The Nigerian stock market closed the week ended September 15th on the losing end shedding about 2.65%. This was the worst week in about 7 weeks as investors blamed profit taking for the reason for the drop.
Despite this drop, the All Share Index is still up year to date 30% and is looking likely to close the quarter at least above 25%. Last week about 24 gainers and 47 losers were recorded compared to 28 gainers and 45 losers the previous week.
Here is a review and outlook for select sectors in the coming week as analysed by Meristem, one of Nigeria’s leading stockbroking firms.
Banking Sector: Bearish Run Persists
The banking sector sustained its losing streak as the MERI-BNK index pared by 3.03% WoW, bringing the YtD (year-to-date) return to 60.42%. The market breadth (0.36x) mirrored the sector’s sentiment, as eleven (11) decliners topped four (4) gainers.
STERLNBANK outperformed the sector this week, recording a share price appreciation of 4.08% WoW.
Other counters on the gainers list were ACCESS (+2.06%), ETI (+0.68%) and UBA (+0.45%). On the flip side, SKYEBANK topped the losers’ list declining by 11.86% to close at NGN0.52. Other top losers include UNITYBNK (-5.26%), ZENITHBANK (-4.25%), and GUARANTY (-4.00%).
The MERI-BNK index closed in the red due to profit-taking activities on bellwether stocks in the sector.
In the coming week, we expect this mode to linger in the absence of positive news inflow to drive performance. We, however, do not rule out the possibility of bargain hunting activities on some Tier 2 banks.
Consumer Goods Sector: Index Sheds 2.52% WoW
At the end of the week, the NSEFBT10 index declined by 2.52%, bringing the Year to Date return (YtD) return to 32.12%. The sector breadth closed at 0.50x, with four (4) gainers and eight (8) losers.
INTBREW advanced by 9.50%, topping the gainers’ list, to close at NGN38.95. Other stocks featured on the gainers’ chart include UNILEVER (+4.50%), DANGFLOUR (+1.10%), and GUINNESS (+0.33%). In contrast, FLOURMILL (-8.67%), HONYFLOUR (7.32%), NB (-5.15%) and PZ (-3.62%) were the week’s top losers.
During the week, International Breweries Plc (INTBREW) notified the public about a change in their accounting reference period with a new financial year end date of December 31st from March 31st.
We posit that the decline in sector performance was largely attributed to sell-offs on the sector’s heavyweights. We also note a markdown in the price of FLOURMILL, following the company’s dividend issue. We expect positive market sentiments to be regained in the coming week.
Healthcare Sector: GLAXOSMITH Gains 1.90% WoW
The MERIHLTH index advanced by 1.70% this week, upturning the marginal loss of 0.03% recorded in the prior week. As a result, the year to date return increased to 35.32%. The sector breadth settled at 0.33x, as one (1) stock appreciated, while three (3) declined.
The only gainer in the sector was GLAXOSMITH, as the ticker gained NGN0.40 (1.90% week on week), to close at a price of NGN21.40. On the other hand, NEIMETH shed 8.43% of its value, to settle at NGN0.76. MAYBAKER and FIDSON also declined this week, shedding 10.67% and 3.49% respectively, to close at NGN2.68 and NGN3.04.
We attribute the gain recorded this week to the price appreciation on the sector heavyweight, GLAXOSMITH. In the week ahead, we expect positive sentiments to continue, however, we do not rule out some sessions of profit taking activities.
Industrial Goods Sector: Lone Gainer to Close the Week
The industrial goods space was largely dominated by bearish sentiments in the week. Consequently, the sector closed down, as the MERIIND index pared by 4.25% to settle the year-to-date return at 18.61%. The sector featured a lone gainer and six (6) losers pegging the sector’s breadth at 0.17x.
CUTIX emerged the lone gainer having advanced by 5.00% to close at NGN2.73 for the week. On the flip side, WAPCO (-5.31%) was the worst performing stock, to close the week at NGN49.97, closely trailed by DANGCEM (-4.28%), BERGER (-4.11%), FIRSTALUM (-3.70%) and CAP (-2.94%).
During the week, Dangote Cement Plc (DANGCEM), communicated its interest in the proposed acquisition of the entire shares of PPC Limited; the largest cement player in South Africa.
We attribute the sector’s performance to profit-taking activities witnessed on bellwether stocks in the sector. We posit that in coming weeks, bargain hunting activities will be seen on counters that have previously experienced share price depreciation.
Insurance sector: NEM Outperforms the Sector
The insurance sector sustained its bearish momentum as the NSEINS10 index dipped by 0.33% WoW, dragging the year to date (YtD) return to 8.44%.
At the close of trading this week, the sector breadth stood at 0.20x as there was only one gainer (1) and five (5) laggards.
NEM (+19.00%) was the sole gainer for the week to close at NGN1.19. On the flip side, LINKASSURE emerged as the top underperformer dipping by 7.81% to settle at NGN0.59. MANSARD (-2.56%), WAPIC (-1.96%), AIICO (-1.69%) and CONTINSURE (1.38%) also featured on the losers’ chart.
The sector’s performance on the bourse can be attributed to the continued profit taking activities on some of its bellwether counters. In the week ahead, we expect a reversal of the current trend as some level of bargain hunting activities should resume in the sector.
Oil & Gas Sector: SEPLAT Outperforms the Market
The oil and gas sector advanced this week, as the NSEOILG5 index inched up by 0.17% WoW, settling the YtD return at -7.85%. The sector had one (1) advancer and six (6) decliners pegging the sector breadth at 0.17x.
SEPLAT stood out as the sole gainer advancing by 5.00%. On the decliners’ list, OANDO (-6.30%) was the top loser, the counter was trailed by CONOIL (-5.00%), ETERNA (-4.74%), FO (-1.81%) and TOTAL (-0.38%).
Brent crude oil price settled higher at USD55.80pb as at the time of writing this report on the 15th of September 2017.
We attribute this week’s gain to bullish sentiments on one of the sector’s large cap stocks. We however expect a reversal of this trend in the coming week but do not rule out the possibility of marginal gains on bellwether counters.
Services Sector: CILEASING Leads the Gainers Chart
The services sector, as measured by the MERISER index, closed in the red zone for the week dipping by 1.02% WoW, to settle the Year to Date return at -6.26%. Market breadth at 2.00x signified four (4) gainers and two (2) laggards.
CILEASING led the gainers’ list, advancing by 12.26% to close at NGN1.19. AIRSERVICE (+9.06%), TRANSCOHOT (+4.95%) and CAVERTON (+0.84%) also recorded price gains to close at NGN6.50, NGN7.21 and NGN1.20 respectively. Contrarily, LEARNAFRCA (3.90%) and NAHCO (-3.73%) closed down for the week settling at NGN0.74 and NGN3.19 apiece.
We attribute the negative performance in the week to pockets of profit-taking activities witnessed on some of the sector’s counters. We expect a continuation of this trend in the coming week.
Source: Meristem
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