Bears maintain grip over equities… ASI Down 59bps

The local bourse sustained yesterday’s loss as the All-Share Index declined 59bps to 29,378.63 points due to price depreciation in GUARANTY (-3.4%), STANBIC (-2.4%) and ZENITH (-1.4%). Consequently, YTD return further eased to 9.4% while market capitalisation fell ₦89.8bn to ₦15.1tn. Activity level was mixed as volume traded declined 43.5% to 250.9m units while value traded rose 44.2% to ₦4.8bn. The most active stocks by volume were STANBIC (43.0m units), ZENITH (34.3m units) and UBA (18.6m units) while STANBIC (₦1.8bn), ZENITH (₦724.1m) and ACCESS (₦467.9m) led by value.  

Performance across sectors was bearish as 4 of 6 indices under our coverage lost. The Insurance index (+1.5%) was the lone gainer, buoyed by buying interest in LINKASSURE (+9.6%) and  NEM (+9.1%). Conversely, losses in GUARANTY (-3.4%), ZENITH (-1.4%) and TOTAL (-8.6%) weighed on the Banking (-2.2%) and Oil & Gas (-1.4%) indices. Equally, the Industrial (-0.6%) and Consumer Goods (-0.3%) indices declined due to sell pressures in FLOURMILL (-5.8%), BUACEMENT (-0.5%) and WAPCO (-2.3%). Lastly, the AFR-ICT indices which closed flat.

Investor sentiment as measured by market breadth (advance/decline ratio) weakened to 0.4x from the 1.1x recorded in the previous trading session as 9 stocks advanced relative to 23 decliners. The best performers were JBERGER (+9.9%), NAHCO (+9.7%) and LINKASSURE (+9.6%) while ABCTRANS (-9.8%), GLAXOSMITH (-9.2%) and ETERNA (-8.8%) led the laggards. Despite weak investor sentiment, we maintain our bullish outlook for the equities market in the near term.

UNION BANK PLC today announced a planned divestment (100.0%) of its equity stake in Union Bank UK Plc (“UBUK”) so as to focus on growth opportunities in Nigeria. Following a competitive bid process, MBU BidCo Limited (“MBU”), an acquisition vehicle wholly owned by MBU Capital Limited (“MBU Capital”), was selected as the preferred bidder. However, the completion of the sale is subject to regulatory approvals from the relevant regulatory authorities in Nigeria and the United Kingdom.

UBA PLC and ZENITH BANK PLC announced the Board’s approval of their full year 2019 audited financial statements and payment of dividend to shareholders. Further details of the results and dividend to be provided upon the approval of financial accounts by the CBN.

Highlights of Corporate Earnings Disclosures Announced Today:

AIRTEL AFRICA PLC (Unaudited 9M:2019): Revenue rose 9.9% Y-o-Y to US$2,522.0m while profit after tax (PAT) fell 2.2% Y-o-Y to US$331.0m.

ABBEY MORTGAGE BANK PLC (Unaudited FY:2019): Revenue down 0.6% Y-o-Y to ₦1.4bn; PAT recovered from 2018 losses, up 101.0% Y-o-Y to ₦6.0m.

EKOCORP PLC (Unaudited FY:2019): Revenue down 15.1% Y-o-Y to ₦302.1m while loss after tax moderated 59.6% Y-o-Y to -₦42.9m.

REDSTAR EXPRESS PLC (Unaudited FY:2019): Revenue up 3.7% Y-o-Y to ₦7.8bn; PAT up 4.0% Y-o-Y to ₦377.5m.

STACO INSURANCE PLC (Audited FY:2017): Gross Premium Written down 6.5% Y-o-Y to ₦5.8bn; loss after tax worsened by 22.7% Y-o-Y to -₦1.5m.

CHELLARAMS PLC (Unaudited 9M:2019): Revenue down 32.7% Y-o-Y to ₦5.7m; loss after tax increased  3.6% Y-o-Y to -₦2.5bn.

Market Statistics for Tuesday, 28th January 2020 

Source: Afrinvest