During the week, the CBN held its first monetary policy committee (MPC) meeting for the year on the backdrop of dampened optimism for improvement in global output recovery, associated with the resurgence of the COVID-19 pandemic and mild success with vaccinations across several countries. At the end of the 2-day meeting, the MPC voted to retain all monetary parameters. We believe this decision is positive and much in line with our firm view as an extension of the current monetary easing would be supportive of the expected recovery in the domestic economy. We believe this provides clarity for the market and should drive increased activities in the equities market while we expect fixed income traders to remain active at the short end of the market.
The domestic equities market reversed last week’s bearish sentiment, posting a positive performance following gains on all trading sessions. Accordingly, the NSE All Share Index rose 3.4% w/w to settle at 42,412.66 points on the back of buying interest in AIRTELAF (+9.2%), MTNN (+6.5%) and WAPCO (+15.4%). Similarly, YTD return improved to 5.3% while market capitalisation advanced ₦737.9bn w/w to close at ₦22.2tn. Activity level strengthened as average volume and value rose 20.6% and 14.4% to 514.0m units and ₦5.6bn respectively. The top traded stocks by volume were TRANSCORP (228.3m units), ZENITH (117.3m units) and UBA (97.2m units) while AIRTELAF (₦3.2bn), ZENITH (₦3.1bn) and GUARANTY (₦2.2bn) led by value.
Performance across sectors was largely bullish as 5 of 6 indices under our coverage trended northward w/w. The AFR-ICT and Banking indices advanced 7.8% and 3.3% respectively on the back of buying interest in AIRTELAF (+9.2%), MTNN (+6.5%), GUARANTY (+4.2%) and ZENITH (+2.6%). Trailing, the Insurance and Industrial Goods indices rose 1.7% and 1.4% respectively on account of gains in AIICO (+7.7%), MANSARD (+9.4%) and WAPCO (+15.4%). Similarly, investors took position in FLOURMILL (+8.4%), DANGSUGAR (+5.2%) and NIGERIAN BREWERIES (+3.3%), resulting in an increase of 1.3% in the Consumer Goods index. Conversely, the Oil & Gas index was the lone laggard, down 7.2% due to sell-offs in SEPLAT (-9.3%), MOBIL (-8.6%) and ARDOVA (-7.1%).
Investor sentiment as measured by market breadth (advance/decline ratio) weakened to 1.4x from 1.9x as 40 stocks advanced against 29 that declined. The top performing stocks for the week were CHAMPION (+59.5%), FIDSON (+30.1%) and MAYBAKER (+27.4%) while SOVRENINS (-21.2%), ACADEMY (-17.5%) and NIGERINS (-14.8%) were the laggards. In the coming week, we expect to see slight profit-taking at the start of the week. However, we envisage market performance will be dictated by the performance of the earnings results.