Connect with us

Markets

Shifting Sands of Consumer Sentiment Across West Africa

Published

on

  • Ghana’s consumer confidence declines by five points
  • Improved perception of Nigerian finances, job prospects & spending intentions

Ghana’s latest Consumer Confidence Index (CCI) for the fourth quarter of 2018 shows a five point decrease to 108, while Nigeria’s CCI has dropped one point to 117, presenting a diverse picture of
consumer sentiment across West Africa.

In terms of Nigeria’s performance, Nielsen Nigeria MD Ged Nooy comments; “In Q4’18, the consumer outlook in Nigeria dipped marginally versus the previous quarter. Continued inflationary pressures and uncertainties around the elections could have impacted consumer sentiment, leading to a one-point drop in the consumer confidence index. However, despite the drop, consumers showed increased propensity towards stocking up on the necessities as a result of year-end festivities.”

When it comes to job prospects, 62% Nigerians view their prospects as excellent or good (a 6 point increase from the previous quarter) and 31% view them as not so good or bad. In terms of the state of their personal finances over the next 12 months, the same amount as the previous quarter (79%) say excellent or good. In addition, the number of Nigerian consumers who feel now is a good or excellent time to purchase what they need or want has increased three points to 46%.

Looking at whether Nigerians have spare cash, exactly half (50%) say yes, down five points from the previous quarter. In terms of what their spending priorities are once they meet their essential living expenses, the highest number of consumers (73%) would put their spare cash into savings, followed by 71% on home improvements and 68% who would invest in stocks and mutual funds.

Ghanaians less positive

While Nigeria showed a slight decline in confidence; Ghana’s CCI figure dropped a substantial five points to 108. Commenting on the reasons for this Nielsen Market Lead for West Africa Emerging Markets Yannick Nkembe says; “The continued depreciation of the Cedi, the collapse of certain banks leading to job losses, and the high cost of credit and an inability to access credit have led to a drop in consumer sentiment in Ghana”.

This decline in sentiment is clearly reflected in Ghanaian consumers’ immediate-spending intentions. Only 40% Ghanaians say now is a good or excellent time to purchase what they want or need, a substantial eight-point drop compared to the previous quarter. Negative sentiment is also reflected in Ghanaian’s job prospects. Only 58% Ghanaians view their job prospects as excellent or good, experiencing a six-point drop compared to the previous quarter.

Sentiment around the state of personal finances has also taken a slight hit with Ghanaians who think the state of their personal finances would be excellent or good over the next year having dropped nine points from the previous quarter to 67%. This in comparison to 31% who think that the state of their personal finances is not so good or bad, which represents a substantial 13% increase in this negative sentiment.

Looking at whether Ghanaians have spare cash to spend, 42% said yes, versus 53% in the previous quarter. In terms of their spending priorities once they meet their essential living expenses, the highest number of consumers (77%) would put their spare cash into savings and the same number will spend on home improvements, while 70% said they would invest in shares/mutual funds.

Elaborating on these results, Nkembe says; “Consumer confidence in West Africa declined in the last quarter of 2018. However, it still falls on the positive side of the spectrum and we hope to see a rebound in confidence levels in 2019.”

The Nielsen Consumer Confidence and Spending Intentions survey was conducted on 15-16 Nov’18 in Kenya, Ghana, and Nigeria among 1 500 respondents, using mobile methodology. The sample has quotas based on age and gender for each country.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Crude Oil

Oil Prices Climb on Renewed Middle East Concerns and Saudi Supply Signals

Published

on

Crude oil

As global markets continue to navigate through geopolitical uncertainties, oil prices rose on Monday on renewed concerns in the Middle East and signals from Saudi Arabia regarding its crude supply.

Brent crude oil, against which Nigeria’s oil is priced, surged by 51 cents to $83.47 a barrel while U.S. West Texas Intermediate crude oil rose by 53 cents to $78.64 a barrel.

The recent escalation in tensions between Israel and Hamas has amplified fears of a widening conflict in the key oil-producing region, prompting investors to closely monitor developments.

Talks for a ceasefire in Gaza have been underway, but prospects for a deal appeared slim as Hamas reiterated its demand for an end to the war in exchange for the release of hostages, a demand rejected by Israeli Prime Minister Benjamin Netanyahu.

The uncertainty surrounding the conflict was further exacerbated on Monday when Israel’s military called on Palestinian civilians to evacuate Rafah as part of a ‘limited scope’ operation, sparking concerns of a potential ground assault.

Analysts warned that such developments risk derailing ceasefire negotiations and reigniting geopolitical tensions in the Middle East.

Adding to the bullish sentiment, Saudi Arabia announced an increase in the official selling prices (OSPs) for its crude sold to Asia, Northwest Europe, and the Mediterranean in June.

This move signaled the kingdom’s anticipation of strong demand during the summer months and contributed to the upward pressure on oil prices.

The uptick in prices comes after both Brent and WTI crude futures posted their steepest weekly losses in three months last week, reflecting concerns over weak U.S. jobs data and the timing of a potential Federal Reserve interest rate cut.

However, with most of the long positions in oil cleared last week, analysts suggest that the risks are skewed towards a rebound in prices in the early part of this week, particularly for WTI prices towards the $80 mark.

Meanwhile, in China, the world’s largest crude importer, services activity remained in expansionary territory for the 16th consecutive month, signaling a sustained economic recovery.

Also, U.S. energy companies reduced the number of oil and natural gas rigs operating for the second consecutive week, indicating a potential tightening of supply in the near term.

As global markets continue to navigate through geopolitical uncertainties and supply dynamics, investors remain vigilant, closely monitoring developments in the Middle East and their impact on oil prices.

Continue Reading

Crude Oil

Oil Prices Drop Sharply, Marking Steepest Weekly Decline in Three Months

Published

on

Crude Oil - Investors King

Amidst concerns over weak U.S. jobs data and the potential timing of a Federal Reserve interest rate cut, oil prices record its sharpest weekly decline in three months.

Brent crude oil, against which Nigerian oil is priced, settled 71 cents lower to close at $82.96 a barrel.

Similarly, U.S. West Texas Intermediate crude oil fell 84 cents, or 1.06% to end the week at $78.11 a barrel.

The primary driver behind this decline was investor apprehension regarding the impact of sustained borrowing costs on the U.S. economy, the world’s foremost oil consumer. These concerns were amplified after the Federal Reserve opted to maintain interest rates at their current levels this week.

Throughout the week, Brent experienced a decline of over 7%, while WTI dropped by 6.8%.

The slowdown in U.S. job growth, revealed in April’s data, coupled with a cooling annual wage gain, intensified expectations among traders for a potential interest rate cut by the U.S. central bank.

Tim Snyder, an economist at Matador Economics, noted that while the economy is experiencing a slight deceleration, the data presents a pathway for the Fed to enact at least one rate cut this year.

The Fed’s decision to keep rates unchanged this week, despite acknowledging elevated inflation levels, has prompted a reassessment of the anticipated timing for potential rate cuts, according to Giovanni Staunovo, an analyst at UBS.

Higher interest rates typically exert downward pressure on economic activity and can dampen oil demand.

Also, U.S. energy companies reduced the number of oil and natural gas rigs for the second consecutive week, reaching the lowest count since January 2022, as reported by Baker Hughes.

The oil and gas rig count fell by eight to 605, with the number of oil rigs dropping by seven to 499, the most significant weekly decline since November 2023.

Meanwhile, geopolitical tensions surrounding the Israel-Hamas conflict have somewhat eased as discussions for a temporary ceasefire progress with international mediators.

Looking ahead, the next meeting of OPEC+ oil producers is scheduled for June 1, where the group may consider extending voluntary oil output cuts beyond June if global oil demand fails to pick up.

In light of these developments, money managers reduced their net long U.S. crude futures and options positions in the week leading up to April 30, according to the U.S. Commodity Futures Trading Commission (CFTC).

Continue Reading

Crude Oil

Oil Prices Rebound After Three Days of Losses

Published

on

Crude oil - Investors King

After enduring a three-day decline, oil prices recovered on Thursday, offering a glimmer of hope to investors amid a volatile market landscape.

The rebound was fueled by a combination of factors ranging from geopolitical developments to supply concerns.

Brent crude oil, against which Nigeria oil is priced, surged by 79 cents, or 0.95% to $84.23 a barrel while U.S. West Texas Intermediate (WTI) crude climbed 69 cents, or 0.87% to $79.69 per barrel.

This turnaround came on the heels of a significant downturn that had pushed prices to their lowest levels since mid-March.

The recent slump in oil prices was primarily attributed to a confluence of factors, including the U.S. Federal Reserve’s decision to maintain interest rates and concerns surrounding stubborn inflation, which could potentially dampen economic growth and limit oil demand.

Also, unexpected data from the Energy Information Administration (EIA) revealing a substantial increase in U.S. crude inventories added further pressure on oil prices.

“The updated inventory statistics were probably the most salient price driver over the course of yesterday’s trading session,” said Tamas Varga, an analyst at PVM.

Crude inventories surged by 7.3 million barrels to 460.9 million barrels, significantly exceeding analysts’ expectations and casting a shadow over market sentiment.

However, the tide began to turn as ceasefire talks between Israel and Hamas gained traction, offering a glimmer of hope for stability in the volatile Middle East region.

The prospect of a ceasefire agreement, spearheaded by Egypt, injected optimism into the market, offsetting concerns surrounding geopolitical tensions.

“As the impact of the U.S. crude stock build and the Fed signaling higher-for-longer rates is close to being fully baked in, attention will turn towards the outcome of the Gaza talks,” noted Vandana Hari, founder of Vanda Insights.

The potential for a resolution in the Israel-Hamas conflict provided a ray of hope, contributing to the positive momentum in oil markets.

Despite the optimism surrounding ceasefire talks, tensions in the Middle East remain palpable, with Israeli Prime Minister Benjamin Netanyahu reiterating plans for a military offensive in the southern Gaza city of Rafah.

The precarious geopolitical climate continues to underpin volatility in oil markets, reminding investors of the inherent risks associated with the commodity.

In addition to geopolitical developments, speculation regarding U.S. government buying for strategic reserves added further support to oil prices.

With the U.S. expressing intentions to replenish the Strategic Petroleum Reserve (SPR) at prices below $79 a barrel, market participants closely monitored price movements, anticipating potential intervention to stabilize prices.

“The oil market was supported by speculation that if WTI falls below $79, the U.S. will move to build up its strategic reserves,” highlighted Hiroyuki Kikukawa, president of NS Trading, owned by Nissan Securities.

As oil markets navigate a complex web of geopolitical uncertainties and supply dynamics, the recent rebound underscores the resilience of the commodity in the face of adversity.

While challenges persist, the renewed optimism offers a ray of hope for stability and growth in the oil sector, providing investors with a semblance of confidence amidst a volatile landscape.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending