. While 9 sub sectors reported increased levels of New Orders in the review month, Cement and Forestry however, were stationary.
At 48.7 index points, the composite Employment Level indicated contraction in July 2024 for the seventh consecutive month.
The index improved in July 2024 when compared to the 48.3 points recorded in the previous month. Eighteen sub sectors reported a contraction in Employment, with Printing & Related Support Activities recording the highest decline in the review month.
The Primary Metal subsector remained unchanged, while the remaining 17 sub sectors reported increased Employment Levels with the Petroleum & Coal Products subsector having the higher Employment Level.
The overall Stock Level in July 2024 registered an expansion, with an index of 50.7 points.
This marks the second instance of expansion in 2024. Sixteen sub sectors reported increased stock, with Petroleum & Coal Products experiencing the highest growth.
Six sub sectors remained stationary, while fourteen subsectors saw declines in stock levels. Notably, the Transportation Equipment subsector recorded the lowest stock level for the review month.
The Delivery Time for goods ordered in July 2024 was faster as indicated by an index of 50.8 points, implying that suppliers took a shorter time to supply raw materials orders by industrial firms.
Of the 17 sub sectors surveyed, eight sub sectors reported faster delivery time with Cement recording the fastest time, while Primary Metal reported the same delivery time.
The remaining seven sub sectors reported slower delivery time, of which Petroleum & Coal Products recorded the slowest time.
In July 2024, both the overall input and output prices decreased compared to June 2024.
However, the overall output price was lower than the overall input price. The output prices of the Industry, Services, and Agriculture sectors were lower than those recorded in June 2024. For input prices, Agriculture and Services sector prices were lower than the level in June, while Industry sector prices were higher in July.
In July 2024, the Industry Sector PMI at 48.3 points recorded the sixth consecutive month of contraction.
Despite this, industrial activities improved as shown by higher Production Level and faster Suppliers’ Delivery Times compared to June 2024.
Similarly, the Manufacturing; Mining, Quarrying, Electricity, Gas, and Water Supply; and Construction subsectors registered declines in July 2024.
Of the 17 sub sectors surveyed, 11 subsectors recorded contraction while the remaining six subsectors recorded expansion in the month under review.
The sub sectors with the highest contraction and highest expansion are Transportation Equipment and Furniture & Related Products, respectively.
The Industry Production Index registered expansion at 50.5 points in July 2024, indicating growth in production for the second consecutive month.
Eight sub sectors reported growth in production during the review month with Water Supply, Sewerage & Waste Management recording the highest growth; Printing & Related Support Activities Subsector was stationary, while the remaining eight subsectors registered declines in production with Transportation Equipment reporting the highest contraction.
