The August 2024 PMI report by the CBN shows Nigeria’s manufacturing sector growing for the first time in 13 months, with a composite PMI of 50.2. However, the stock market saw a 0.15% drop as equities faced weak performance.
The August 2024 Purchasers Managers Index (PMI) report by the Central Bank of Nigeria (CBN) indicates a modest recovery in Nigeria’s manufacturing sector. The composite PMI stood at 50.2 points, signaling an expansion in economic activity for the first time in 13 months following a prolonged period of contraction.
The report reviewed 36 subsectors across the Industry, Services, and Agriculture sectors. 17 subsectors reported growth, with Primary Metal showing the strongest performance. However, 19 subsectors recorded declines, with Forestry seeing the steepest contraction. Key indicators such as Output (50.8), New Orders (50.5), and Stock of Raw Materials (51.3) also signaled growth, though employment dropped to 48.7 points.
The Services sector expanded for the third consecutive month, rising to 50.7 points, supported by increased business activity, rising stock levels, and a higher influx of business opportunities.
However, Transportation and Warehousing recorded the most significant contraction since July. The Agriculture sector also showed signs of recovery, recording a PMI of 50.5 points after three months of declining activity.
The Industry sector continued to contract, registering 49.2 points in August 2024, marking the seventh consecutive month of contraction. Investment in infrastructure and targeted reforms will be key to unlocking these sectors’ full potential and ensuring long-term economic growth.
Stock Market
This week, the stock market experienced a weak performance, with bulls losing momentum and the All-Share Index (ASI) dropping by 0.15%. This was due to sell sentiment across major sectors and continued profit-taking activities. The market capitalization of traded equities also plunged by 0.15%, reaching N55.39 trillion.
The year-to-date return of the exchange depleted further to 28.97%. Market momentum was weak, with sell interest across small, mid, and large-cap stocks. The weekly trade value nosedived by 15.4% week-on-week to N43.43 billion, while traded volumes declined by 20.3% to 2.14 billion shares.
Three of the five sectors under observation closed in bearish territory. The NGX-Oil & Gas and NGX-Banking indexes led the charge with weekly gains of 1.48% and 0.23%, respectively.
On the contrary, the NGX Insurance, NGX-Consumer Goods, and NGX-Industrial Goods indices closed the week down by 4.76%, 1.18%, and 0.13%, buoyed by downbeat sentiments in RTBRISCOE, CORNERSTONE, PZ CUSSONS, AIICO, DANGSUGAR, WAPIC, and Nigerian Breweries.
Conclusion
In the coming week, mixed sentiment will rule the market activities, with position-taking and portfolio reshuffling likely to intensify as market players await the half-year publication of interim dividend-paying banks.
From a technical perspective, the NGX shows signs of recovery, with equity investors poised to capitalize on pullbacks to acquire value stocks.
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