Domestic equities market rebounds as bargain hunting lifts ASI by 0.7%

Bargain hunting in banking stocks propelled a rebound in today’s session as the domestic equity market closed bullish. Bargain hunting in GUARANTY (+3.8%), UBA (+6.7%) and ZENITHBANK (+1.7%) drove the All Share Index (“ASI”) higher by 0.7 per cent to settle at 31,007.25 points while YTD loss moderated to -18.9 per cent. Investors’ wealth improved as market capitalisation rose by N76.1 billion to close at N11.3 trillion. Activity level weakened as volume and value traded declined by 20.5 per cent and 22.2 per cent respectively to close at 198.5 million units and N2.1 billion respectively. The top traded stocks by volume in today’s session were FBNH (63.9m units), ACCESS (23.2m units) and ETI (16.5m units) while the top traded stocks by value were FBNH (N479.3m), GUARANTY (N407.3m), and ETI (N263.6m).

Sector performance in today’s session was mixed as 2 of the 5 sectors under our coverage closed in the red while 1 closed flat. Buying interest in banking stocks in today’s session drove the Banking index higher by 2.6 per cent as price upticks in GUARANTY (+3.8%) and UBA (+6.7%) pushed the index higher. The insurance index trailed as bargain hunting in MANSARD (+9.9%) erased sustained profit taking in CONTINSURE (-2.8%) pulling the index higher by 0.7 per cent. The Industrial Goods index and Consumer Goods index closed southwards for the second consecutive session as sell pressures in WAPCO (-4.5%), NIGERIAN BREWERIES (-0.5%) and UNILEVER (-1.0%) pushed the indices lower by 0.9 per cent and 0.1 per cent respectively. The Oil & Gas index closed flat as no component of the index changed in price.

Investor sentiment as measured by market breadth (advance/decline ratio) strengthened to 1.8x from 1.6x recorded in Monday’s session as 24 stocks advanced against 13 decliners. The best performing stocks in today’s session were MANSARD (+9.9%), DIAMONDBNK (+9.9%) and UPL (+7.5%) while LINKASSURE (-9.7%), VERITASKAP (-9.1%) and MAYBAKER (-8.0%) led the laggards in today’s session. In line with our expectation, the local bourse rebounded in today’s session while significant headroom remains for increased buying activities, thus we anticipate a bullish performance in subsequent sessions while we maintain our bearish outlook over the near term.