Market Upturns after 12 Consecutive Days of Losses

The rout on the equities market took a breather today as the broader index closed in the green for the first time in 2016. The benchmark index- All Share Index (ASI) - improved 3.9% to settle at 23,335.01pts. The positive close today was broadly driven by bargain hunting in bellwether stocks -- GUARANTY (+10.2%), ZENITH (+10.2%) and DANGCEM (+4.4%). Similarly, market capitalisation grew N302.2bn to N8.0tn. However, activity level waned today as volume and value traded contracted 5.4% and 19.9% to 242.5m units and N1.6bn respectively.

Oil & Gas Index, Lone Loser
The attractive prices in the market stirred investors' appetite for value stocks across sectors. The Banking index appreciated most (+8.1%) on account of bargain hunting in ZENITH (+10.2%) and GUARANTY (+10.2%). Similarly, price appreciation in DANGCEM (+4.4%) and NESTLE (+5.0) drove the Industrial and Consumer Goods indices northward - 4.0% and 2.9% respectively. Likewise, the Insurance index improved 0.5%. Conversely, the Oil & Gas index was the lone loser, depreciating 0.2% due to losses in SEPLAT (-5.0%).

Sentiments turn Positive
Investor sentiments turned positive today as market breadth surged 4.6x (37 stocks advanced and 8 declined). The top gainers today were FBNH (+10.2%), GUARANTY (+10.2%) and UACN (+10.2%) while HONYFLOUR (-9.4%), ASHAKACEM (-9.4%) and IKEJAHOTEL (-9.4%) led laggards. Despite the positive close of the market, we do not believe this will be sustained as macroeconomic fundamentals remain weak. Hence, we maintain that investors keep a long term investment horizon and trade cautiously in the short to medium term.