BUSINESS ROUNDUP: Manufacturing sector dwindles for 5th consecutive month; CBN scales down lending rate to 11.5%; See other stories that made our pick

Hello, and welcome to Business Roundup this week. Here, we bring you highlights of events that happened during the week -from the capital market to the mainstream business activities, while not forgetting the tech/economy build up.

Here are the Headlines:

• Portfolio investment in Nigeria falls to 8-month low in August
• Construction firm, Julius Berger to take a chance at agriculture
• Manufacturing sector dwindles for fifth consecutive month –CBN
• CBN scales down lending rate for banks to 11.5% as covid-19 tightens credit

Summary:

Portfolio investment in Nigeria, which aggregates the value of assets like bonds, stocks and cash equivalents held by domestic and international investors, plunged to a new low in August at N94.5 billion, its lowest level so far this year, the Nigerian Stock Exchange said on Thursday.

The value was N103.21 billion in July, meaning that portfolio investment in the country contracted by 8.49% or N8.71 billion within a month, the Exchange’s domestic and foreign portfolio investment report for August showed. Read more

Construction company, Julius Berger Nigeria, known for building a number of arteries, highways and thoroughfares in the country said it would foray into agro-processing, citing “the emerging developments, political, economical and structural situation in Nigeria and the resultant reforms by the governments.”

It said in a note posted by the Nigerian Stock Exchange (NSE) on Thursday, that it had pre-informed the stock market of its diversification aspirations. Read more

The Central Bank of Nigeria (CBN), rising from its Monetary Policy Committee (MPC) session Tuesday afternoon, lowered its lending rate to banks by 100 basis points to 11.5%, a policy shift that followed the headwinds of the coronavirus outbreak in August when the domestic credit growth rate slowed from 9.4% to 6.94%.

At its last meeting in July, the monetary authority had maintained the monetary policy rate at 12.5%. A dramatic move unforeseen by analysts, the adjusted rate is the lowest in four years since 2016, and would press towards keeping inflation within target, even though this has not been achieved in five years. Read more

Nigeria’s Purchasing Manager Index (PMI), which measures the economic health and the prevailing direction of the manufacturing and service sectors from the opinions and views of private sector companies, contracted in September, its fifth straight month, the Central Bank of Nigeria (CBN) said Wednesday.

Read also: BUSINESS ROUNDUP: FG, states, LGs share N682bn for August; Shell facility shut down; See other stories that made our pick

The Manufacturing PMI stood at 46.9 index points in September. It was 48.5 the month before. Any performance above 50 implies an expansion while any below 50 points the way of contraction. Read more

On NSE ROUNDUP: Market posts biggest month-to-date return after CBN’s policy shift

The Nigerian Stock Market (NSE) posted modest gains on Monday and Tuesday, the same day the Central Bank of Nigeria (CBN), in a move that upset analysts’ expectations, scaled down its monetary policy rate (the rate at which it lends to banks) from 12.5% to 11.5% in an effort to tame inflation and keep recession at bay.

There was a massive rush for stocks in the days that followed, with the gains recorded between Wednesday and Friday totalling N347.292 billion, accounting for 89% of the total N390.317 billion gain reported this week. Read more

MEANWHILE, on the tech scene, week was a beehive of activity. From wins and international recognitions to new opportunity windows opening for African techpreneurs where those of Nigerian origin could leverage to expand respective portfolios.

Nigeria’s Abasi Ene-Obong, during the week, was listed as an Endeavor Entrepreneur. Amongst other ovations, the development takes his healthtech venture, 54gene, another step above its competitors as it looks to benefit and leverage Endeavor’s support as a new partner company. Read full review

Thanks for joining the roundup this week. See you next week for another serving of Business Roundup. Don’t forget, for the latest news and updates from around the globe, keep reading Ripples Nigeria.

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