Positive Momentum Sustained Amidst Rally in Bellwethers

The Nigeria Bourse extended gains to the sixth session today as the Benchmark Index advanced 0.8% to close at 33,246.91 points, buoying YTD gain to 23.7%. Today’s performance was bolstered by sustained buying interest in bellwethers across sectors including DANGCEM (+0.8%), GUARANTY (+1.9%), WAPCO (+4.0%) and MOBIL (+9.5%) which more than offset losses in NIGERIAN BREWERIES (-0.9%) and ACCESS (-1.5%) Thus, investors accumulated N91.4bn in value as market capitalization increased to N11.5tn. Also, activity level improved as volume and value traded rose 60.2% and 48.0 to 288.9m units and N3.8bn respectively.

Consumer Goods Index Emerges Lone Loser
Performance across sectors was largely positive as all indices advanced save for the Consumer Goods index which slid by a marginal 1bps due to selloffs in NIGERIAN BREWERIES (-0.9%) and CHAMPION (-7.0%). The Oil & Gas index led sector gainers, up 2.8% on the back of upticks in MOBIL (+9.5%) and FORTE (+7.0%) while the Industrial Goods index trailed closely with a gain of 2.0% on account of appreciation in DANGCEM (+0.8%) and WAPCO (+4.0%). Similarly, the Banking and Insurance Goods indices trended 0.8% and 0.2% northward  as a result of positive sentiment towards GUARANTY (+1.9%) and CUSTODYINS (+5.0%) respectively.

Market breadth Softens
Market breadth – a measure of investor sentiment – declined to 1.8x (from 1.9x recorded yesterday) as 33 stocks advanced while 18 stocks declined. At the top of the gainers’ chart were MOBIL (+9.5%), FORTE (+7.0%) and CUSTODYINS (+5.0%) while CHAMPION (-7.0%), FIRSTALUM (-5.0%) and NCR (-4.9%) topped the losers’ chart. As H1:2017 earnings scorecards begin to trickle in, we expect performance in the equities market to remain upbeat as investors take positions in stocks with positive forward earnings expectation. Nevertheless, we do not eliminate the possibility of some “end of the week” profit taking in tomorrow’s trading session following the positive streak.