Bargain purchase buoys performance at Stock market

In tandem with our outlook yesterday, bargain buying in GTCO (+2.4%), DANGSUGAR (+2.8%), and MTNN (+0.1%) bolstered performance today as the NGX All-Share Index rose 9bps to 42,357.36 points. Accordingly, YTD return improved to 5.2% (previously 5.1%) while market capitalisation grew ₦20.8bn to ₦22.1tn. Trading activity was mixed as volume traded fell 16.3% to 226.2m units while value traded rose 14.5% to ₦2.6bn. INTBREW (51.8m units), FBNH (32.5m units), and GTCO (18.0m units) led by volume while GTCO (₦457.2m), MTNN (₦405.0m), and FBNH (₦392.2m) led by value.

Performance across our coverage sectors varied as 3 indices lost while the remaining 3 indices gained. First on the laggards’ list, the Banking index shed 0.2% due to price decline in UBA (-1.9%) and UBN (-2.0%). In the same vein, the Industrial Goods and Oil & Gas indices declined 0.1% and 5bps respectively on the back of sell pressure on WAPCO (-1.6%), SEPLAT (-2bps), and ARDOVA (-0.7%). On the flipside, the Consumer Goods index gained the most, up 0.2% on price uptick in DANGSUGAR (+2.8%) and NIGERIAN BREWERIES (+1.1%). Similarly, the Insurance and AFR-ICT indices gained 8bps and 4bps sequentially, largely driven by bargain hunting in CHIPLC (+1.7%) and MTNN (+0.1%).

Investor sentiment, as measured by market breadth (advance/decline ratio), strengthened to 1.5x from 0.7x as 19 stocks gained while 13 stocks lost. REDSTAREX (+7.9%), MEYER (+7.7%), and JAPAULGOLD (+5.4%) led gainers while ETRANZACT (-9.6%), ROYALEX (-4.8%), and CUTIX (-4.2%) led decliners. In the next trading session, we expect that bargain hunting would continue to drive positive performance as investors carry out their year-end portfolio review.

Today, the National Bureau of Statistics (NBS) published the CPI November 2021 report, showing that the disinflation trend was sustained in the month as the headline inflation rate rose to 15.4% y/y, a 12-month low, against 16.0% in October 2021. On a m/m basis, the headline inflation rate rose to 1.1% from 1.0% in the previous month.  The deceleration in annual inflation – for the eighth straight month – was induced by a milder uptick in food prices (17.2% y/y in November 2021 vs. 18.3% y/y in October 2021) which, in our view, was supported by a high base from the prior year, and softer hikes in the price of farm produce amid the harvest season (0.9% m/m in November 2021 vs. 1.1% m/m in October 2021 and 2.4% m/m in November 2020).  On the other hand, core prices accelerated by 13.9% y/y – the steepest increase since April 2017. We attribute this spike to pressure on the Naira as well as the component items for the core index save Health, Transport, and Communication.

Market Statistics for Wednesday, 15th December 2021