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Nigeria's Manufacturing PMI expands for 27th consecutive month
Data from the Central Bank of Nigeria shows Manufacturing Purchasing Managers Index in the month of June stood at 57.4 index points noting an expansion in Nigeria’s manufacturing sector for the twenty-seventh consecutive month. Ayodeji Ebo, Managing Director of Afrinvest Securities joins CNBC Africa for more.
Thu, 27 Jun 2019 09:14:31 GMT
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AI Generated Summary
- The Manufacturing Purchasing Managers Index in Nigeria expanded for the twenty-seventh consecutive month, indicating sustained growth in the sector.
- Key indicators such as new orders, timely delivery by suppliers, and employment levels showed positive trends, but the pace of growth in the manufacturing sector is moderating.
- Challenges in the labor market and financial markets require strategic initiatives to boost employment opportunities and stimulate market activity.
Nigeria's Manufacturing Purchasing Managers Index (PMI) has expanded for the twenty-seventh consecutive month, according to data from the Central Bank of Nigeria. In the month of June, the PMI stood at 57.4 index points, indicating growth in the manufacturing sector. Ayodeji Ebo, the Managing Director of Afrinvest Securities, discussed the implications of this expansion and shared insights on the current market trends in a recent interview on CNBC Africa.
Ebo pointed out that while the PMI figure of 57.4 showed a slight decrease from the previous month, key indicators such as new orders, timely delivery by suppliers, and employment levels all saw growth. However, he highlighted that the pace of increase in the manufacturing sector is moderating, with a lower growth rate of 1.8% compared to 2.4% in Q4 2018. Ebo raised concerns about the reduction in new orders, suggesting a potential decrease in purchasing power within the economy.
Discussing the labor market, Ebo acknowledged an increase in employment levels but emphasized the need for more job opportunities to match the rate of graduates entering the workforce. He stressed the importance of creating employment at a faster pace to address the growing number of job seekers.
Shifting focus to the financial markets, Ebo addressed the recent losses in the market and identified the need for catalysts to drive positive momentum. He highlighted the constraints faced by investors due to limited access to information and a lack of engagement from companies in breaking down financial data. Ebo mentioned the upcoming listing of a major company, which is expected to provide new investment opportunities and stimulate market activity.
Looking ahead to the second half of the year, Ebo shared his assessment of the market performance in the first half, mentioning the impact of the election period and the role of specific stocks in offsetting market declines. He anticipated a period of portfolio rebalancing at the end of the second quarter and emphasized the importance of corporate results, particularly in the banking sector, in influencing market sentiment.
In conclusion, Ebo expressed a conservative outlook for the second half of 2019, citing uncertainty in the market and the potential impact of regulatory policies. He highlighted the role of banking institutions in driving growth through retail lending and emphasized the need for cautious investment strategies in the coming months.
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