All Share Index Records Highest Weekly Gain in 20 Months

Against the backdrop of rising oil prices and strong portfolio flows, the uptrend in market performance from the prior week was sustained this week as the All Share Index (ASI) closed in the green on all trading sessions save for Friday. Thus, the ASI gained 10.2% W-o-W to settle at 42,898.90 points while YTD return expanded to 12.2%. Consequently, investors gained a total of N1.5tn in value as market capitalization closed at N15.4tn. In the same vein, activity level strengthened as average volume and value traded rose 66.2% and 193.3% W-o-W to 1.0bn units and N13.8bn respectively. The top traded stocks by volume were TRANSCORP (648.6m), DIAMOND (588.7m) and ACCESS (273.5m) while NIGERIAN BREWERIES (N17.6bn), ZENITH (N8.3bn) and DANGCEM (N4.9bn) were the top traded stocks by value.

The week started off on a positive note, with the ASI advancing 2.4%, buoyed by a broad-based rally across sectors though market bellwethers- DANGCEM (+5.0%), GUARANTY (+2.3%) and ZENITH (+2.5%) drove performance. The positive momentum was sustained till Thursday as market capitalization reached an all time high of N15.3tn while the ASI rose to a 10-year high of 43,041 points. The bullish run was halted on Friday as profit taking by investors dragged the ASI 0.3% southwards.

In line with the bullish performance, sector performance was broadly positive as all indices advanced W-o-W. The Industrial Goods index led the gainers chart, up 13.0% W-o-W consequent on price appreciation in WAPCO (+13.8%) and DANGCEM (+12.9). The Banking and Oil & Gas indices followed, adding 12.9% and 7.5% W-o-W as GUARANTY (+14.0%), ZENITH (+12.0%), CONOIL (+34.0), and SEPLAT (+3.8%) recorded sustained buying interest. Similarly, the Insurance and Consumer Goods indices closed 6.5% and 5.6% northwards on the back of a rally in LINKASSURE (+15.4), MANSARD (+14.2%), NIGERIAN BREWERIES (+9.4%) and GUINNESS (+14.0%).

Investor sentiment as measured by market breadth (advance/decline ratio) significantly improved to 9.0x from 5.4x recorded the previous Friday as 63 stocks advanced against 7 decliners. The top performers this week were HONYFLOUR (+39.7%), SKYE (+37.7%), and CHAMPION (+36.6%) while MEYER (-12.9%), GLAXOSMITH (-2.7%) and DANGSUGAR (-2.7%) were the worst performers. As the benchmark index halted a 6-day bullish streak today, we envisage some profit taking in early trades next week. Nevertheless, we maintain our near term positive outlook on market performance.

In the NASD OTC Securities Exchange, total volume traded today was 29,329 units while total value traded was N3.1m. The SDNDEP was the top traded security by volume and value.

Stocks Climb to 9-Year High

In the meantime, Nigerian stocks climbed to a nine-year high on Friday before edging down as some investors chose to lock in their profits.

The equity market gained more than 1 percent during the day, but was down 0.33 percent at the close, below 43,000 points.

Stocks have gained strongly in January, extending 2017’s 43 percent rise. The rally has taken the index up 12.55 percent since the start of the year.

Some see Friday’s late fall as temporary.

“I expect the market to remain net positive from now till March when earnings seasons begin as investors position for dividend yield and capital appreciation,” said an Africa equity sales analyst told Reuters.

Twenty-nine companies were up at the close of trade, down from 46 that were ahead mid-session, as investor sentiment waned.

Banks led the decline. The index of Nigeria’s top 10 lenders shed 2.23 percent.

Flour Mills of Nigeria, which plans to start marketing from Jan. 15 to raise 39.86 billion naira in fresh equity, fell 5 percent, while Zenith Bank declined the most, sliding 5.3 percent.