This past week, interest in the local equities market remained strong. Investors were attracted by the currently low market valuation amidst the continued low yield environment in the fixed income space. The performance also reflects an improvement in risk appetite despite looming uncertainty surrounding the business terrain due to the pandemic. Furthermore, trading opened the week positive on Monday (+2.1%) while Tuesday was met with a whopping 4.9% gain (the highest on record since April 2015), due to buying interest in DANGCEM, MTNN and ZENITH. However, the market shed gains in subsequent sessions as some investors booked profit.
Consequently, the All-Share index rose 5.6% w/w to 28,415.31 points, market capitalisation hit ₦14.9tn (+₦777.9bn w/w) while YTD return settled at 5.9%. Capturing the pick-up in activity level, average volume and value traded advanced 87.9% and 82.3% to 376.3m units and ₦3.9bn respectively. The banking stocks were the most active as ZENITH (530.7m units), FBNH (287.9m units) and UBA (273.6m units) led by volume while ZENITH (₦10.5bn), GUARANTY (₦5.3bn) and UBA (₦1.9bn) led by value.
Sector performance was impressive as all sectors under our coverage gained w/w. The AFR-ICT and Banking indices gained the most, up 8.0% and 7.8% respectively due to buy interest in MTNN (+8.1%) and AIRTELAF (+7.9%) as well as FBNH (+19.2%) and ACCESS (+18.4%). Similarly, price appreciation in DANGCEM (+4.2%) and WAPCO (+12.2%) buoyed the Industrial Goods index by 2.8% w/w. Lastly, the Consumer Goods, Oil & Gas and Insurance indices appreciated 2.0% apiece due to price accretion in INTBREW (+21.0%), ETERNA (32.5%) and LINKASSURE (15.8%).
Investor sentiment as measured by market breadth (advance/decline ratio) improved to 4.1x from 2.4x last week as 53 stocks gained against 13 that declined. ETERNA (+32.5%), INTBREW (+21.0%) and AFRIPRUD (+20.6%) led gainers while UACPROP (-12.0%), TRIPPLEG (-10.0%) and DEAPCAP (-10.0%) led the decliners. While we expect the soft gains in the domestic market to be sustained, we note that investors are likely to extend the profit taking activities into the week ahead. Hence, we maintain a bearish outlook.