- Ghanaian consumer confidence declines by four points
- Nigerians consumer confidence also subdued
Lagos, 11 December 2019 – Ghana’s latest Nielsen Consumer Confidence Index (CCI) for the third quarter of 2019 shows a slight drop to 114 from the previous quarter’s buoyant 118, while Nigeria’s CCI has also decreased by five points to 122. These two sets of results present a fairly stable, albeit a slightly less positive picture of consumer sentiment across West Africa compared to the previous quarter.
Looking at Ghana’s overall performance, Nielsen Market Lead for West Africa, Yannick Nkembe comments; “The initial optimism experienced at the beginning of the year is waning in Ghana owing to the concerns around the economy. Though inflation levels dropped, these have not shown a meaningful impact at the ground level and Ghanaians continue to feel the pressure. Consumers have become cautious of spending as they are not certain of future prospects.”
This more subdued outlook is reflected by Ghanaian consumers’ curtailed view of their job prospects, with a substantial 12 point decrease to 51% saying job prospects will be excellent or good in the next 12 months. In terms of the state of their personal finances over the next 12 months, 72% say they are excellent or good, down from 74% in the last quarter. The number of Ghanaian consumers who feel now is a good or excellent time to purchase the things they need or want, has also seen an inconsequential drop quarter on quarter, from 46% to 45%.
Looking at whether Ghanaians have spare cash, only 42% say yes, down a substantial 10 points from the previous quarter. Once they meet their essential living expenses, the highest number of consumers (82%) still say they will put their spare cash into savings, followed by 66% on home improvements/decorating and 59% who will invest in stocks and mutual funds.
When looking at the factors that are having a negative impact on Ghanaians outlook, the top concerns over the next six months are increasing food prices (26%) followed by work/life balance at 22%, the economy and tolerance towards different religions, both at 18%, and job security coming in fourth at 16%.
In light of their outlook, more than three quarters (72%) of Ghanaians have changed their spending to save on household expenses compared to the same time in the previous year. The top three actions they have taken to save money are delaying the replacement of major household items (55%), looking for better deals on loans/insurance/credit cards (54%) and spending less on new clothes (53%).
A drop in sentiment in Nigeria
The third quarter also saw a drop in sentiment in Nigeria with consumer confidence decreasing by five points to 122, albeit it is still higher than the same quarter last year (118).
Commenting on the recent decline in consumer sentiment, Nielsen MD for Nigeria, Ged Nooy says; “Nigerians are experiencing a subdued confidence level considering that inflation has started to rise again and the proposed VAT increase bill, which is making people cautious. Furthermore, the rising sovereign debt and the anxiety around further Naira devaluation, continued to impact consumer sentiment in Nigeria in the third quarter.”
Looking at the consumer picture, Nigerians immediate-spending intentions has shown a large decline; with only 41% of consumers (versus 54% in the previous quarter) saying now is a good or excellent time to purchase what they want or need. Their perception around job prospects has also declined, with 55% viewing them as excellent or good – a five point drop from the previous quarter.
In addition, sentiment around the state of personal finances has also shown a decline, with 76% Nigerians agreeing their state of personal finances will be excellent or good over the next year, a six point drop from the previous quarter.
Looking at whether Nigerians have spare cash to spend, 47% said yes, versus 51% in the previous quarter. In terms of their spending priorities once they meet their essential living expenses, 76% would invest in home improvements/decorating, 72% would put their spare cash into savings and 62% say they will invest in shares/mutual funds.
Looking at the top concerns for Nigerians over the next six months, work/life balance tops the list with 28% – a one point increase compared to the previous quarter. This is followed by concerns around increasing food prices at 22% (the same as Q2’19) and tolerance towards different religions (19%) superseding the economy, which is now at 16% – a four point decrease compared to the previous quarter.
Elaborating on these results, Nooy says; “Nigerian consumer sentiment dropped this quarter, however it is still quite high compared to the cut off of 100, where anything above 100 reflects a positive consumer confidence. The key for marketers and retailers is to understand these fluctuating consumer sentiments and quickly adapt to the consumer’s needs.”
Volkswagen Group, Toyota, and Renault-Nissan-Mitsubishi Alliance Lost $104.5bn in Revenue in 2020
Automakers Lost $104.5 Billion in Combined Revenue in H1 2020
Automakers had a rough start to 2020, with global auto production, and sales slumped amid the coronavirus outbreak. Supply chain disruptions, factory closures, and sales drops had a massive impact on the largest automobile manufactures, causing a sharp fall in their revenues.
According to data presented by StockApps, the Volkswagen Group, Toyota, and Renault-Nissan-Mitsubishi Alliance, as the leading automobile manufacturers based on global sales, lost $104.5bn in combined revenue in the first half of 2020.
Volkswagen Group Revenue Plunged by $34.5bn, the Biggest Drop in 2020
The world’s largest automobile manufacturer, the Volkswagen Group sold the most cars in 2019, delivering 10.2 million sedans, sport-utility vehicles, and compact cars under its top passenger car brands, and almost 734,000 trucks in its three commercial vehicle brands. Statista data also revealed the German automaker hit a 25.4% market share based on new car registrations in Europe as of October.
Although the company managed to reduce the effects of COVID-19 in the first half of the year, the H1 2020 financial report still revealed severe losses. Between January and June, the Group’s sales revenue plunged by $34.5bn to $114bn, the heaviest fall among the top three automakers.
The COVID-19 outbreak caused a 27% drop in vehicle deliveries and an adjusted operating loss of $940 million in the first half of 2020, down from an $11.8bn adjusted operating profit in the year-earlier period, forcing the German automaker to slash its dividend. The Yahoo Finance data also revealed the Volkswagen Group market cap dropped by 17% in 2020, falling from $98.1bn in December 2019 to $80.8bn last week.
Toyota Motor Corporation, the world’s second-largest car producer, sold 10.74 million vehicles in 2019. With 7.9 million cars sold between January and June, 100,000 more than VW Group, the company could become the leading automaker in 2020 if COVID-19 is contained in its most important markets, Japan and the United States.
In fiscal 2020, ended on March 31st, 2020, the Toyota sales revenue dropped by $2.9bn or 1.1% to $290bn. However, the Q1 FY 2021 results, for the period between April and June 2020, revealed a 40.4% drop in revenue and the smallest quarterly profit in nine years as the coronavirus pandemic halved its car sales. Statistics show the revenue of the Japanese automaker plunged by $29.7bn YoY in the second quarter of 2020, with a total loss in the first half of 2020 reaching $32.7bn.
The auto giant expects coronavirus to deliver a major blow to earnings and sales in the fiscal year ending March 2021, with net profit forecast to plunge 64% year-over-year to $6.97bn.
Renault-Nissan-Mitsubishi Alliance Suffered a $37.3bn Loss
With 10 million vehicles sold in 2019 and 6.3 million in the first half of 2020, the Franco-Japanese Alliance, Renault-Nissan-Mitsubishi, ranked third on the list of the top-selling car manufacturers.
Nevertheless, the COVID-19 outbreak severely affected their business. The Renault Group suffered a massive downturn for the first half of 2020. Between January and June, the company reported $21.8bn in sales revenue, a $12.5bn or 34% plunge year-over-year.
Sales figures were also down for the period, with the Renault Group suffering a 34.9% plunge globally and 41.8% in Europe, the second-worst hit region after the Americas. Nissan’s sales dropped by 47.7% globally and 33.7% in its home market of Japan.
Mitsubishi Motors reported a $12.6bn revenue loss in the fiscal year ended March 31st, 2020. The downturn continued in the Q1 of the fiscal year 2021, with revenues falling to $25.5bn, a 32% plunge year-over-year. The Japanese multinational automotive manufacturer suffered a total loss of $24.8bn in the first half of 2020, while its market cap halved reaching $2.98 bn last week.
Statistics show the Franco-Japanese Alliance lost a total of $37.3bn in sales revenue in the first half of 2020.
Oil Steadies, But Outlook Gloomy as Coronavirus Cases, Supply Grow
Oil prices eked out small gains on Tuesday after sharp losses, but sentiment remained subdued as a surge in global coronavirus cases hit prospects for crude demand while supply is rising.
Brent crude was up 43 cents, or 1%, at $40.87 a barrel. U.S. oil gained 43 cents, or 1.1%, at $38.99 a barrel. Both contracts fell more than 3% on Monday.
A lack of progress on agreeing a U.S. coronavirus relief package added to market gloom, although U.S. House of Representatives Speaker Nancy Pelosi said on Monday she hoped a deal can be reached before the Nov. 3 elections.
A wave of coronavirus infections sweeping across the United States, Russia, France and many other countries has undermined the global economic outlook, with record numbers of new cases forcing some countries to impose fresh restrictions as winter looms.
“We think demand from this point onwards is really going to struggle to grow. COVID-19 restrictions are all part of that,” said Commonwealth Bank of Australia (CBA) commodities analyst Vivek Dhar.
CBA expects U.S. oil to average $38 and Brent to average $41 in the fourth quarter this year.
Prices got some support from a potential drop in U.S. production as oil companies began shutting offshore rigs with the approach of a hurricane in the Gulf of Mexico.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Monday the worst is over for the crude market.
But his comment contradicted an earlier remark from OPEC’s secretary general, who said any oil market recovery may take longer than hoped as coronavirus infections rise around the world.
Meanwhile, Libyan production is expected to reach 1 million barrels per day (bpd) in the coming weeks, the country’s national oil company said on Friday, a quicker return than many analysts had predicted.
That is likely to complicate efforts by the Organization of the Petroleum Exporting Countries (OPEC) to restrict output to offset weak demand.
OPEC+ – made up of OPEC and allies including Russia – is planning to increase production by 2 million bpd from the start of 2021 after record output cuts earlier this year.
An analyst survey by Reuters ahead of data from the American Petroleum Institute on Tuesday and the U.S. Energy Information Administration on Wednesday estimated that U.S. crude stocks rose in the week to Oct. 23, while gasoline and distillate inventories fell.
Nigel Farage Urged to Highlight Perils of DIY Investing
Nigel Farage appears to be advocating a DIY approach to investing – and this could be “monumentally risky” for inexperienced investors, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The warning from Nigel Green, chief executive and founder of deVere Group, comes as a daily finance-orientated newsletter from the team of the Brexit Party leader and political activist urges its readers to “tell us about your successes by going it alone – leaving the money men and middlemen by the side of the road…”
Mr Farage’s email is provided for correspondence.
Mr Green comments: “Successful DIY (Do It Yourself) investing can be possible, but for most people it is not recommended – indeed, it could be a costly and traumatic accident waiting to happen.
“Going it alone can be monumentally risky for inexperienced investors as the complexities involved can sink their portfolios.
“Perhaps this is why around two-thirds of wealthy individuals have a professional financial adviser of some sort, according to new independent research from the University of Toronto.”
He continues: “I would urge anyone who extols the virtues of a DIY approach to investing to also underscore the risks and potential pitfalls to be avoided.”
A pro will help you make the best investment decisions in five key ways, says Nigel Green.
“First, helping you to diversify a portfolio. Spreading money around is vital to curb risk. However, it must be used correctly – diversification will only add real value if the new asset has a different risk profile.
“Second, investing with a plan: Unless you have a sound plan, you’re gambling, not investing.
“Third, avoiding emotional decisions. Overly emotional decisions can prove deadly when it comes to investments because they are blighted by prejudices and biases.
“Fourth, regularly reviewing your portfolio: Investments need to be consistently reviewed to ensure they still deserve their place in the portfolio and that they are still on track to reach your long-term financial objectives.
“Fifth, not focusing excessively on historical returns: The future investment situation is likely to be different from time-aged averages.”
The deVere CEO concludes: “While investing remains almost universally regarded as one of the best ways to create, grow and safeguard wealth, considering the pitfalls of getting it wrong, it could be an expensive mistake for you and your family not to seek professional advice.”
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