Zenith, Union bank debunk merger speculation, NSE records negative performance… ASI Sheds 0.7%

UNION Bank of Nigeria Plc and Zenith Bank Plc at the floor of the Nigerian Stock Exchange debunked rumours that that the two banks are in merger talks. They both issued a statement to the NSE and general public, stating that their attention has been drawn to recent online speculation suggesting an agreement with Zenith Bank Plc to Acquire Union Bank Plc. The banks further stated that there is no such agreement and no binding offer has been made by any party to either their shareholders or the Board of Directors.

Meanwhile sell pressures in DANGCEM (-10.0%), INTBREW (-9.6%) and NASCON (-10.0%) drove the All-Share Index down 71bps  to 22,543.07 points. Consequently, YTD return worsened to -16.0% while market capitalisation fell ₦84.5bn to ₦11.8tn. Activity level improved as volume and value traded rose 22.6% and 40.0% to 675.8m units and ₦8.1bn respectively. The most active stocks by volume were ZENITH (173.9m units), GUARANTY (131.1m units) and FBNH (119.3m units) while GUARANTY (₦2.6bn), ZENITH (₦2.3bn) and NESTLE (₦745.4m) led by value.  

Across sectors, performance was mixed as 3 of 6 indices under our coverage gained. The Banking and AFR-ICT indices led gainers, up 5.6% and 1.0%, due to buy interest in ACCESS (+10.0%), ZENITH (+5.5%) and MTNN (+1.9%). Similarly, the Insurance (+0.9%) index trailed, on the back of gains in NEM (+5.3%) and MANSARD (+3.3%). Conversely, the Industrial Goods (-2.2%) index declined the most, due to price depreciation in DANGCEM (-10.0%) while losses in ARDOVA (-9.8%), INTBREW (-9.6%) and NASCON (-10.0%) dragged the Oil & Gas and Consumer Goods indices down by 61bps and 4bps respectively. 

Investor sentiment as measured by market breadth (advance/decline ratio) improved to 2.5x from the 1.4x recorded in the previous trading session as 27 stocks advanced relative to 11 decliners. The best performers were WAPCO (+10.0%), UCAP (+10.0%) and ACCESS (+10.0%) while NASCON (-10.0%), DANGCEM (-10.0%) and ARDOVA (-9.8%) led the laggards. We expect the bearish sentiment to persist for the rest of the week. However, we note that there are opportunities for bargain hunting.

Market Statistics for Tuesday, 17th March 2020 

Source: Afrinvest