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Nigerian equities mark seventh bullish week in a row

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Despite sustaining weekly positive sentiments, the bullish momentum in the local bourse lost steam as investors took a breather to digest corporate earnings released thus far.

In terms of activity levels, volume grew by 8.2 per cent w/w while value declined 4.1 per cent w/w.

Supported by gains on the second (+0.8  per cent) and last trading (+0.9 per cent) days, the All-Share Index crawled above the 31,000 points psychological mark, closing at 31,016.17 basis points last week.

Notably, investors’ interest in DANGCEM (+9.1 per cent), DANGSUGAR (+19.6 per cent), and GUARANTY (+3.1 per cent) drove the benchmark index 1.6 per cent higher, its seventh-consecutive weekly gain.

The month-to-date (MtD) return stood at 1.6 per cent while the year-to-date (YtD) return for index grew to 15.6 per cent.

Performance across sectors was broadly positive. Save for the Oil and Gas which declined by -0.8 per cent which declined, the Industrial, banking, insurance and consumer goods indices shot up by +2.9 per cent, +2.2 per cent, +1.3 per cent and +0.6 per cent respectively.

According to investment analysts at Cordros Capital, as the Q3 earnings season winds down, “we expect investors to shift their attention to yet to be published results from the big banks (FUGAZ) in the week ahead.

“In the short term, we still see scope for expansion in valuation multiples as hunt for alpha-yielding opportunities in the face of increasingly negative real returns in the fixed income market remain positive for stocks.

“However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”

In their reaction to the weekly performance and outlook for the new week, Investdata analysts expect intraday oscillation to continue, as investors expect more banking results while analyzing the numbers released so far to reposition their portfolios on the strength of sector and company performance.

“There was a reversal in direction at the end of trading as NSE index action and indicators consolidated, turning up to look the same direction on above average traded volume and positive buying sentiment.

“Again, the current undervalue state of the market offers investors opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation for the rest of the year,” said Ambrose Omordion, leading analyst at the firm.

Meanwhile, a total turnover of 2.07 billion shares worth N22.64 billion in 25,187 deals were traded last week by investors on the floor of the exchange, in contrast to a total of 1.91 billion shares valued at N23.61 billion that exchanged hands the previous week in 23,578 deals.

The financial services industry (measured by volume) led the activity chart with 1.58 billion shares valued at N13.73 billion traded in 14,521 deals; thus contributing 76.21 per cent and 60.63 per cent to the total equity turnover volume and value, respectively.

The consumer goods Industry followed with 178.57 million shares worth N3.61bn in 4,669 deals while the third place was the conglomerate industry, with a turnover of 102.69 million shares worth N155.19m in 599 deals.

Trading in the top three equities namely Access Bank Plc, FBN Holding Plc and Zenith Bank Plc (measured by volume) accounted for 686.34 million shares worth N7.6 billion in 4,557 deals, contributing 33.21 per cent and 33.57 per cent to the total equity turnover volume and value, respectively.

On the bourse, 40 equities appreciated in price during the week, lower than 68 equities in the previous week.

Market analysis showed that 24 equities depreciated in price, higher than six equities in the previous week, while 97 equities remained unchanged, higher than 94 equities recorded in the previous week.

A total of 238,441 units of ETPs valued at N2.05 billion were traded last week in eight deals compared with a total of 262,849 units valued at N2.16 billion transacted last week in 52 deals.

A total of 6,011 units of bonds valued at N7.54 million were traded this week in 14 deals compared with a total of 7,730 units valued at N9.21 million transacted last week in 15 deals.

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