Bears return, as lockdown inflicts deep cut on economy


… Investors lose N167bn at NSE
… Global markets bows, U.S Senate approves relief of $484bn

No market is spared. Both developed, emerging and poor markets faced the same verdict as most markets closed in the red last week. Investors in Nigeria lost N167 billion at the stock exchange. Performance in the developed markets was lacklustre, with all indices tracked recording losses.
Back home, the All Share Index (ASI) declined 1.4 per cent last week. This is in spite of the fact that the local bourse saw positive performance on two trading sessions.
Also, we saw several Q1:2020 earnings releases during the week although performance was mixed. Consequently, the All-Share index lost 1.4 per cent week-on-week (w/w) to 22,599.38 points due to sell-offs in UACN (-17.3 per cent), GUINNESS (-15.6 per cent) and OANDO (-12.2 per cent)”, performance in the developed markets was lacklustre, with all indices we track recording losses said analysts at Afrinvest.
Similarly, Year -to-Date (YTD) return lowered to -15.8 per cent and market capitalisation declined N167.9 billion to N11.8 trillion.
Activity level was down as average volume and value traded declined 36.1 per cent and 13.3 per cent to 239.0 million units and N2.8 billion respectively. The most traded stocks by volume were FBNH (249.5 million units), ZENITH (128.6 million units) and GUARANTY (115.6 million units) while NESTLE (N3.1 billion), GUARANTY (N2.3 billion) and ZENITH (N1.8 billion) led by value.
Performance across sectors was mixed w/w. The AFR-ICT (+1.3 per cent), Insurance (+1.2 per cent), and Industrial Goods (+0.7 per cent) indices gained, following price accretion in MTNN (+2.5 per cent), NEM (+10.0 per cent) and BUACEMENT (+3.6 per cent) respectively.
On the flipside, sell pressures in ETI (-8.0 per cent), ACCESS (-7.5 per cent) and FBNH (-7.4 per cent) compelled a 5.2 per cent loss in the Banking index. Trailing, the Consumer Goods and Oil & Gas indices dipped 2.6 per cent and 1.7 per cent respectively owing to price declines in GUINNESS (-15.6 per cent) and OANDO (-12.2 per cent).
Investor sentiment as measured by market breadth (advance/decline ratio) waned to 0.7x from 1.8x last week as 23 tickers gained against 31 that declined. CADBURY (+18.3 per cent), WEMABANK (+10.7 per cent) and NEM (+10.0 per cent) led the top gainers while UACN (-17.3 per cent), GUINNESS (-15.6 per cent) and CHAMPION (-15.6 per cent) led the decliners. In the coming week, we anticipate a mixed performance as investors react to corporate earnings releases and CBN’s N1.4 trillion Cash Reserve Ratio (CRR) debit of commercial banks.
On the global market, against a weak macroeconomic backdrop, performance in the developed markets was lacklustre, with all indices tracked recording losses. In the US, the S&P 500 and NASDAQ declined 2.3 per cent and 1.8 per cent respectively. The UK’s FTSE All Share fell 0.1 per cent w/w while Germany’s XETRA DAX and France’s CAC 40 indices fell 2.2 per cent and 1.9 per cent w/w respectively as the bloc failed to agree on its €1.0 trillion proposed stimulus. Similarly, Japan’s Nikkei 225 and Hong Kong Hang Seng Indices lost 3.2 per cent and 2.3 per cent w/w respectively.
Performance across the BRICS markets was mixed as three of five indices lost w/w. South Africa’s FTSE/JSE All-Share and Russia’s RTS gained, up 0.6 per cent and 0.3 per cent respectively.
On the flip side, Brazil’s Ibovespa led the losers, down 6.0 per cent w/w due to political crisis in the country. Similarly, China’s Shanghai Composite and India’s BSE Sens indices also ebbed lower by 1.1 per cent and 0.8 per cent w/w respectively.
In Africa, performance was bearish with five of six indices closing lower w/w as the region continued to reel from the effect of COVID-19 outbreak. Only the Ghana GSE Composite index gained, appreciating 2.2 per cent w/w. Mauritius’ SEMDEX reported the highest sell-offs, declining 6.5 per cent. Egypt’s EGX 30 and Nigeria’s All-Share indices trailed, down 3.2 per cent and 1.4 per cent w/w respectively. In the same vein, Morocco’s Casablanca MASI and Kenya’s NSE 20 indices trended south, losing 0.5 per cent and 0.3 per cent w/w respectively.
The Asian and Middle East markets recorded a mixed performance as two of five indices closed in the red. Qatar’s DSM 20 and Saudi Arabia’s Tadawul ASI lost 1.2 per cent and 0.4 per cent respectively. Turkey’s BIST 100 gained the most, up 2.6 per cent w/w as investors reacted positively to the 100bps cut in interest rates. UAE’s ADX General and Thailand’s SET indices trailed, advancing 2.4 per cent and 1.6 per cent w/w respectively.
Global markets are so affected because last week, COVID-19 continued to spread this week, with the total number of cases reaching 2.7m from 1.9m last week while the death toll rose to 191,167 from 130,885 persons. Meanwhile, optimism about a potential vaccine was dashed as Gilead’s ‘Remdesivir’ failed the first clinical trial. The US remains the hardest hit with active cases and death toll totaling 888,709 and 50,243 respectively. Similarly, an additional 4.4m people filed unemployment claims, taking total Coronavirus-induced job losses to 26.5 million (16 per cent unemployment rate). The US Senate has approved a coronavirus relief bill of $484.0 billion to provide new funding for distressed small businesses, with readiness to deploy more relief packages. In the coming week, we expect concerns on the spread of the virus to shape investor sentiments in the markets.

Corporate Results
Ecobank Transnational Incorporated Plc (Unaudited Q1:2020 Result): Gross Earnings fell 2.0 per cent year-on-year (y/y) to N194.5 billion from N198.5 billion while PAT contracted 19.3 per cent y/y to N24.7 billion from N30.6 billion in Q1:2019.
MTN Nigeia Communications Plc announced a final dividend of N4.97 per share. Dividend yield stood at 4.9 per cent with a share price of N100.00. Qualification date is 17th April, 2020 while payment date is 19th May, 2020.
United Bank of Africa Plc (Unaudited Q1:2020 Result): Gross Earnings grew 11.8 per cent y/y to N147.2 billion from N131.7 billion while PAT rose 5.0 per cent y/y to N30.1 billion from N28.7 billion in Q1:2019.

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