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Stock Market Up By N107bn On Increased Demand

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Despite a stream of disappointing second quarter, 2016 economic data, negative GDP growth, declining capital importation, rising unemployment rate and up trending July inflation that hit the market last week, the Nigerian stock market rebounded from previous week’s loss, with a growth of 1.11 per cent.

The NSE All Share Index, ASI increased week-on-week by 1.11 per cent to close at 27,756.67 points, bringing year-to-date loss to 3.1 per cent. Similarly, the market capitalization advanced by N107 billion to settle at N9.535 trillion

Uptrend was driven by price appreciation in market heavyweight, Dangote Cement which published a press release during the week that ex-factory price of cement in Nigeria will be hiked by N600 per bag while switching to coal as a source of energy for its production lines scheduled to begin in November as this is expected to trim operating cost and boost profit margins.

Most sector indices closed positive, NSE Oil & Gas Index, Consumer Goods, Banking and Insurance increased by 4.12 per cent, 1.13 per cent, 0.70 per cent and 0.89 per cent.

Weekly Performance Summary

Despite a bearish start to the week, the equities market has more than recouped earlier losses, posting gains for three consecutive days on account of bargain hunting.

Market breadth was negative, with 28 gainers, versus 30 losers compared to 27 gainers against 23 losers the preceding week.

Total volume traded dropped marginally for the week by 0.74 per cent to 1.12 billion shares, worth N13.82 billion and traded in 16,083 deals, compared to the 1.12 billion shares, valued at N13.84 billion that exchanged hands in 15,625 deals previous week.

Banking stocks dominated market activities by volume, as Guaranty Trust Bank, UBA and Diamond Bank traded 138.01 million, 130.34 million and 126.16 million of shares, collectively the three accounted for 35.37 per cent of total volume traded during the week, while Guaranty Trust Bank, Nigerian Breweries and Nestle sold shares worth N3.69 billion, N2.22 billion and N1.85 billion, accounted for 31.82 per cent of total value of transactions.

The best performing stocks for the week was Seven Up with a gain of 28.23 per cent to close at N144.90 per share. Wema Bank followed with a gain of 17.19 per cent to close at 75 kobo, while Seplat advanced by 15.76 per cent to close at N318.33 per share.

While Presco went up by 11.88 per cent to close at N45.30 and Skye Bank rose by 8.47 per cent to close at 64 kobo per share.

On the other hand, May & Baker led the laggards’ table by 19.80 per cent to close at 81 kobo per share. Unity Bank trailed with a loss of 10.71 per cent to close at 75 kobo, while Julius Berger declined by 9.71 per cent to close at N43.69 per share.

Also, Cutix declined by 9.09 per cent to close at N1.50, while Caverton shed by 8.90 per cent to close at N1.33 kobo per share.

Outlook for the week

Stock market analysts expected that this week to be mixed, with sentiments more likely to be shaped by the realities of the macro fundamentals

Analysts at Afrinvest Limited noted that “For this week, performance is expected to remain weak on back of frail macroeconomic activities and waning investor sentiment for equities.

While analysts at Cowry Asset Management said that this week, we anticipate a mix of bargain hunting and profit taking activities as fixed income instruments continues to beckon on investors.

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