April 6 (Lagos) - In the month of March, net-supply at the Investors and Exporters Window (IEW) rose 25% MoM to $168 million compared to $134 million recorded in February. The increase stemmed from a 16% jump in aggregate sales.
Going by breakdown, international inflows at the IEW rose by 25% MoM to $1.5 billion ($1.2 billion in February) reflecting a strong rebound in FDI (+87% MoM to $122 million) and Other corporates (+862% MoM to $300 million) which more than offset slight decline in FPI (-1.3% MoM to $1.1 billion).
Going forward, Going forward, with our forecast monthly crude oil ($1.3 billion) and non-oil ($2.4 billion) inflows as well as our position on foreign portfolio flows, we do not foresee any sudden shock to the currency as the apex bank is well positioned to continue its aggressive dollar sale across segments of the window.
Inflation fast-tracks its descent in February: In line with our prognosis (analysts at ARM Securities ltd in Ikoyi), despite a modest 1bp decline in MoM inflation, headline inflation for the month of February dipped 80bps to 14.3% from 15.3% in the month of January. Elevated food prices presented the high base with February 2017 food inflation at 18.5% (versus 5-year average of 10.1%) owing to increased export of grains to neighbouring countries following the devaluation of the currency – which also had a negative impact on imported food. In recent months, food prices have moderated, induced by sufficient market supplies from the ongoing dry season harvest.
Consequently YoY food inflation dipped 133bps to 17.6% while MoM food inflation dipped 3bps to 0.85% in the review month. Going forward, we expect the impact of high base effect to continue to dictate food inflation and overall headline trajectory.
March PMI: A cause for cheer: The CBN survey for the month of march revealed that business activity maintained its strong expansion, with the Manufacturing and Non-Manufacturing index printing at 56.7 and 57.2 (versus 56.3 and 56.1 in the month of February respectively).
Though PMI remains a leading indicator of the level of economic activities, it is not a seamless guide for the level of economic growth in Nigeria. Nevertheless, improved oil receipts, currency stability and CBN support to agricultural sector is expected to support economy growth this year. Consequently, analysts at ARM Securities Ltd in Ikoyi forecast GDP growth of 3.1% for Q1 18 and 2.6% for FY 18.
reporting for easykobo.com on Friday, April 6 2018 from Lagos, Nigeria
Source - analysts at ARM SECURITIES LIMITED. THIS ARTICLE PUBLICATION IS COPYRIGHT OF ARM SECURITIES LIMITED AND NOT TO BE REPRODUCED OR REPRINTED IN ANY FORM WITHOUT THE EXPRESS PERMISSION OF ARM SECURITIES LIMITED.
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