Nigeria Equity Watch | 31 Aug 2015 : Nigerian Equities Open Higher… NSE ASI Advances 3.0%

Lagos, Nigeria (Capital Markets in Africa — The Nigerian bourse drove closer to the 30,000pts psychological level today, starting the week on positive note. The All Share Index (ASI) surged 3.0% (the highest in since the Buhari rally in 2^nd of April 2015) to settle at 29,684.84pts at the close of trade. Market capitalization also improved N299.3bn to berth at N10.2tn. Notably, the gain in the ASI was driven by large swings recorded in NIGERIAN BREWERIES (+5.0%), DANGCEM (+1.5%) and GUARANTY (+5.5%). Market activities measured by aggregate volume and value of shares traded were mixed as volume appreciated 37.1% to 510.4m while value fell 18.8% to 3.5bn.

All sector indices closed in green today. The Banking basket led sector gainers with 5.0% return attributable to appreciations in GUARANTY (+5.5%) and ZENITH (+4.9%). Likewise, on the back of gains in NIGERIAN BREWERIES (+5.0%) and GUINNESS (+9.4%) the Consumer Goods sector improved 3.6%. The Industrial Goods index trailed with 2.1% return consequent on improvements in DANGCEM (+1.5%) and WAPCO (+3.1%). The Oil & Gas and Insurance indices also closed northwards with 1.9% and 0.6% returns respectively.

Market breadth measured by ratio of advancers to decliners surged to 5.3x today (from 2.3x on Friday) as 48 stocks advanced against 9 declining stocks.  PZ, OKOMU and NAHCO led the advancers’ list with 10.2%, 10.2% and 10.1% in that order while CAVERTON (-5.0%), ETRANZACT (-4.8%) and CWG (-4.7%) declined the most. We believe today’s performance was primarily driven by bargain hunting and likely portfolio rebalancing by medium to long term investors. However, given the quantum of gains observed today, we re-iterate our advice that investors with low risk appetite should consider fixed income securities. Nonetheless, we believe equities still present an attractive opportunity to medium to long terms investors.

Source: Afrinvest (West Africa) Limited Research Team