Nigeria | NGX

The resilience of players in the Nigerian brewery industry was further tested in 2020, as the spill-over effect of the pandemic amplified the impacts of structural challenges besetting the industry’s operating environment. Before 2014, the major talking point on the industry’s operating environment was the increased attraction of global players such as Heineken and SAB-Miller, due to years of strong industry profitability performance. For instance, between 2006 and 2014, the industry’s gross and EBITDA margins averaged 47.0% and 26.0% respectively. This was made possible by the impressive performance of the broader economy, as annual real GDP growth averaged 6.4% over this period, while the exchange rate (₦141.35/$1.00), the inflation (10.1%) and the unemployment rates (12.1%) supported strong purchasing power of consumers. However ...

Last week, the performance of the domestic equities market was mixed as the benchmark index closed in the green on 2 of the 5 trading sessions. Consequently, the All Share Index (ASI) declined by 31bps w/w to settle at 38547.08 points while YTD loss worsened to -4.3%. Market capitalisation fell by ₦62.9bn in value to close at ₦20.1tn. Activity level was mixed as average volume fell by 6.9% to 274.8m units while average value traded rose by 36.3% to ₦2.4bn.

This week, a mixture of profit-taking and reaction to earnings scorecard released this week shaped market activities. All in, the local bourse ended the week on a bearish note, as the ASI lost 0.3% w/w reversing gains from the previous week. The ASI closed at 38,547.1 points as YTD loss worsened to 4.3%, and market capitalisation fell by 31bps w/w to settle at N20.1tn. Activity level was mixed as average volume traded fell by 6.9% w/w to 274.8m units and average value traded increased by 36.3% to N2.4bn.

Last week, the performance of the domestic equities market was bullish as the benchmark index closed in the green on all 3 trading sessions. Consequently, the All Share Index (ASI) rose by 1.9% w/w to settle at 38,667.9 points while YTD loss improved to -4.0%. Market capitalisation increased by ₦375.5bn in value to close at ₦20.1tn.

The second half of 2021 is expected to bring some cheer to macro watchers globally, with the most robust growth projected for Emerging Markets and Advanced Economies. Sub-Saharan African Economies may have to make do with milder out-turns, given the reality of their low fiscal & monetary bandwidths and lingering regulatory-cum structural impasses. Yet, base effects could instigate the most significant macro bounces across these markets in years. In our view, Nigeria could record its paciest GDP growth in over 32 quarters in Q2'21, with construction, trade, manufacturing, real estate, and crude petroleum & natural gas moving from pull to push sectors on the impact of their low bases. ...

2021 was tagged the year of return to normalcy, and we highlighted that growth across countries would remain uneven due to differing wealth of nations. Large swathes of that forecast have proven to be right. The forecast that more affluent countries would recover stronger from the pandemic never appeared more accurate, thanks to the combination of accommodative fiscal and monetary policies. Although the global economy’s outlook appears greener, global expansion remains heavily dependent on successfully overcoming the Covid-19 health crisis, as the virus remains a threat. As of the time of writing, there have been 169,597,415 confirmed cases of COVID-19, including 3,530,582 deaths, as reported by the World Health Organisation (WHO). A 3rd wave of the pandemic, led by a new, more-infectious “Delta” variant, has emerged in various pockets of the globe, prompting the reintroduction of lockdowns. Furthermore, while the vaccination story has been largely positive, vaccination rates remain broadly uneven across regions. Despite 3.6 billion vaccine doses administered globally, only one in ten people in lower-income countries have received at least a dose of the vaccine.