Bellwethers return bulls to stock market, ASI up 0.4% W-o-W

After recording losses for three consecutive weeks, the local bourse rebounded as investors took position in market bellwethers such as GUARANTY, NIGERIAN BREWERIES and ETI. As a result, the All Share Index (ASI) rose by 0.4 per centWeek-on-Week (W-o-W) to settle at 29,966.87 points while Year-to-Day (YTD loss improved to -4.7 per cent.

Literally, a bellwether is a sheep (often wearing a bell) that leads a herd. At the stock market, GTBank, Nigerian Breweries, among other led bulls back to the market.

Investors gained N50.9billion in value as market capitalisation increased to N13.2trillion. However, activity level was mixed as volume traded fell 72.8 per cent to 248.4million units while value traded rose 4.5 per cent to N5.4billion. ZENITH (409.7m units), WEMABANK (200.3million units) and GUARANTY (128.5million units) were the top traded stocks by volume while ZENITH (N8.2billion), GUARANTY (N4.0billion) and UNILEVER (N1.7billion) led by value.

On Monday, the domestic equities market commenced on a bearish note as losses in ETI, CCNN and NIGERIAN BREWERIES dragged the benchmark index down by 14 basis points (bps). The negative trend continued on Tuesday and Wednesday as the ASI dipped 47bps and 20bps respectively. However, the local bourse reversed losses as the benchmark index gained 47bps and 73bps on Thursday and Friday respectively.

Performance across sector was bullish as 4 of the 6 sectors under our coverage closed on a positive note W-o-W. The Consumer Goods index led gainers, up 3.2 per cent W-o-W following price appreciation in CHAMPION (+19.0 per cent) and INTBREW (+9.6 per cent). The Oil & Gas index trailed, rising 0.7 per cent W-o-W on account of an uptick in ETERNA (+8.2 per cent) and SEPLAT (+3.9 per cent) while gains in BERGER (+7.7 per cent) drove the Industrial Goods index 0.6 per cent W-o-W northwards. Similarly, the Banking index advanced 0.2% W-o-W on the back of buying interest in GUARANTY (+5.3 per cent). On the flip side, the Insurance index led laggards, down 1.5 per cent on account of sell-offs in NEM (-18.9 per cent) and AIICO (-4.3 per cent) while the AFR-ICT index shed 0.7 per cent due to a loss in MTNN (-0.7%).

Investor sentiment as measured by market breadth (advance/decline ratio) remain unchanged at 1.1x, following 34 stocks that advanced against 31 stocks that declined. The top performers for the week were CHAMPION (+19.0 per cent), MBENEFIT (+15.0 per cent) and ABCTRANS (+11.1 per cent) while NPFMCRFB (-19.2 per cent), NEM (-18.9 per cent) and FORTE (-14.1 per cent) led the laggards. In the coming week, we expect investors to take positions in attractive stocks ahead of earnings releases.

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