Equities Market Sustains Uptrend

The Nigerian Equities market trended northwards for the 2nd consecutive day as bargain hunting drove the All Share Index 0.5% higher to settle at 24, 748.95 points. Also, market capitalisation rose N43.3bn to N8.5tn. The major drivers of the positive close were GUARANTY (+2.9%), ZENITH (+2.4%) and NIGERIAN BREWERIES (+0.6%). Activity level in the market waned as volume and value traded fell 30.5% and 22.8% to 158.8m units and N1.1bn respectively.

Banking Index Leads Sector Gainers
The improvement in performance resonated across sectors as all indices save for the Industrial Goods index which closed flat, improved. The Banking sector index advanced the most, up 1.9% following gains in GUARANTY (+2.9%) and ZENITH (+2.4%). Relatedly, Union Bank Plc released its Q1:2016 result which was quite impressive as PAT surged 108.1% Y-o-Y to N4.6bn owing to the 53.1% Y-o-Y decline in Credit impairment charges despite the 3bps rise in Gross Earnings and this may have driven the 2.4% rally in the stock today. Similarly, the  Consumer Goods and the Oil & Gas indices appreciated 0.6% and 0.5% respectively on account of gains in NIGERIAN BREWERIES (+0.6%) and OANDO (+4.9%) while the Insurance index appreciated 0.2%.

Positive Sentiments Persist
Sentiments in the market stayed positive today as 23 stocks gained while 11 declined, leading to a market breadth (advancers/decliners) of 2.1x. The gainers chart was topped by TIGERBRANDS (+10.0%), ETERNA (+9.4%) and UAC-PROP (+5.0%) while SKYEBANK (-5.9%), AIRSERVICE (-5.0%) and CUSTODYINS (-4.9%) were the worst performing stocks. Notwithstanding uptrend observed in the last two sessions, we believe short term outlook for equities remains somewhat bearish. Thus, we expect speculators to take profit in the sessions ahead.

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