The Nigerian Equities Market bucked its losing trend today as the All Share Index (ASI) rose marginally by 12bps to close at 29,014.78 whilst market capitalization also added N11.6bn to N10.0bn.
The index was buoyed majorly by the rally in some bellwether counters -- NIGERIAN BREWERIES (+2.7%), FORTE OIL (+2.1%) and ZENITH (+1.2%) - as we still observed significant selling pressure with more equities losers than gainers. Market activity however weakened as aggregate volume and value traded fell 31.5% and 19.3% to 217.3m units and N1.5bn.
Insurance Sector Index Sustains Bullish Run
The Insurance index rose 0.9% to sustain gaining streak into the 5th trading session due to the gains in MANSARD (+5.0%), whilst the Consumer Goods index rebounded from two days of losses to recoup 0.7% against the backdrop of bargain hunting in NIGERIAN BREWERIES (+2.7%) which offset losses in NESTLE (-0.7%) and GUINNESS (-0.5%).
The Banking index also rebounded, adding 0.6% - boosted by ZENITH (+1.2%), ACCESS (+4.0%) and UBA (+3.0%). Selling pressure entered second session in the Oil & Gas index due to sustained profit-taking in OANDO (-9.7%) whilst the Industrial Goods index declined a marginal 9bp.
Market Breadth Wanes
Market breadth, a measure of sentiment which is ratio of advancers/decliners waned to 0.5x as 12 stocks closed positive against 25 losers. Top gainers in the market include: MANSARD (+5.0%), DANGFLOUR (+4.8%) and FLOURMILL (+4.5%) while OANDO (-9.7%), TRANSCORP (-8.9%) and CCNN (-8.2%) led the losers' chart.
With the swearing-in of cabinet ministers today as well as announcement of their portfolios, investors will be looking out for fiscal policy direction of the Government from the new Ministers of Finance; Industry, Trade & Investments and Budget & National Planning.
We (analysts at Afrinvest) are moderately bullish on the individuals nominated for the three portfolios as well as the former governor of Lagos State (Mr. Fashola) as minister of Power, Works and Housing, although we do not expect a marked improvement in investors' sentiment for equities until the fiscal direction of the administration is rolled-out and more clarity is brought into management of FX. Nevertheless, we believe the sell-off on Nigerian equities is already overdone seeing the current valuation as an attractive entry point for medium to long term investors.