Equities Market Opens on a Positive Note

Photo L-R: Bola Adeeko, Head, Shared Services Division, The Nigerian Stock Exchange (NSE); Oscar Onyema, Chief Executive Officer, NSE; Patrick Ezeagwu, Chairman, Association of Stockbroking Houses of Nigeria (ASHON) and Sam Onukwue, Vice Chairman, ASHON during the signing of Memorandum of Understanding (MoU) between NSE and ASHON on Lagos Commodity Exchange at the Exchange on Monday in Lagos.

The equities market opened the week on a positive note as the All Share Index (ASI) rose 1.2% to 44,306.48 points while YTD return improved to 15.9%. Accordingly, investors gained N191.0bn in value as market capitalization grew to N15.9tn. Today’s performance was largely driven by buying interest in DANGCEM (+3.0%), FBNH (+2.7%) and UBN (+4.5%) although a broad-based rally was observed across sectors. On the contrary, activity level declined as volume and value traded fell 39.3% and 17.5% to 573.3m units and N5.9bn respectively.

Industrial Goods Index Leads Gainers
Sector performance was largely bullish as 4 of 5 indices closed northwards. The Industrial Goods index led gainers, up 1.7% owing to a rally in DANGCEM (+3.0%), WAPCO (+0.7%) and CCNN (+0.6%). The Banking index trailed, rising 0.9% largely due to buying interest in DIAMOND (+9.8%), UBN (+1.0%) and UBA (+1.6%). Similarly, the Insurance and Oil & Gas indices appreciated 0.6% and 0.3% respectively as investors took positions in AIICO (+6.8%), WAPIC (+4.9%) and FORTE (+1.2%). On the flip side, the Consumer Goods index was the lone loser, shedding 0.7% as DANGSUGAR (-4.6%) GUINNESS (-1.8%) and NIGERIAN BREWERIES (-1.2%) recorded losses.

Investor Sentiment Softens
Investor Sentiment, measured by market breadth (advance/decline ratio) softened to 3.4x from 3.6x recorded the previous Friday consequent on 40 stocks advancing relative to 12 stocks that declined. The best performing stocks were DIAMOND (+9.8%), TRANSCORP (+9.8%) and CILEASING (+9.7%) while DANGSUGAR (-4.6%), REDSTAREX (-4.5%) and LASACO (-4.0%) were the worst performers. In a related news, the NSE implemented the revised par value rule today, indicating a price floor of N0.01 for stocks traded on the stock exchange. As a result, only four stocks –ABCTRANS (-4.0%), ROYALEX (-4.0%), PRESTIGE (-4.0%) and LASACO (-4.0%) traded below the previous price floor of N0.50, closing at N0.48 each respectively. This week, we expect market performance to be largely mixed although skewed to the positive as investors position in previous decliners.

In the NASD OTC Exchange, total volume and value traded was 8,500 units and N1.3m respectively. The SDFCWAMCO was the only instrument traded on Monday.