Market Sustains Rally to Close at 37-Month High

The All Share Index (ASI) closed in the green for the 5th consecutive day, rising 1.4% to settle at 38,494.43 points – a level last seen in October 2014. Thus, YTD return of the benchmark index expanded to 43.2% while market capitalization rose by N181.0bn to close at N13.4bn. Although the rally was broad-based, the day’s positive close can be largely attributed to gains in bellwethers - DANGCEM (+1.7%), NIGERIAN BREWERIES (+3.4%) GUARANTY (+0.7%) and ZENITH (+0.6%). In the same vein, activity level improved as volume and value traded increased 4.4% and 18.3% to 522.4m units and N7.5bn respectively, Afrinvest reports.
 
Sector Performance Remains Mixed
Sector performance remained mixed despite the markedly positive market performance as 3 indices closed higher and the other 2 indices trended southwards. The Consumer Good index led the 3 gainers, up 1.7% following sustained buying interest in NIGERIAN BREWERIES (+3.4%), DANSUGAR (+2.7%) and UNILEVER (+3.1%). The other 2 gainers - Banking and Industrial Goods Indices – advanced 1.3% and 1.1% on the back of price appreciations in UBA (+4.0%), GUARANTY (+0.7%), ZENITH (+0.6%) and DANGCEM (+1.7%). On the flipside, the Insurance index was dragged 0.6% lower by losses in AIICO (-3.6%) and CONTINSURE (-5.0%), while the Oil & Gas index shed 0.4% due to profit-taking in FORTE (-3.9%).
 
Investor Sentiment Strengthens
Investor sentiment as measured by market breadth strengthened to 2.8x weakened (from 0.8x at previous close) with 31 stocks advancing versus 11 decliners. The outperforming stocks are LEARNAFRCA (+8.2%), CADBURY (+7.4%) and FCMB (+7.1%) while CONTINSURE (-5.0%), FORTE (-3.9%) and AIICO (-3.6%) are the worst performing stocks. While we maintain a positive near-term outlook for market due to year-end portfolio re-balancing by portfolio managers, we do not rule out profit-taking in tomorrow’s session by traders.

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