Daily Market Report –September 8th, 2015

UPHOLD –Equities Sustain Positive Run.

Afrinvest Research reports that the Nigerian equities sustained bullish momentum into the third consecutive trading session after crossing the psychological line of 30,000 points yesterday.

The benchmark index advanced 102bps today to close at 30,358.87points, paring YTD loss to 12.4%. Market capitalization also added 105.4bn to close at N10.4tn. The improvement in the benchmark index today was on account of sustained bargain hunting in DANGCEM (+0.8%) and banking counters -- ZENITH (+8.8%), STANBIC (+3.8%) and UBN (+4.1%), ETI (+1.2%) and UBA (+2.4%). Similarly, market activity measured by aggregate volume and value traded rose 5.5% and 13.6% to 226.6m units and N2.0tn respectively.

Banking Index Retains Lead
Signaling the general positive sentiment in the market, all sector indices in the market closed in the green today, led by the banking Index (+2.5%) which retained its lead as the best performing index for the fourth consecutive trading session. The banking index has returned 20.0% since it reached its YTD low on August 26th as Tier-1 banks continued to record impressive half year earnings despite the challenging macroeconomic landscape. The Consumer Goods index followed with a 0.8% gain on the back of the rally in NIGERIAN BREWERIES (+2.2%); whilst Industrial Goods and Insurance Indices appreciated 0.4% apiece on account of sustained bargain hunting in DANGCEM (+0.8%) and MANSARD (+2.8%). The Oil & Gas indices gained a marginal 14bps as the gains recorded in OANDO (+2.2%) was offset by selloff in CONOIL (+9.7%).

Sentiment Remains Buoyant
Market Sentiment measured by breadth (advancer/decliner ratio) remained resilient at 2.2x as 37 stocks advanced against 17 decliners. The top advancers today include UBCAP (+9.7%), ZENITH (+8.8%) and ABCTRANS (+7.3%); whilst CONOIL (-9.7%), TRANSCORP HOTEL (-9.7%) and CAVERTON (-4.9%) led the losers' list. The sustained positive sentiment and improved activity in the bourse may be an indication that longer term investors are already taking positions in value stocks with the expectation that the economy will record greater certainty in the coming weeks as the President is set to form his cabinet in September. Although we continue to see value in Nigerian stocks, we suggest that investors with low risk appetite stay on dividend paying stocks as we continue to evaluate macroeconomic development.