NIGERIA ECONOMIC HIGHLIGHTS FOR JUNE

JUNE HIGHLIGHTS

• Oil prices reach a 16month high of $117pb in June

• Rule of thumb is that a $10 increase in oil price leads to a. 0.2% decline in global growth

• Global GDP is expected to grow at 2.85% in 2014 and is currently at $75trn

• Estimated revenue for the month should exceed $6bn

• Impact on external reserves will depend on the 90-day lag between oil lifting and payment

• Middle East geopolitical tension and uncertainty in Ukraine is changing market sentiment

• FAAC disbursement in June of N683bn is higher but broadly in line with the annual average of N645.85bn

• The new automotive policy impact on car prices is now for real

• Average price of passenger cars and buses are up by 40%

• Average power output from the national grid decreased to 3,400MW

• Power outage in the Lagos metropolis increased to over 70% of the time in June

• Power supply to Lagos is still below 1,000MW as against aggregate peak time demand of 15,000MW 

• Diesel price was flat at N152 per litre in the Lagos area

• No major reports of petrol shortage and no queues in the Lagos area

• Headline inflation in May (as reported in June) was 8%

• 3rd consecutive marginal increase in the price level

• Money supply growth for the month of May was 0.38% at N15.9trn

• Annualized is 5.81% compared to (-4.82%) in December 2013

• The external reserves level increased marginally to $37.48bn

• The highest point since Godwin Emefiele took over on June 3rd

•  Amount on offer at the RDAS was $2.95bn, which is 1.67% lower than in the previous month

• The naira traded flat at N167 after another vicious sell off early in the month

• The stock market rally continued, raising the average P/E multiple to 13.89x

• Corporate earnings reported in May showed an average increase of 8.19% over the previous quarter

• The international/domestic share of equity purchases shifted in favor of domestic investors

• Pension funds increased their equity holdings by 2% in April to N614bn

• Total pension fund assets have increased to N4.3trn

• 30.56% of market capitalisation and 5.38% of GDP

• Dangote receives AfDB loan approval of $300m for oil refinery in Olokola Free trade zone, Ondo state

• New CBN Governor assumed office in June

• Laid out his vision for the apex institution for the next 5 years

• Greater emphasis on debtor delinquency curtailment by blacklisting

• Monetary policy stance will become clearer after the first MPC meeting of July 22

•  A minor reshuffling of portfolios of the Deputy Governors

• Introduced new BDCs guidelines increasing capital requirements which is provoking National Assembly backlash

• Waiving the cashless charges for one year will allow moneybags room to fund election primaries and conventions

• FGN plans to reduce tariff on imported rice to curb smuggling

• Current tariff is 110%

OUTLOOK FOR JULY

• Expect a supplementary budget

• The Government will step up its spending on security in the FCT

• It will also increase military patronage

• The MPC will make no changes to the monetary policy stance

• Liquidity in the system will increase bringing the average opening balance to above N500bn

• The cost of intervention and mopping up will exceed the target of funding the CBN balance sheet

• External Reserves will remain flat at $37bn

• The naira will be supported at the current levels by the CBN