Market Opens Week flat despite Positive Sentiments

The Local Bourse trended southwards at the close of Monday’s trading session as the All Share Index marginally declined 2bps to settle at 36,930.83 points while YTD return moderated to 37.4%. Today’s negative performance was primarily dragged by losses in ZENITH (-1.0%), UBA (-2.0%), INTBREW (-3.5%) and TOTAL (-4.7%). Similarly, market capitalisation shed N3.0bn to settle at N12.8tn. Activity level was mixed as volume improved 29.2% to settle at 466.5m units while value traded declined 21.2% to close at N2.9tn.
 
Bearish Sector Performance… Banking Index Emerges the lone Gainer
Performance across sectors was largely bearish as 3 of 5 sectoral indices closed in the red, one closed in the green and the other flat. The Banking index emerged the lone gainer owing to price appreciation in GUARANTY (+1.3%). The negative performers were led by the Insurance index which shed 0.8% on account of sell-offs in MANSARD (-3.2%) and NEM (-3.7%). The Oil & Gas index trailed, down 0.7% due to a downtick in TOTAL (-4.7%) while profit taking in INTBREW (-3.5%) also dragged the Consumer Goods index 0.2% lower day on day.
 
Investor Sentiment Stays Positive
Despite the market’s weak performance, investor sentiment as measured by market breadth (advancers/decliners’ ratio) improved to 1.2x from 1.1x recorded on Friday as 23 stocks advanced against 19 decliners. The best performing stocks were DIAMOND (+9.4%), UCAP (+7.0%) and FIDELITY (+5.0%) while the worst performers were CHAMPION (-4.9%), TOTAL (-4.7%) and AIRSERVICE (-4.4%).  Given the continued rally in global oil prices and subsequent improved buying interest in Nigerian assets, we (Afrinvest) expect investor sentiment to remain positive in the near term although we do not rule out possibility of profit taking in some low cap stocks that have recently attracted positive investor sentiment.

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