Rally in Consumer Goods Bellwethers Buoy Market Index

The Nigerian bourse continues winning run on Tuesday as investors positioned ahead of the MPC rates decisions today. Benchmark index sustained gains to the fourth consecutive trading day notwithstanding persisting negative sentiments. Consequently, the All Share Index improved 0.5% to close at 26,020.40 points. Bullish sentiment in NB (+5.0%) and GUINNESS (+3.7%) and NESTLE (+3.2%) mainly pulled the market north as market capitalization expanded N71.6bn to N8.9tn. However, level of market activity was mixed as volume traded declined 16.7% while value traded advanced 18.8% to 343.5m units and N2.5bn respectively.

Consumer Goods Index Lone Gainer
Performance across sectors was broadly bearish as all sector indices save for the Consumer Goods index, trended south. The Oil & Gas index plunged the most, shedding 1.6%, following profit-taking in SEPLAT (-6.1%) while the Banking index trailed closely, down 1.0% against the backdrop of losses in ACCESS (-1.3%), GUARANTY (-0.5%) and ETI (-0.5%). Relatedly, investors sold off in WEMABANK (-5.0%) as its FY:2015 result which was released yesterday showed a 1.9% decline in PAT (to N2.3bn) despite 8.7% growth in gross earnings to N45.9bn. Similarly the Insurance index waned 0.8% following profit taking in MANSARD (-4.7%) and NEM (-1.3%). On the flipside, the Consumer Goods index appreciated 3.0% majorly due to bargain hunting in NB (+5.0%) and GUINNESS (+3.7%) and NESTLE (+3.2%). The Industrial Goods index closed flat.

Negative Sentiments Persist
Sentiments in the market remained weak as seen in the market breadth (advancers/decliners ratio) which settled at 0.6x (0.7x for prior day) as 14 stocks advanced against 24 declining stocks. The gainers list was topped by UCAP (+9.7%) NB (+5.0%), UNILEVER (+5.0%) and while SEPLAT (-6.1%), NAHCO (-5.0%) and WEMABANK (-5.0%) led the list of laggards. Sentiment in the Nigeria Bourse is mainly insulated from the MPC’s interest rate decisions but we expect to see some tractions in Tier-1 banking tickers following the CBN’s tightening moves. Market performance will remain broadly driven by earnings releases in the interim.