Weekly Equity Market Review and Outlook

Sentiment on the Nigerian Bourse this week was broadly positive as the All Share Index gained on 3 of 4 sessions to close at 36,320.98 points, indicating a 2.5% gain W-o-W and a YTD return of 35.1%. In turn, market capitalization increased by N285.3bn to settle at N12.5tn. The week started off on a negative note, closing 0.4% lower on Tuesday as investors took profit in stocks that had gained in prior week. However, sentiment turned positive in subsequent sessions as the benchmark index closed higher on Wednesday (+0.2%), Thursday (+1.2%) and Friday (+1.5%) - largely attributed to gains in ZENITH (+6.9%), WAPCO (+13.1%) and UBA (+9.3%). Also, activity level improved as average volume and value traded expanded 40.7% and 34.1% to 373.2m units and N3.8bn respectively.

In the same vein, sector performance was largely positive with the Industrial Goods index leading gainers, up 6.2% W-o-W following gains in WAPCO (+13.1%) and DANGCEM (+2.2%). The Banking index trailed, returning 3.2% W-o-W on the back of buying interest in ZENITH (+6.9%) and UBA (+9.3%). Likewise, the Oil & Gas index (+1.8%) closed the week in the green, as SEPLAT (+5.0%) and TOTAL (+4.3) recorded gains while the Consumer Goods index (+1.4%) was bolstered by appreciations in NIGERIAN BREWERIES (+3.0%) and GUINNESS (+3.7%). The Insurance index was the lone loser, down 1.2% W-o-W, on account of losses in CONTINSURE (-12.0%) and LAWUNION (-4.3%).

Investor sentiment as measured by market breadth was positive this week, improving on last week’s 1.1x to close at 1.6x on account of 34 stocks gaining against 23 stocks declining. This week’s top gainers were CILEASING (+19.6%), CAVERTON (+18.3%) and PRESCO (+15.3%) contrary to the top losers led by CONTINSURE (-12.0%), PZ (-9.4%) and UNITYBNK (-8.3%). In the coming week, we expect market performance to maintain its positive momentum, buoyed by anticipated release of Q3:2017 earnings results.