Equity Market Sustains Positive Momentum

At the close of trade on Monday, the All Share Index (ASI) gained 3.9% (highest daily gain since January 2016) to sustain positive momentum into the 9th consecutive session as investors continued to show interest in large- and mid-cap stocks such as DANGCEM (+8.9%), NESTLE (+3.9%), FBNH (+10.1%), ACCESS (+5.8%) and MOBIL (+10.3%). Today’s bullish close brought the ASI to a 23-month high of 32,578.38 points, whilst YTD return further advanced to +21.2%. Accordingly, investors gained N417.2bn as market capitalization settled at N11.3tn. However, activity in the market waned as volume and value traded dipped 9.6% and 7.0% to 640.4m units and N7.7bn respectively.

All Indices Closed in the Green
Performance across sectors was bullish as all indices under our coverage closed in the green. The Industrial Goods index (+6.5%) appreciated on account of gains in DANGCEM (+8.9%) and WAPCO (+4.3%). The Oil &Gas Index followed, up 3.3% on the back of investor reaction to SEC approval of a takeover bid of MOBIL (+10.3%) by NIPCO as well as bargain hunting in OANDO (+2.9%) which declined in previous trading session. Likewise, the Banking and Insurance indices  added 1.8% and 1.1% respectively as a result of positive sentiment towards ACCESS (+5.8%), ETI (+5.0%), CUSTODYINS (+9.7%)  and MANSARD (+4.6%). Similarly, the Consumer Goods index improved 0.2% due to strong appetite for NESTLE (+3.9%) and FLOURMILL (+10.2%).

No Stopping the Rally… Sentiment Wanes But Still In the Positive Region
Investor sentiment measured by market breadth (advancers/decliners ratio) dropped today to 3.7x (from 6.4x in the previous Friday) as 44 stocks advanced against 12 which declined. The best performing stocks today were MOBIL (+10.2%), CONOIL (+10.2%) and FLOURMILL (+10.2%) while UNIONDICON (-4.9%), CILEASING (-4.5%) and CUTIX (-4.3%) led laggards. We maintain our stance on the upbeat market performance being buoyed by developments in FX market and macroeconomic fundamentals.  We expect to see a sustained positive momentum going forward as foreign and domestic money managers continue to rotate to value equities still trading below pre-crisis valuation multiples.

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