Stock Market Investors Remain Upbeat

At the close of trade on Tuesday, the benchmark index sustained a 5-day long positive momentum owing to sustained buying interest in Consumer Goods bellwethers and mid-cap banking stocks. Performance was largely driven by gains in NESTLE (+9.0%), NIGERIAN BREWERIES (+5.0%), STANBIC (+4.0%) and ETI (+3.9%) as the All Share Index advanced 1.3% to close at a 34-month high of 37,999.56 points, driving YTD return to 41.4%. Consequently, investors added N163.4bn as market capitalization settled at N13.1tn. Activity level however declined as volume and value traded slid 14.3% and 12.5% to 218.2m units and N5.1bn respectively.

Bearish Performance across Sectors
Performance across sectors was bearish as all indices closed in the red save for the Consumer Goods index which closed 5.4% higher owing to gains in NESTLE (+9.0%) and NIGERIAN BREWERIES (+5.0%). On the flip side, the Oil & Gas and Insurance indices dipped 0.8% and 0.6% respectively due to sell offs in OANDO (-3.9%), CONOIL (-5.0%), MANSARD (-2.4%) and NEM (-3.5%). Negative sentiment towards DANGCEM (-0.3%) and CCNN (-0.2%) dragged the Industrial Goods index 0.2% lower, whilst the Banking index slid 0.1% on account of losses in ZENITH (-2.4%) and UBA (-1.2%).

Market Breadth Improves
Investor sentiment measured by market breadth came in strong at 1.5x (relative to 0.8x on Monday) as 30 stocks appreciated against 20 decliners. The best performing stocks were GUINNESS (+10.3%), DANGFLOUR (+10.2%) and NAHCO (+10.0%) while MORISON (-8.9%) CAVERTON (-8.7%) and CONOIL (-5.0%) declined the most.  In subsequent trading sessions, we expect performance to be shaped by the release of outstanding earnings scorecards, particularly among Tier-1 players in the Banking sector. Whilst we largely expect performance to be positive over the medium term, the momentum is expected to soften as short term traders take profit in subsequent sessions.