Global Market Review and Outlook

Global equities indices within our coverage sank further this week on the back of global economic woes. Equities within the BRICS region were generally down save for the Brazil Ibovespa which closed marginally higher by 0.5% W-o-W. This was consequent on the borrowing cost which was left unchanged by the Central Bank of Brazil as well the reduction in speculations about the resignation of the Finance Minister following budget turmoil. Conversely, the China Shanghai Composite index continued downhill, falling 2.2% despite efforts of the authority to ease sell offs. Also, the India BSE Sens weakened the most in the BRICS region, tumbling 4.5% W-o-W, while the Russian RTS and South African JSE fell 2.6% and 1.6% W-o-W respectively. Global equities indices within our coverage sink further this week on Global economic woes. This is coming amid IMF's comment during the week, stating that global equities market volatility occasioned by the Chinese market rout may drag Global growth below earlier estimate.

Equally, momentum in the developed markets further moderated ahead of the US August jobs data. Thus, the US S&P 500 and the NADSAQ closed 2.9% and 2.7% lower even as the UK FTSE slipped 2.5%. Similarly, the same negative trend was noticed in Euro-Asian markets as all indices within that region declined W-o-W. The Japan Nikkei took the highest hit amongst all global equities within our coverage, depreciating 7.0% on Chinese market worries which according to the IMF may hurt global growth. Equally closing southwards in the Eurasian region were the Hong-Kong Hang Seng (-3.6%), Franc CAC 40 (-2.8%) and Germany XETRA DAS (2.0%) closed down.

Indices within the African markets were largely positive leaving the Ghana GSE as the lone loser after shedding 2.6% W-o-W. On the other hand, the Egypt EGX 30 recorded the highest weekly gain with 3.1% W-o-W while the Nigeria NSEASI and Kenya NSE 20 also closed in green adding 2.0% and 1.3% W-o-W respectively.  

Daily Equities Market Review and Outlook
The Nigerian Equities market ended the week stronger, closing the last trading session for the week 0.4% higher after the All Share Index closed at 29,511.08 points. Market capitalisation equally improved N40.3bn to settle at N10.1tn for the week. Today's gain in index is attributable to appreciations in banking counters -- ZENITH (+3.9%), UBA (+10.1%) and FBNH (+5.0%). Market activities were however mixed as volume advanced 1.4% to 277.6m units while value declined 7.3% to N2.7bn.

Sector indices also closed in a mix today with the Banking basket leading gains. The Oil & Gas basket followed with 1.3% attributable to increases recorded in OANDO (+8.5%) and SEPLAT (+0.4%). The Insurance index also advanced 0.2%. On the other hand, against decline recorded in DANGCEM (-0.8%), the Industrial Goods basket led sector losers after shedding 0.5% while Consumer goods followed with a decline of 0.4%.

Market breadth, measured by the ratio of advancers to decliners remained positive at 1.8x after 32 stocks gained and 18 declined. At the close of trade, UBA (+10.1%), OANDO (+8.5%) and TRANSCORP (+6.1%) emerged the highest gaining stocks while GUINNESS (-7.7%), SKYE (-6.7%) and COSTAIN (-5.0%) topped the losers' chart. After two consecutive days of losses which we believe was mainly driven by Cement stocks, today's positive close indicated further interest in equities ahead of ministerial announcement by President Buhari later in the month. Hence, we advise investors to continue to be cautious while maintaining interest in tickers with sound fundamentals.

Weekly Equities Market Review and Outlook
The Nigerian equities market reversed W-o-W decline this week after posting gains on 3 out of 5 trading sessions. Thus, the benchmark index- All Share Index (ASI) - improved 2.4% W-o-W to close at 29,511.08 points. As a result, YTD loss improved to -14.8%. Also, market capitalization increased N239.5bn W-o-W to settle at N10.1tn for the week. We note that performance at the beginning of the week was largely driven by bargain hunting in bellwethers trading at significant discount to their fair prices, however investors were unsettled by news flows on reduction in the price of cement by Dangote Cement Plc. towards the end of the week. This triggered a sell-off in key counters in the Industrial Good sector, thus dragging the benchmark index lower on Thursday. Nonetheless, market activity strengthened W-o-W as average volume traded rose 19.0% W-o-W to 487.9m units while value traded surged 19.7% to N4.2bn W-o-W.

Performance across sectors trended mostly northward W-o-W as the Banking sector index led the pack, rising 8.5% W-o-W on price appreciation in UBA, up 26.6% following the release of its impressive H1:2015 result. Others include FBNH (+20.6%) and GUARANTY (+15.7%). The Consumer Goods sector trailed with 3.6% return W-o-W uplifted by gains in PZ (+21.1%), NIGERIAN BREWERIES (+13.0%) and GUINNESS (+10.8%). The Insurance index closed 2.9% higher W-o-W consequent on price upswing in NEM (+8.2%) and AIICO (+7.7%). However, the Industrial Goods index slipped 1.8% W-o-W as losses in DANGCEM (-1.2%) dragged the index following announcement of a slash in the price of cement on Thursday. Similarly, the Oil & Gas index depreciated 2.2% W-o-W.

Investor sentiments this week improved significantly as market breadth (advancers/decliners ratio) jumped to 2.9x from 0.2x in the previous week. This was on the back of the impressive appreciation in the prices of 57 stocks against depreciation in the prices of 20 stocks during the week. The best performing counters for the week were VONO (+29.3%), STANBIC (+27.5%) and UBA (+26.6%) while the worst performances were recorded in ETRANZACT (-17.9%), NEIMETH (-17.1%) and NESTLE (-10.7%). We believe investors renewed interest in equities was broadly driven by bargain hunting given the prolonged bearish run witnessed in the market throughout the month of August. We also believe this may be linked to early bird positioning ahead of ministerial appointments by the Buhari-led government. Thus, we advise investors to key in to value stocks trading at cheap valuation.

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