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Buying Interest In Banking Stocks Drive Positive Performance

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Sentiments in the Nigerian equities market remained positive with the benchmark index rising by 0.70 per cent week-on-week (W-o-W), as banking shares were the toast of most investors despite the suspension of trading on Skye Bank shares.

This is despite profit taking on three of five trading days of the week, the market closed positive as buying interest in fundamentally sound stocks like Guaranty Trust Bank, Zenith Bank and Stanbic IBTC Holdings drove the index higher W-o-W.

Overall, the All Share Index gained 226.20 points or 0.70 per cent to 32,766.37 points, while Year-to-Date losses moderated further to 14.32 per cent. Similarly, investors gain N82 billion as market capitalisation increased to N11.962 trillion.

Performance across sectors was mixed. Impact of the revoked license of Skye Bank and the consequent suspension of trading in its shares was muted, as interests in Tier one banks such as Zenith Bank and Guaranty Trust Bank, as well as some Tier two names such as Fidelity Bank and FCMB Groups led to the positive returns in the Banking index of 2.47 per cent growth, while the Insurance index also inched up 0.93 per cent on gains in AXAMansard and Linkage Assurance. On the flip side, the Industrial Goods index declined the most, down 1.36 per cent following profit taking in Lafarge Africa and Berger Paints. Similarly, sell pressures in Forte Oil, Total Nigeria, Nigerian Breweries and Guinness Nigeria dragged the Oil & Gas and Consumer Goods indices by 0.73 per cent and 0.51 per cent.

Meanwhile, market breadth was negative with 41 losers and 28 gainers. Niger Insurance led the gainers table by 19.35 per cent to close at 37 kobo per share. Veritas Kapital Assurance followed with a gain of 15.38 per cent to close at 30 kobo, while UACN Property Development Company rose by 14.71 per cent to close at N1.95 per share. On the other side, Union Bank led the decliners table by 12.07 per cent to close at N5.10 per share. Union Diagnostic & Clinical Services followed with a loss of 10.53 per cent to close at 34 kobo and Livestock Feeds declined by 9.52 per cent to close at 57 kobo per share.

Overall, the market saw a total turnover of 924.546 million shares worth N14.194 billion in 14,119 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.370 billion shares valued at N19.503 billion that exchanged hands previous week in 16,076 deals.

Outlook For This Week

The trading on the Nigerian Stock Exchange (NSE) will be opened for four day as Monday, October 1, 2018, been declared as public holiday to mark 2018 Independence Day celebration.

Analysts at Cordros Capital Limited stated that “despite recent gains, we reiterate our negative outlook for the equities market in the short-to-medium term, amidst political concerns ahead of the 2019 elections, and absence of a positive market trigger. However, positive macroeconomic fundamentals remain supportive of recovery in the long term.”

This week, analysts at Afrinvest Limited expected the mood of the market to be bullish as corporates release their nine months results.

“We also feel domestic retail and institutional investors would take advantage of the lower prices. More so, we maintain that investors should hunt for companies with potentially high dividend yields and have recorded increased earnings as at first half of 2018” they said.



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