Equities market grows N277b amidst positive Q2 earnings forecast

The Nigerian equities market recorded a N277 billion gain in Market capitalisation that closed the week ended 14th July, 2017 at N11.464 trillion.

The week’s bullish close was preceded with all trading sessions within the week ending on a positive note as investors continue taking position in value stocks, especially the banking stocks ahead of the second quarter (Q2) earnings season.

The positive performance for the week pushed the NSE ASI higher by 2.47per cent to 33,261.66 points, driving the MtD return positive to 0.44 percent and YtD return to 23.77 percent.

The banking index posted the largest gain of 6.10 percent while gains across most sector indices during the week also reflect investors hunting bargain in expectation of another impressive quarter of returns in line with the performance in Q1 2017.

In a similar vein, the industrial goods index record an increase of 2.94 percent. The oil & gas index grew 2.31 percent, insurance index was up 0.88 per cent, and consumer goods index added 0.71 percent.

Major hunted stocks that accounted for the growth across the industrial and oil & gas sectors were WAPCO that grew 4.00 percent this week, Dangote Cement that added 1.99 percent, Forte Oil that appreciated 15.34 percent, and Mobil’s 9.91 percent growth.

Custodian and Allied Insurance recorded a 5 percent growth while AIICO Insurance improved 3.39 percent this week contributing significantly to the growth recorded in the Insurance Index.

Boosting the consumer goods index were Flourmills and 7up that added 9.75 percent and 8.82 percent respectively in the course of trading during the week in review.
Market breadth consequently turned positive, with 45 gainers (16 last week), topped by Neimeth which appreciated 24.62 percent versus 25 losers (49 last week) led by Conoil that fell 17.43 percent this week.

Total volume traded this week, by investors on the floor of the Exchange, increased by 20 percent to 1.3 billion shares worth N13.993 billion in 19,385 deals. This is in contrast to a total of 1.061 billion shares valued at N12.295 billion that exchanged hands last week in 18,847 deals.

UBA, FBN Holdings, and Zenith Bank accounted for 505.4 million shares or 40 percent of the market’s total volume valued at N5.5 billion and traded in 4,009 deals.
According to stock market experts, the positioning in the Banking index was due to demand for the shares of the Tier 1 banks except FBNH which dipped 0.98 percent this week and a few in the Tier 2 counters.

They also revealed that the Consumer Goods index recorded the lowest gain for the week, following two days of profit taking on Monday and Thursday.

They however, expect a turn in the tide across the Consumer Goods sector in the coming week, amid an impressive result released by Unilever Nigeria Plc on Friday wherein revenue rose 48 percent y/y and PAT surged monumentally in excess of 3000 percent.

In the same vein, we expect the rally in other sectors to persist ahead of the Q2 earnings releases. Overall, we forecast the bulls to dominate the bourse in the coming week,” they said.