Stock Exchange Index Rebounds

The equity market rebounded today from a streak of losses as the broader index appreciated 0.8% to close at 25,471.69 points, paring YTD loss to 5.2% while market capitalization added N71.1bn to settle at N8.8tn. The uptrend in the All Share Index was largely as a result of renewed buy sentiment in mid-cap counters in the Industrial and Oil & Gas sectors - WAPCO (+10.2%), MOBIL (+10.3%) and OANDO (+10.1%) - as well as bargain hunting in GUARANTY (+1.4%). Market activity level however softened as volume and value traded dipped 11.9% and 30.4% to close at 158.7m units and N1.1bn respectively.

All Sectors Close in the Green
It was a bullish performance across sectors as all indices closed in the green. The Industrial Goods index (+4.4%) topped the chart on account of gains in WAPCO (+10.2%). The Oil & Gas and Banking indices followed, adding 3.3% and 1.2% on the back of maximum gains in MOBIL (+10.2%) and OANDO (+10.1%) as well as bargain hunting in GUARANTY (+1.4%) and ZENITH (+1.4%). MOBIL was recently fully divested by ExxonMobil and the new majority shareholder is mandated by the Investment and Securities Act to make a take-over bid to all minority shareholders at acquisition price of N417.12 per share; thus, we expect market price to converge with the acquisition price in the near term. Similarly, the Consumer Goods and Insurance indices advanced 0.1% apiece, driven by renewed buying interest in 7UP (+10.2%) and CONTINSURE (+4.5%).

Investor Sentiment in the Positive Region
Investor sentiment improved today as market breadth (advancers/decliners ratio) advanced to 1.6x (from 0.9x yesterday). At the summit of the gainers chart were MOBIL (+10.2%), WAPCO (+10.2%) and 7UP (+10.2%) while TRANSEXPR (-8.1%), FIDSON (-5.0%) and PZ (-4.9%) were today’s worst performers. Value investing in stocks trading at attractive prices, as against short term speculative moves, prompted the strong gains recorded today and we expect the sentiment to prevail in subsequent trading session. We draw our conclusion from the impressive market breadth and strong order flow.

NASD OTC Exchange Market Activities
In the NASD OTC exchange, the total volume and value of transactions traded were 10,160 units and N1.4m respectively while only 3 counters traded today. The volume and value traded declined by 75.0% and 2.6% respectively.