Investors lost N89 billion as the Nigerian Exchange Limited started the week’s first trading session in the red.
According to The Punch, inflation for September was reported by the National Bureau of Statistics at 26.72 percent, which is an increase of 0.92 percentage points above August’s inflation rate of 25.80 percent.
The top four categories driving inflation year over year, according to data from the NBS, are food and non-alcoholic beverages, housing, water, electricity, gas, and other fuel, clothing, and footwear, and transportation, at 13.84%, 4.47%, 2.04%, and 1.74%, respectively.
Investors focused on the inflation rate this week coupled with the announcement of the third-quarter earnings reports of companies listed on the exchange.
The market capitalization and the All-Share Index both declined by 0.24 percent to finish at 67,037.93 basis points and N36.830tn respectively.
At the end of trading, there were a total of 5,965 transactions involving more than 216.07 million shares for N 3.551 billion.
The market’s mood was downbeat, as evidenced by 19 gainers and 23 losers. The pair of NASCON Allied Industries, whose shares increased by 5.45% to close at N58 per unit, Flour Mill, which closed at N31 per share after increasing by 4.20%, Dangote Sugar, which increased by 3.13% to close at N62.60, United Bank for Africa, which saw a 2.28 percent increase in share price to close at N17.95, and Unilever, which increased by 0.70 percent to close at N14.35 were among the gainers on the list.
On the losers’ table were Stanbic IBTC, which lost 10% of the value of each unit of its shares to close at N72, Oando, which lost 9.24% to close at N8, Eterna, which lost 8.05% to close at N13.70, Cadbury, which fell by 6.67% to close at N14, and Okomu Oil, which lost 9.96% to close at N236.80.
A professor of capital markets at Nasarawa State University, Keffi, Uche Uwaleke, commented on the impact of the inflation statistic issued by the NBS and called it a disturbing trend.
“It is worth noting that inflationary pressure is increasing in Nigeria, reflecting the effects of the removal of fuel subsidies and naira depreciation,” said Uwaleke, who is also the president of the Association of Capital Market Academics of Nigeria.
“Inflationary pressure is slowing in many parts of the world, including the US, UK, Europe, South Africa, and even Ghana (where the inflation rate is now just shy of 40%).
“The pressure point is on food, which accounts for around 14% (more than 50%) of the 26.72 percent. Due to high transportation costs, urban areas may experience this pressure more than rural ones.”
He stated that given its effects on the purchasing power of the naira and, consequently, the level of poverty, the trend in the inflation rate is rather alarming. “Both the pressure on the foreign exchange market from demand and the growing dollarization of the Nigerian economy are partially its fault.”
