Domestic Equities Market extends Bearish run… ASI down 40bps W-o-W

The equities market closed in the red this week despite a 125bps gain on Friday. The NSE All-Share Index lost points on 2 of the 3 trading sessions in the week, declining 0.4% W-o-W to settle at 26,416.48 points. Similarly, YTD return declined to 16.0% and market capitalisation fell by N51.3bn W-o-W to close at N12.6tn. Trading activity waned as average volume and value traded declined by 11.2% and 23.3% W-o-W to 245.2m units and N2.4bn respectively. The top traded stocks by volume were ACCESS (149.6m units), LAWUNION (146.3m units) and UBA (95.2m units) while GUARANTY (N2.2bn), ACCESS (N1.5bn) and ZENITH (N1.1bn) topped trades by value.

Performance across sectors was mixed as half of the sector indices under our coverage trended northward W-o-W, while the other half lost. The Consumer Goods index gained the most, up 4.8% W-o-W due to price appreciation in and NESTLE (+10.0%) and UNILEVER (+8.9%). The Insurance and Oil & Gas indices followed suit, climbing 1.4% and 0.7% higher respectively W-o-W on the back of buy interest in NEM (-10.0%) and LINKASSURE (+8.2) as well as OANDO (+6.8%) and JAPAULOIL (+5.0%). On the other hand, the AFR-ICT index led losers, down 3.7% as MTNN (-6.7%) recorded a loss on Monday. Finally, sell pressures in WEMABANK (-8.6%), FCMB (-5.3%) and CCNN (-2.9%) drove the Banking and Industrial indices 0.3% downward apiece.

Investor sentiment strengthened this week, as market breadth (advance/decline ratio) improved to 1.9x from 1.4x in the previous week, as 31 stocks advanced against the 16 that declined. The top performers for the week were UPDC (+26.5%), NAHCO (+13.2%) and AGLEVENT (+10.0%) while MAYBAKER (-9.8%), CORNERSTONE (-9.5%) and TRANSCOH (-9.3%) led laggards. While we expect investors to hunt for bargain in some attractively priced stocks in the coming week, we maintain a bearish outlook for the market as sustainable catalysts for gains are yet to surface.

Source: Afrinvest