Equities Sustain Positive Run on DANGCEM Rally

The Nigerian bourse extended gains to the 4th trading session as the All Share Index (ASI) gained 1.1%today to close at 24,838.31points. Similarly, market capitalization appreciated N92.1bn to close at N8.5tn. Today’s market performance was broadly driven by appreciations in DANGCEM, ETI and PZ which all gained 5.0% apiece. Market activities however softened as volume and value traded shed 65.8% and 26.1% to close at 159.7m units and N1.1bn respectively.

Mixed Performance across Sectors
Before the close of market today, DANGCEM – the most capitalized stock on the Nigerian bourse – released its FY: 2015 result. This corporate release showed that the company’s topline improved 25.6% to N491.7bn from N391.6bn in FY:2014 while PAT also grew 13.7% Y-o-Y to N181.3bn. Although the result slightly underperformed analysts’ estimate, the Board’s decision to increase dividend payout to N8.00/share (from N6.00/share in FY: 2014) drove investors optimism towards the stock, as it rallied +5.0% and pushed the Industrial Goods index to a 1.2% gain. Also, the Banking index improved 1.1% on the back of price appreciations in ETI (+5.0%), UBA (+3.5%) and STANBIC (+2.5%). The Consumer Goods index gained a marginal 0.2% on rally in PZ (+5.0%). On the flip side, sell pressure in FORTE OIL (-9.8%) and CONOIL (-5.0%) dragged the Oil & Gas index to close weaker by 4.4% while the Insurance index declined 0.8%.

Sentiment Turns Positive
Sentiment turned positive today as market breadth (the advancers’/decliners’ ratio) closed at 1.3x on the back of 19 advancing stocks against 16 declining stocks. Top gainers today were TIGERBRANDS (+9.4%), OANDO (+5.7%) and DANGCEM (+5.0%) while FORTE OIL (-9.7%), CONOIL (-5.0%) and UNITY BANK (-4.5%) led the losers. We expect that market activities will continue to be influenced by earnings releases in the short term. We anticipate further bullish sentiment in stocks with rich historical dividend as investors’ position ahead of more corporate actions.