Bargain Hunting Lifts Market as Sentiment Improves

Equities sustained the largely flattish performance observed in recent trading sessions as the All Share Index (ASI) rebounded a marginal 9bps at the close of trade on Wednesday, bringing the index to settle at 26,240.45 points and YTD return stagnant at -2.4% for the fourth session. Market capitalization added N7.8bn to close at N9.0tn on account of bargain hunting in ETI (+1.1%), WAPCO (+1.0%), FORTE (+1.9%), UBN (+1.7%) and OANDO (+2.4%). However, market activity remained mixed as volume traded rose 1.2% to 190.0m units and value traded dropped 76.7% to N2.4bn with PRESCO accounting for nearly 50.0% of value traded.

Banking Index Closes Flat
All sector indices closed in the green, save for the Banking index which was flat as sustained profit taking in ZENITH (-0.3%) offset gains in ETI (+1.1%) and UBN (+1.7%). Similar to the previous trading session, the Oil & Gas index topped sector gainers, up 0.7% on account of renewed interest in FORTE (+1.9%) and OANDO (+2.4%). The Industrial Goods index followed, rising 0.4% consequent on gains in WAPCO (+1.0%). Similarly, the Insurance index added 0.1% due to a rally in CUSTODYINS (+3.3%) while DANGSUGAR (+1.3%) and NESTLE (+0.1%) drove the Consumer Goods index 4bps higher.

Investor Sentiment in the Positive Region
Investor sentiment improved today as market breadth closed at 1.3x (from 0.5x on Tuesday) on the back of 21 advancing stocks against 16 decliners. The best performing stocks today were NASCON (+5.0%), NEIMETH (+4.7%) and CUSTODYINS (+3.3%) while HONYFLOUR (-5.0%), LIVESTOCK (-4.9%) and AGLEVENT (-4.7%) led laggards. We note that the positive close today was broadly driven by Oil & Gas and Industrial Goods equities which had been beaten in prior trading sessions. We maintain that investors trade cautiously as sentiment remains driven by macroeconomic uncertainties.