The global economy expanded for the eleventh consecutive month in May as growth in output and new business orders was sustained.
Notably, indexes for new business and new export orders expanded to 58.5 points and 54 points respectively (from 56.8 points and 53.9 points in April).
Input cost index also rose to 67 points (from 65 points) and was transferred to consumers as output price index rose to 59.1 from 55.9.
Expansion in business activity was partly spurred by increased business confidence amid increased rollout of Coronavirus vaccines which allowed for an easing of lockdowns in several countries.
According to the J.P. Morgan Global Composite Output Index, global business activities (manufacturing and services) expanded to 58.4 points in May 2021, faster than 56.7 points in April 2021.
Meanwhile, global inflation appeared to have increased in May amid expansionary economic policies, expanding input and output prices, rising energy prices and higher global food prices.
In Q1 2021, Nigeria recorded a 12.7% q-o-q increase in trade deficit to USD8.53 billion, driven by a 7.8% increase in imports to USD17.26 billion, higher than a 3.4% increase in exports to USD8.73 billion recorded during the period.
Nigeria’s business activity remained in expansion territory as the IHS Markit-Stanbic IBTC headline PMI rose to 54.4 points in May (from 52.9 points in April). Expansion in new orders and output was driven by higher demand requiring higher staffing to reduce existing backlogs and complete orders.
Depositors earned better interest on their deposits as 1-, 3- and 12-month deposit rates rose to 2.33%, 3.32% and 5.78% in April (from 2.06%, 3.03% and 4.94% in March) respectively. However, average savings rate was flat at 1.86%.
The local bourse witnessed bearish activity as investors stayed on the sidelines following the end of corporate releases which showed mixed performance.
This was also against the backdrop of the rising yield environment (stop rates of auctioned government securities trended higher) which continued to induce tepid sentiments.
The NSE ASI fell m-o-m by 3.5% to 38,437.88 points while market capitalization declined by 3.9% to N20.03 trillion. Consequently, year-to-date performance tanked by 4.6%.