Domestic Equities Market: The Bulls Remain Resilient

The equities market sustained last week’s positive performance as investors ignored the violence and unrest in the country and positioned ahead of the release of Q3 earnings. The local bourse recorded gains on 3 of the 5 trading sessions and as a result, the All-Share index increased 13bps w/w to 28,697.06 points. Furthermore, investors gained ₦19.7bn as market capitalisation rose to ₦15.0tn while YTD return improved to 6.9%. Activity level fell as average volume and value traded declined 23.0% and 14.4% to 301.1m units and ₦3.9bn respectively. The most traded stocks by volume were UBA (172.7m units), GUARANTY (158.6m units) and ZENITH (149.4m units) while GUARANTY (₦4.8bn), ZENITH (₦3.1bn) and UBA (₦1.2bn) led by value.

Performance across sectors was bearish as 4 of 6 indices under our coverage declined w/w. The Consumer Goods and AFR-ICT indices were the outliers, up 2.9% and 2bps respectively as a result of price appreciation in CHAMS (+5.0%), INTBREW (+18.2%) and NASCON (+10.0%). On the other hand, the Banking index led the laggards, down 1.4% following sell-offs in WEMABANK (-5.1%) and FBNH (-4.7%). The Oil & Gas and Insurance indices also lost 0.7% and 0.6% respectively following price declines in ETERNA (-9.0%), LINKASSURE (-9.1%) and MBENEFIT (-4.8%). Lastly, price weakness in WAPCO (-5.0%) dragged the Industrial Goods index lower by 0.1% w/w.

Investor sentiment as measured by market breadth (advance/decline ratio) fell to 0.8x from 1.8x last week as 28 stocks gained against the 34 that declined. INTBREW (+18.2 %), CUTIX (+17.3%) and NASCON (+10.0%) led the top gainers while NNFM (-9.9%), LINKASSURE (-9.1%) and ETERNA (-9.0%) led the decliners. We believe the trend in corporate earnings releases would influence market performance in the coming week.