Nigerian equities market gains momentum, records 36-month high

The Nigerian equities market has continued on a steady north-walk since May, overtaking other African markets as it records a 37.17 per cent Year to Date (YtD).

At the Nigerian Stock Exchange (NSE), last week, several companies reported their quarterly results before and after the close of trading in line with expectations, with a large number having impressive results, thus contributing to a positive trading perception.

The bourse sustained the bullish momentum for the third consecutive week, with the All Share Index (ASI) advancing further by 8.36 per cent (WoW) to 36,864.71 points, to reach a new year high and the highest since November 2014.

During the week, activity was broadly strong as the market closed positive on most of the trading sessions, except for Friday, when the market lost 1.02 per cent due to the sell-offs in the Industrial Goods, Oil & Gas and Insurance indices to outweigh the gains in the Banking and Consumer Goods indices.

During the week, investors’ interest in Banking at  9.52 per cent (WoW) counters persisted, as the news of approval of interim dividends by the boards of Tier 1 banks continued to stoke appetite, while positioning ahead of earnings releases by Dangote Cement Plc, Nestlé Nigeria Plc, Dangote Sugar Plc, and Nigerian Breweries Plc lifted the Industrial and Consumer Goods indices.

Performance across sectors was bullish with all sector indices appreciating 5.60 per cent on average, as the Banking index led the gainers, on renewed interest in ETI at 13.33 per cent; Zenith, 12.85 per cent; GTB, 9.63 per cent; UBA, 7.57, per cent and Access at 4.77per cent.

Consumer Goods sector followed with 7.53 per cent and Industrial Goods indices, at 5.94 per cent , which booked gains due to positioning in Nestle, Nigerian Breweries, Dangote Cement, and WAPCO.

In the same vein, the Oil & Gas closed the week at +3.08 per cent, and Insurance Sector, ar +1.96 per cent, following demand for the shares of Forte Oil, Total, Continental Insurance and Mansard Insurance.

Market breadth remained positive, with 48 gainers when compared with 35 of the preceeding week, topped by Conoil at 21.41 per cent gain, while  22 losers, led by Cadbury at 18.17 per cent loss.

However, total volume traded declined by 39.05 per cent to 2.21 billion shares from 3.63 billion, with Zenith, Access, and Diamond Banks accounting for 41.08 per cent of the market volume. Also, the value of trades declined by 12.18 per cent to N30.64 billion from N34.89 billion.

Analysts, however, posit that there would be reaction to the results to be evident this week, as investors evaluate the performance and act appropriately.

“We still expect more results to be released in the coming week, which will further drive performance. Given that activities in the market have been stretched for three consecutive weeks, we expect market movement to be broadly mixed in the coming week,” an analyst at Cordros said.