Market Rebounds as Blue-Chip Stocks Rally

Photo L-R: Sola Oyetayo, Vice President, Lagos Chamber of Commerce & Industry (LCCI); Michael Olawale Cole, Vice President, LCCI; Oscar Onyema, Chief Executive Officer Nigerian Stock Exchange; Nike Akande, President, LCCI; Babatunde Runwase, Deputy President LCCI at the Closing Gong ceremony of the Exchange.

The Nigerian bourse closed the first trading day of the week positive, as the All Share Index (ASI) appreciated 2.0% to settle at 23,977.10pts. The positive close was driven by gains recorded in DANGCEM (+7.8%), GUARANTY (+1.6%) and UNILEVER (+4.9%). Market capitalization rose N163.4bn to close at N8.2tn.  Activity level measured by volume and value of shares traded dipped 44.8% and 16.0% to close 190.4m and N1.7bn respectively.

Industrial Goods Sector; Top Indices Performances
Today’s performance across sectors was mixed as the Industrial Goods and Banking Sector indices were the only gaining sectors. The rally in DANGCEM (+7.8%) buoyed the Industrial Goods index 3.8% into the green. Similarly, price appreciation in GUARANTY (+1.6%) drove the 0.1% close in the Banking index. On the flip side, the Insurance index declined the most, losing 0.4% on the back of losses in CUSTODYINS (-1.5%) and NEM (-4.2%). The Oil & Gas and Consumer Goods indices marginally fell 3bps and 1bp respectively on account of sell pressures in CONOIL (-9.4%) and GUINNESS (-2.3%) respectively.

Market Sentiments Turn Positive
Sentiments in the market turned positive today; market breadth – advancers’/decliners’ ratio - improved to 1.4x (from 0.7x on the previous trading session) as 22 stocks advanced while 16 declined. Top gaining stocks were DANGCEM (+7.8%), UNILEVER (+4.9%) and PZ (-4.8%) while CONOIL (-9.4%), PHARMDEK (-4.9%) and TIGERBRANDS (-4.8%) were the biggest losers. Our overall short to medium term outlook for the market is neutral, as prices seem to have corrected for anticipated weaker FY: 2015 earnings while macroeconomic concerns and FX uncertainties will continue to limit upsides. Investors with short holding period and greater risk appetite could take advantage of volatile price movements within the market and key in to value stocks currently trading at attractive entry prices.