At the start of trading this week according to a report by Afrinvest note to investors said that bargain hunting in fundamentally sound stocks buoyed market performance extending last week gains. Consequently, the Nigerian Stock Exchange NSE, All-Share Index closed in the green on 3 of the 4 trading sessions during the week, as the benchmark index rose 2.0 per cent week on week to settle at 26,851.68 points. Similarly, YTD return improved to -14.6 per cent while market capitalisation gained N261.3 billion week on week to close at N13.1 trillion. Activity level advanced as average volume and value traded rose 26.2 per cent and 129.7 per cent to 470.0 million units and N5.6 billion respectively.
The top traded stocks by volume were ZENITH (662.0m units), ACCESS (404.8m units) and UBA (143.4m units) while ZENITH (N11.9bn), NIGERIAN BREWERIES (N6.5bn) and ACCESS (N4.1bn) led trades by value. The domestic equities market opened the week on a bullish note as the ASI rose 54bps following buying interest in DANGCEM, CCNN and ACCESS. However, on Wednesday, the benchmark index dipped 37bps due to sell pressures in bellwether stocks – GUARANTY, SEPLAT and DANGCEM. Price appreciation in GUARANTY, ZENITH, FBNH and CCNN drove the market performance significantly higher by 184bps and 3bps on Thursday and Friday respectively.
Performance across sectors was mixed as 3 of the 6 indices under our coverage trended northward W-o-W. The Banking index gained the most, up 6.8% due to buying interest in WEMABANK (+28.8%), FBNH (+18.1%) and UNITYBNK (+17.5%). Similarly, the Industrial and Consumer Goods indices trailed, advancing 3.2% and 2.6% respectively on account of price appreciation in CCNN (+14.3%), GUINNESS (+22.7%) and DANGSUGAR (+17.6%). Conversely, the Oil & Gas index led laggards, down 1.8% as TOTAL (-10.0%) and SEPLAT (-2.7%) recorded losses. The Insurance index fell 0.6% on the back of sell-offs in CONTINSURE (-5.0%) while profit-taking in MTNN (-0.8%) dragged the AFR-ICT index downwards by 0.5%.
Investor sentiment strengthened as market breadth (advance/decline ratio) improved to 3.5x from 1.0x in the previous week, following 38 stocks advancing against 11 that declined. The top performers for the week were WEMABANK (+28.8%), CORNERSTONE (+26.5%) and GUINNESS (+22.7%) while TOTAL (-10.0%), LEARNAFRICA (-9.4%) and UNILEVER (-5.6%) led laggards. In the coming week, we expect to see gains in fundamentally sound stocks as investors’ sentiment towards the equities market improves. Nonetheless, we maintain that this might be short-lived as economic buffers are still absent.
