The UK’s manufacturing PMI fell to 51.50 in September 2024, reflecting a slowdown in output. In Asia, China’s central bank cut rates to boost liquidity, while Nigeria raised interest rates to 27.25%, addressing economic pressures. Flour Mills of Nigeria Plc announces plans to delist after Excelsior’s SEC-approved acquisition.
The UK’s manufacturing PMI dropped to 51.50 points in September 2024, indicating a slowdown in the manufacturing sector’s output. Factors such as cautious consumer spending, weak export orders from the European Union, and a decrease in delivery backlogs are expected to keep manufacturing output under pressure in the near term.
In Asia, the People’s Bank of China (PBoC) announced a 50bps reduction in the reserve requirement ratio and lowered the 7-day reverse repo rate by 20bps to 1.50%, aligning with the Chinese government’s expansionary policies. China’s GDP growth for Q2:2024 came in at 4.70% YoY, reflecting softer domestic demand. These measures are expected to enhance system liquidity and stimulate business investment and consumer spending, enhancing the country’s growth prospects.
On the Nigerian front, the Monetary Policy Committee of the Central Bank of Nigeria raised the monetary policy rate by 50bps to a record high of 27.25%, marking the fifth consecutive hike this year.
The Federal Executive Council has approved the Economic Stabilization Bills, aiming to amend tax and fiscal laws with key goals such as boosting investment in the gas sector, strengthening the Naira, promoting fiscal discipline, and creating jobs. Nigeria’s unemployment rate rose to 5.30% in Q1:2024, up from 4.10% in Q1:2023.
The Money Market
The T-Bills Primary Market Auction saw a decrease in subscriptions by 45.97% to ₦304.27 billion, with a bid-to-offer ratio of 1.34x. This led to increased stop rates for various instruments. The OMO auction saw a decrease in subscriptions, with only the 362-day instrument seeing a subscription rate of 24.36%.
The fixed-income secondary market experienced mixed sentiment, with average T-bills yields rising to 21.93% and bond yields declining to 18.75%. The Eurobonds market experienced a bullish sentiment, with an average yield falling to 9.43% and an average price of USD89.87.
The Stock Market
Flour Mills of Nigeria Plc (FLOURMILL) has announced that its majority shareholder, Excelsior Shipping Company, has received approval from the Securities and Exchange Commission (SEC) to acquire the remaining shares held by the company’s minority shareholders. The transaction is structured as a scheme of arrangement with a proposed offer price of ₦70.00 per share, representing a potential upside of 12.90% compared to its closing price of ₦62.00 on September 27, 2024. The company intends to delist from the Nigerian Exchange (NGX) following the successful acquisition.
The local bourse sustained its positive trajectory this week, with the NGX All-Share Index (NGXASI) rising by 0.21% YoW to close at 98,458.68, bringing the year-to-date gain to 31.68%. Sectoral performance varied, with NGXBNK, NGXOILGAS, and NGXINS recording weekly gains, while NGXCNSMRGDS and NGXINDUSTR registered week-on-week losses.
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