Equities Open the Week Bullish

Afrinvest Research reports that the Nigerian Equity Market opened the week on a bullish note as investors' sentiment on the bourse stayed positive.

The benchmark equity index - All Share Index (ASI) -- appreciated 1.8% to close at 30,052.29 points, further paring YTD losses to -13.3%. Similarly, Market Capitalization rose N181.6bn to close at N10.3tn. The rally in the market today was broadly driven by bargain hunting in DANGOTE CEMENT (+2.9%) and sustained rally across a broad spectrum of banking counters led by bellwethers - UBA (+10.2%), ETI (+4.3%), ZENITH (+3.4%) and GTBANK (+2.3%). However, activity level softened as aggregate volume and value of stocks traded on the bourse declined 22.6% and 34.5% to close at 214.8m units and N1.8bn respectively.

Banking Index Sustained Lead
Against the backdrop of the strong sentiment in the market, all sector indices closed positive. The Banking Index sustained its lead as the best performing index for the third consecutive trading session, as the index rose 3.2% today on the back of sustained rally in the sector bellwethers -- ZENITH (+3.4%), GTBANK (+2.3%) and UBA (+10.2%). The Insurance index trailed with a daily gain of 1.6%, buoyed by price appreciation in MANSARD (+5.0%) and CUSTODYINS (+4.8%); whilst the Industrial Index recouped 1.4% after the selloff witnessed last week, majorly against the backdrop of bargain hunting in DANGOTE CEMENT (+2.9%). Similarly, the Consumer Goods and Oil & Gas index gained 0.3% and 0.2% respectively.

Market Breadth Positive
Sentiment in the equities market, measured by Market Breadth stayed positive at 2.3x (34 Advancers' vs. 15 Decliners'). Top gainers in the market today were UBA (+10.2%), UBCAP (+9.1%), FBNH (+6.0%), FLOURMILL (+5.0%) and MANSARD (+5.0%); whilst top laggards were CAVERTON (-9.5%), HONYFLOUR (-5.0%) and ETERNA (-5.0%). The strong sentiment in the market may suggest investors are already positioning ahead of expected clarity in the economy this month, as this is anticipated to boost investment confidence. Consequently, equites have already pulled back 4.3% in gains in September. However, we expect some moderation in gains in the trading sessions ahead as investors with short holding period take profit.