Investors Lose N89bn as Inflation Hits 26.72%

The Nigerian Exchange Limited recorded a huge loss in the first trading session of the week, with investors losing N89bn

Also, the National Bureau of Statistics released the inflation figures for September, and they showed that the nation's inflation was 26.72%, which showed an increase of 0.92% when compared with the August inflation data, which was 25.80%.

The data released by the NBS shows that the four items pushing inflation high include food and non-alcoholic beverages, housing, water, electricity, gas and other fuel, clothing and footwear, and transport at 13.84%, 4.47%, 2.04%, and 1.74%, respectively.

The inflation figure was the focus for investors this week, together with the release of third-quarter earnings reports of publicly traded companies listed on the exchange.

It also showed that the All-Share Index and market capitalization declined by 0.24% to close at 67,037.93 basis points and N36.830tn, respectively.

After yesterday’s trading, a total of 5,965 deals were recorded, with over 216.07 million units of shares valued at N3.551 billion.

Market sentiments were recorded to be negative, with 19 equities gaining and 23 equities losing. On the gainers list, NASCON Allied Industries appreciated by 5.45% to close at N58 per unit, Flour Mill closed at N31 per share after gaining 4.20%, Dangote Sugar appreciated by 3.13% to close at N62.60, United Bank of Africa’s share rose by 2.28% to close at N17.95, and Unilever appreciated by 0.70% to close at N14.35.

On the losers list, Stanbic IBTC lost 10% of its share to close at N72 per unit, Oando lost 9.24% to close at N8.35, Eterna’s shares lost 8.05% to close at N13.70, Cadbury lost 6.67% to close at N14, and Okomu Oil lost 9.96% to close at N236.80.

Commenting on the effects of the inflation figure released by the NBS with Punch Newspaper, a professor of capital markets at the Nasarawa State University, Keffi, Uche Uwaleke, described it as a worrying trend.

Uwaleke, who is also President of the Association of Capital Market Academics of Nigeria, said, 

• It is worth noting that whereas 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 shy of 40%), it is rising in Nigeria, reflecting the impact of fuel subsidy removal and naira depreciation.

• The pressure point is on food, which contributes about 14% (over 50%) of the 26.72%. This pressure is felt more in urban areas than in rural areas, possibly on account of high transport costs. The trend in the inflation rate is quite worrisome given its impact on the purchasing power of the naira and, by extension, on poverty levels. It is equally partly to blame for the increasing dollarization of the Nigerian economy and the demand pressure in the forex market.