Equities Rebound on Bargain Hunting

The equities market shook off the bearish start to the week as the benchmark index gained 0.5% to close at 27,493.12 points at the end of Tuesday’s trading session. Investors also gained N42.8bn as market capitalization settled at N9.4tn. Bargain hunting in DANGCEM (+1.2%), NIGERIAN BREWERIES (+1.3%), 7UP (+9.4%) and GUARANTY (+0.6%) largely buoyed performance. Similar to overall market performance, activity level also strengthened significantly as volume and value traded jumped 174.5% and 285.5% to 230.1m units and N2.7bn respectively whilst total deals transacted increased to 3,536 from yesterday’s 2,279.
Consumer Goods Index Leads Sector Gainers
Performance across sectors was mixed as the Consumer and Industrial Goods indices appreciated 0.7% and 0.6% respectively on the back of uptrend in DANGCEM (+1.2%), NIGERIAN BREWERIES (+1.3%) and 7UP (+9.4%) whilst the Insurance index rose 0.1% as a result of gains in CUSTODIAN (+1.0%) and CONTINSURE (+1.1%). On the other hand, the Banking index declined 0.5% as ZENITH (-2.3%) and UBA (-2.5%) trended southward. Similarly, selloffs in OANDO (-1.8%) and CONOIL (-5.0%) pulled the Oil & Gas index 0.6%lower.
Strengthening Investor Sentiment
Market breadth (advancers/decliners ratio) strengthened to 0.9x (from 0.6x yesterday) as a result of 17 advancers against 18 decliners.  The best performing stocks were 7UP (+9.4%), NAHCO (+8.4%) and SKYE (+5.0%) while MAYBAKER (-8.9%), CONOIL (-5.0%) and CUTIX (-4.8%) were the worst performing stocks. Despite subsisting weak macroeconomic fundamentals and high discount rate anchoring investor sentiment, market performance today was dictated by bargain hunting as short term investors continue speculative activities. Nonetheless, we do not expect the bullish trend to persist and expect the market to continue to trade sideways.