Weekly Equities Market Review and Outlook

Photo L-R:  Yetunde Ojo, Head, Technology, The Nigerian Stock Exchange (NSE); Boma Beddie, Member, United Kingdom Trade & Investment (UKTI); Ahmed Bashir, MBE, Acting Deputy High Commissioner & Director UKTI; Ade Bajomo, Executive Director, Market Operations and Technology, NSE;  John Howell, MP, Trade Envoy to Nigeria; Ufuoma Odiete, Trade Development Manager UKTI; Laura Mackie, Personal Assistant to Trade Envoy; Olumide Lala, Head, Transformation and Change, NSE and Ade Ewuosho, Head, Market Services, NSE at the Closing Gong Ceremony at The Exchange during the week.

 

The performance of the Nigerian equities market was mixed during the week as the broader index advanced on 2 days and declined on 3. A 5-day losing streak extended to the 6th on the first trading day of the week as the benchmark index slid 0.1%. However, on Tuesday, as the market anticipated the outcome of the 4th MPC meeting of the year which was decidedly hawkish, investors took positions in banking stocks on expectation of a tighter monetary policy which would have positive knock-on impact on banking profitability.

The Banking index gained 4.9% and this drove the All Share Index (ASI) to a positive close (+1.1%) ending the 6-day bearish streak. The positive sentiments filtered into Wednesday as investors’ appetite for Tier-1 banks strengthened further. However, the positive trend was bucked on Thursday as profit taking thrived in the market, dragging the ASI to a 0.6% loss. Profit taking pressures extended to Friday’s trading session (-0.1%).

Despite the losses recorded in the latter part of the week, the gains from Tuesday and Wednesday were sufficient to drive the index 1.3% northwards W-o-W to 28,009.93 points while YTD return on the benchmark pared to –2.2%. Market capitalization rose N120.4bn to close at N9.6tn. Similarly, activity level strengthened as average volume and value traded were up 34.7% and 74.7% to 363.6m units and N3.2bn respectively.

The Banking index appreciated the most, up 9.1% during the week on account of bullish sentiment in Tier-1 counters led by GUARANTY (+14.4%) and ZENITH (+9.4%). Similarly, the Insurance index improved 1.9% on account of gains in CUSTODYINS (+10.5%) and MANSARD (+10.3%). On the flipside, the Oil & Gas index depreciated 5.2% against the backdrop of losses in FORTE (-10.0%) and SEPLAT (-9.7%) followed by the Industrial Goods index which closed 2.2% lower. The Consumer Goods index followed suit, falling 0.4% on the back of losses in PZ (-9.7%) and GUINNESS (-2.1%).

Investor sentiment strengthened during the week and this is buttressed by the market breadth (advancers/decliners ratio) which settled at 1.1x from 0.3x in the previous week, following 33 stocks that advanced against 31 which declined. The top gainers for the week were GUARANTY (+14.4%), CUSTODYINS (+10.5%) and MANSARD (+10.3%) while SKYEBANK (-17.7%), NEM (-12.0%) and REDSTAREX (-10.6%) declined the most. As more corporate earnings for H1:2016 are expected to trickle in, we believe this will be a determinant of market performance in the coming week.

Category: 
myfinancialintelligence.com