Bargain Hunting Buoys Market Performance

On Thursday, investors bargain hunting in market bellwethers - NESTLE (+1.4%) and GUARANTY (+1.2%) - lifted the benchmark index up 0.4% to 32,228.50 points as market capitalisation gained N43.9bn to 11.8tn while YTD loss moderated to -15.7%. However, activity level weakened as volume and value traded dropped 55.5% and 71.6% to 200.1m and N2.7bn respectively. ACCESS (81.3m units), FBNH (31.7m units) and FCMB (N10.6m units) were top traded by volume while NESLTE (N1.2bn), ACCESS (N0.6bn) and FBNH (N0.2bn) were top traded stocks by value.
Mixed Sector Performance
Performance across sectors was mixed as 3 of 5 indices under our coverage closed in the green. The Banking index appreciated the most, up 1.0%, following buy interest in GUARANTY (+1.2%) and ZENITH (+1.3%) and FBNH (+2.0%). Similarly, the Insurance and Consumer Goods indices trailed as they gained 0.7% and 0.4% respectively, due to increasing investors’ appetite for NEM (+4.8%), AIICO (+1.6%), NESTLE (+1.4%) and NIGERIAN BREWERIES (+0.1%).  On the flipside, the Industrial Goods shed the most, down 0.3% due to price depreciation in CCNN (-9.9%) despite buy interest in CAP (+3.3%). Also, the Oil & Gas index lost 0.9% following sell-offs in MOBIL (-7.2%).

Investor Sentiment Further Strengthened
Investor sentiment as measured by market breadth (advance/decline ratio) strengthened to 1.3x from 1.1x as 19 stocks advanced compared with 15 decliners. UNITYBNK (+9.2%), UBN (+8.2%) and FIRSTALUM (+6.1%) were today's outperforming stocks while CCNN (-9.9%), PHARMDEKO (-9.5%) and FLOURMILL (-9.5%). Although we observed a positive performance today supported by the improvement in market breadth, we believe that the market will under perform in tomorrow's session due to historical trend. Thus, we retain our bearish market outlook over the near term.