Nigerian Bourse Bucks 2-day Rally on Sell Pressure

The Nigerian Bourse halted a 2-day rally today, as the benchmark index dipped 0.8% to close at 25,620.94 points, while YTD loss worsened to 4.7%. Similarly, market capitalization trimmed N68.5bn to settle at N8.9tn. The negative performance was majorly due to profit-taking in DANGCEM (-3.6%) which offset the broad rally across large and mid-cap stocks including STANBIC (+5.0%), GUARANTY (+0.6%) and OANDO (+6.1%). Ex-DANGCEM, the All Share index would have advanced 0.6%. However, activity level strengthened as volume and value traded rose 100.7% and 83.5% to 255.7m units and N1.7bn respectively.

Industrial Goods Index, Lone Decliner
Performance across sectors was broadly positive as all sector indices closed in the green, save for the Industrial Goods index which closed 1.6% lower on the back of losses in DANGCEM (-3.6%). The Oil & Gas index appreciated the most, up 1.2% following gains in OANDO (+6.1%) and SEPLAT (+1.2%). The Banking index followed, with an appreciation of 0.6% on account of sustained interest in STANBIC (+5.0%) and GUARANTY (+0.6%). Relatedly, GUARANTY released its Q1:2017 result today; Gross Earnings expanded 38.8% to N104.7bn while PAT rose 61.9% to N41.5bn in the period. Similarly, the Insurance and Consumer Goods indices trended 0.4% and 0.2% northward following price appreciation in NEM (+4.8%) and NIGERIAN BREWERIES (+0.1%) respectively.

Investor Sentiment Bullish as Market Breadth Improves
Despite the negative close, investor sentiment further strengthened today as market breadth improved from 1.9x yesterday to 2.4x – 24 stocks advanced while 10 declined. The gainers list was led by OANDO (+6.1%), STANBIC (+5.0%) and NEM (+4.8%), while DIAMOND (-8.8%), TRANSCORP (-6.5%) and PRESCO (-3.6%) declined the most. The influx of largely positive earnings scorecards has continued to strengthen investor sentiment in equities and we expect market performance to continue to be determined by the earnings releases. Overall, we are very positive on earnings for Q1, due to subtle improvement in macroeconomic fundamentals in the Quarter and different survival strategies adopted by companies.

NASD OTC Exchange Market Activities
In the NASD OTC exchange, total volume and value traded fell 81.8% and 83.9% to 12,312 units and N1.4m respectively. Only WAMCO and CSCS  PLC traded today.

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