Bellwethers Rally Raises Benchmark Index

The All Share Index appreciated 0.6% to close at 24,964.63 points as the Nigerian Bourse ended today’s trading session in the green zone. Market capitalization also improved N53.4m today to close at N8.6tn. Today’s uptrend was on the back of gains in bellwether equities across sectors, including DANGCEM (+1.5%), NIGERIAN BREWERIES (+4.1%) GUARANTY (+2.5%) and TOTAL (10.1%).  Market activity also strengthened as volume and value traded grew 18.7% and 48.0% respectively to settle at 338.3m units and N2.0bn.
Mixed Performance across Sectors
The Banking and Consumer Goods indices appreciated 1.6% and 0.7% respectively on the back of bargain hunting activities in NIGERIAN BREWERIES (+4.1%) and price appreciation in FLOURMILL (5.0%), GUARANTY (+2.5%), ACCESS (+2.8%), WEMA (+5.3%) even as Wema Bank Plc released Q1 2016 results that showed a decline of 17.9% in PAT earlier today. The Insurance index gained a marginal 7bps. On the flipside, the Industrial Goods index (-0.9%) was dragged into the red zone by a 5.0% decline in WAPCO which offset a 1.5% gain DANGCEM (+1.5%). The sell pressure in WAPCO was on the back of the company’s disappointing Q1 2016 result released today which showed a Loss After Tax of -N1.9bn from a profit position of N5.8b in Q1 2015. The Oil & Gas index (-1.2%) also ended today’s trading session in the red zone as the 10.1% uptrend in TOTAL was unable to offset the impact of the continuous sell pressure in FORTE OIL (-5.0%). Total Nigeria Plc released Q1 2016 results yesterday with PAT up by an impressive 529.8% to N2.8bn.
Investor Sentiment Remains Weak
Similar to yesterday’s trading session, investor sentiment remained weak today. Market breadth (advancers’/decliners’ ratio) closed at 0.8x (from 0.9x) on the back of 18 advancing stocks against 22 declining stocks. Leading the gainers were TOTAL (+10.1%), WEMA (+5.3%) and FLOURMILL (+5.0%) while MAYBAKER (-5.9%), FORTE OIL and WAPCO (-5.0% a piece) topped the losers’ list. Earnings releases have been broadly mixed with few companies outperforming market expectation while forward earnings expectation continues to be dictated by macroeconomic factors. With not so much positive development in the macro scene to bolster investor sentiment amidst an influx of mixed earnings releases, we believe that investor sentiment may remain soft in tomorrow’s trading session.