Market Closes Flat as Sentiment Improves

The equities market closed in the green although flattish as gains in DANGECM pulled the All Share Index (ASI) 4bps higher to 43,073.42 points while YTD return stood at 12.6%. Accordingly, market capitalization increased by N6.0bn to N15.4tn. Today’s performance was largely driven by price appreciation in DANGCEM (+1.3%) which offset losses in ZENITH (-1.8%), UNILEVER (-4.9%) and DANGSUGAR (-4.5%); ex-DANGCEM the ASI would have shed 48bps. Activity level was however mixed as volume traded fell 5.4% to 407.8m units while value traded inched 9.9% higher to N6.0bn. The top traded stocks by volume today were ZENITH (70.2m), FBNH (53.0m) and MANSARD (50.4m) while ZENITH (N2.1bn), NIGERIAN BREWERIES (N0.6bn) and FBNH (N0.6bn) were the top traded stocks by value.

Oil & Gas Index Leads Gainers
Performance across sectors was mixed as 3 of 5 indices closed northwards. The Insurance index appreciated the most, up 1.3% as investors took position in NEM (+1.7%), LINKASSURE (+0.9%) and MANSARD (+0.9%). The Oil & Gas and Industrial Goods index trailed, up 0.9% and 0.7% respectively following gains in MOBIL (+5.0%), TOTAL (+1.2%) and DANGCEM (+1.3%). On the flip side, the Banking index shed 0.8% on the back of sell offs in bellwethers - ZENITH (-1.8%), GUARANTY (-0.5%) and ETI (-1.0%). The losses recorded in ZENITH today is surprising as we expected a positive reaction from the release of an impressive FY:2017 result. Also, the Consumer Goods index fell 0.4% as UNILEVER (-4.9%) and DANGSUGAR (-4.5%) recorded losses.

Investor Sentiment Improves
Investor sentiment measured by market breadth (advance/decline ratio) improved - albeit still negative - to 0.7x from 0.5x recorded yesterday consequent on 26 stocks that advanced relative to 37 decliners. The best performing stocks were CUTIX (+6.1%), MOBIL (+5.0%) and LINKASSURE (+4.9%) while JAPAUL OIL (-8.3%), FTNCOCOA (-6.5%) and UNITYCAP (-8.3%) led laggards. Although performance was largely flattish, we expect investors' reactions to FY:2017 earnings to drive market performance in the near term.