January Effect drives Equities Northward

The equities market reversed the negative performance from the previous trading session as the All Share Index rose 1.3% on Thursday to settle at 38,676.12 points while YTD gain expanded to 1.1%. The rally in the market can largely be attributed to the “January effect”- a period in which there is increased buying activity at the start of the year. As a result, market capitalization grew by N174.0bn to N13.8tn. The market’s positive performance can be broadly attributed to gains in GUARANTY (+3.8%), ZENITH (+5.0%) and UBA (+4.4%). Similarly, activity level improved as volume and value traded advanced 40.0% and 83.2% to 825.1m units and N3.9bn respectively.
Bullish Sector Performance
Performance across sectors was largely positive as all indices closed in the green save the Consumer Goods index which shed 0.2% on the back of losses in NESTLE (-3.6%) and PZ (-3.8%). On the flip side, the Banking index led the gainers chart, up 3.9% due to price appreciation in GUARANTY (+3.8%), ZENITH (+5.0%), UBA (+4.4%) and DIAMOND (+9.9%). The Oil & Gas index followed, up 2.1% as investors took position in SEPLAT (+3.8%), FORTE (+5.0%) and CONOIL (+5.0%). Similarly, DANGCEM (+0.1%), WAPCO (+4.3%), MANSARD (+3.8%) and LINKASSURE (+4.2%) drove the Industrial Goods (+1.8%) and Insurance indices (+1.0%) higher.

Market Breadth Improves
Market breadth (advance/decline ratio) – a measure of investor sentiment- improved significantly to 8.2x from 3.4x recorded yesterday consequent on 49 stocks advancing against 6 decliners. Today’s top performers were DANGFLOUR (+10.1%), MAYBAKER (+10.0%) and DIAMOND (+9.9%) while NEM (-4.8%), CUSTODIAN (-4.8%) and NEIMETH (-4.3%) were the worst performers. In line with expectation, the market closed in the green today, hence we anticipate a positive close at the end of the week buoyed by a broad based rally.