Nigerian Stock Market Review: What To Expect This Week

#TheNumbers for the week ended September 16, 2016 

Highlights

• CPI rose 17.60% in August 50bps higher than the 17.10% printed in July
• S&P lowers Nigeria ratings to ‘B/B’ on weak growth dynamics

Commentary

Nigerian stocks saw a lull in trading activity impacted by the 2–day public holidays at the start of the week. Expectations of the upcoming MPC meeting also kept a lot of traders sitting on their hands. In spite of these, the market saw gains in all 3 sessions, extending its run of 6– consecutive sessions of gains. Put together, the All-Share Index ended with a WoW gain of 102bps to close 27,858.48pts. At current levels, the YtD loss has trimmed to -2.74%.

Sector wise, the Consumers were most up, climbing 230bps on gains in the likes of UNILEVER (+14.23%), INTBREW (+5.26%), & NB (2.29%). The Industrials and Oils followed with gains of 103bps and 99bps respectively on gains in DANGCEM (+1.77%), CONOIL (+33.84%)& TOTAL (+3.70%). On the flip side, we have the Financials stocks closing lower for the week. The Banks dipped 92bps WoW while the Insurers dipped 104bps WoW. The weakness in the banks was due to selling pressure in the likes of UBA, FCMB & FBNH. We note some weakness in GUARANTY which had stayed firm around the N27.00 level in the last couple of weeks before it was ramped up in the closing moments of Friday’s session.

On the back of the holidays, the bourse saw a turnover of 0.611bn shares valued at N5.495bn compared with the 1.183bn shares valued at N10.300bn that traded in the previous week. In terms of daily average turnover it was lower by a more respectable 11% to N1.832bn from N2.06bn in the previous week. Investor cash largely went into the shares of GUARANTY (N1.55bn), NB (N0.875bn) and ZENITHBANK (N0.427bn) – these accounted for c.52% of total market turnover.

The Week Ahead

• MPC meeting on Monday and Tuesday, consensus is a hold on MPR
• With the quiet summer weeks out of the way, we should start to see an uptick in participation levels.

Market Snapshot

Sector Performance:

Risers & Decliners:

• Top Risers:

CONOIL (+33.84%; N31.84); UNILEEVER (+14.23%; N46.00) & AFRIPRUD (+13,71%; N2.82)

• Top Decliners:

NEIMETH (-8.47%; N1.08); AIICO (-7.46%; N0.62) & TRANSCORP (-7.14%; N1.04)