The Nigerian equities market reversed yesterday’s bearish performance as the All Share Index appreciated 0.5% to close at 25,885.31 points. Market capitalization in turn increased N46.8bn to close at N8.9tn lessening YTD loss to 9.6%. Today’s positive performance was on account of bargain hunting in DANGCEM (+0.5%) and ZENITH (+1.7%) – both Industrial Goods and Banking bellwethers respectively. However, activity level waned as volume and value traded dipped 0.1% and 4bps to close at 215.0m units and N1.4bn respectively.
Upbeat Momentum across Sectors
The Oil & Gas and Banking indices closed 0.7% higher apiece, topping sector gainers due to rally in OANDO (+10.2%), ZENITH (+1.7%) and GUARANTY (+0.5%). The Consumer Goods Index trailed closely, up 0.6% amid bargain hunting in NIGERIAN BREWERIES (+1.0%). Similarly gains in WAPCO (+0.6%) and DANGCEM (+0.5%) drove the Industrial Goods index (+0.4%) northwards. The Insurance index rose 0.2% on account of price appreciation in NEM (+4.1%).
Market Breadth Strengthens to 2.2x
Positive sentiments in the market persisted as market breadth - measured by the advancers/decliners ratio - improved to 2.2x (against 2.0x yesterday). A total of 26 stocks advanced against 12 declining stocks. OANDO (+10.2%), TIGERBRAND (+9.7%) and FCMB (+7.9%) led the gainers while BETAGLASS (-5.0%), MAYBAKER (-5.0%) and NIG-GERMAN (-4.9%) topped the losers’ chart. We are of the view that the market may sustain recent uptrend for the week, however, we do not rule out profit taking as seen yesterday. In the short-term, we maintain our stance that investors buy into companies with consistent dividend payment history ahead of their earnings releases.