Nigerian Equity Markets | 21 Mar 2016: Positive Streak Extends to 3rd Consecutive Day…NSE ASI up 81bps

LAGOS, Nigeria, Capital Markets in Africa –— The Nigerian Equities market started the week on a positive note, extending the streak of gains in the benchmark index to the third consecutive trading day. Despite the general negative sentiments, investors still see value in some Bellwethers trading at attractive entry prices. Consequently, the All Share Index improved 0.8% to close at 25,902.95 points. Bargain hunting in GUARANTY (+4.5%), ZENITH (+3.1%) and DANGCEM (+1.8%) lifted the market into the green as market capitalization rose N71.6bn to N8.9tn. Activity level in the market also strengthened as volume and value traded advanced 85.6% and 9.3% to 412.5m units and N2.1bn respectively.

Industrial Goods Leads Sector Gainers
Performance across sectors was mixed as all sector indices save for the Consumer and Industrial Goods indices, trended northwards. The Banking index advanced the most, gaining 2.0%, following rallies in GUARANTY (+4.5%) and ZENITH (+3.1%). Relatedly, one of the Tier-2 players in the Banking space, Sterling Bank, released its FY:2015 result today; Top line grew 6.3% to N110.2bn while PAT advanced 14.3% to N10.3bn. Similarly, the Industrial Goods index rose 1.8% against the backdrop of price appreciation in WAPCO (+2.0%) and DANGCEM (+1.8%) while the Insurance index improved 0.3%. On the flipside, the Consumer Goods index depreciated 0.8% majorly due to profit taking in NIGERIAN BREWERIES (-1.0%) and sell pressure in PZ (-5.0%). Losses in MOBIL (-5.0%) pulled the Oil & Gas index into the red, down 0.6%.

Positive Sentiments Persist
As earlier noted, sentiments in the market remain weak as seen in the market breadth (advancers/decliners ratio) which settled at 0.7x from 15 stocks that advanced against 22 stocks that declined. The gainers list was topped by UCAP (+9.4%) FIDELITY (+6.7%), GUARANTY (+4.5) and while NASCON (-5.0%), MOBIL (-5.0%) and PZ (-5.0%) led the list of laggards. As more corporate releases trickle in, we believe market performance will be driven by investors’ reactions to the results even as we expect to see buying interest in companies that have declared dividend in the current earnings season. Also, we believe deliberations from the ongoing MPC meeting (21^st -22^nd March, 2016) will shape the mood in the market.