MERISTEM: The Nigerian equities market closed on a positive note, rebounding slightly from last week’s loss. The Nigerian Stock Exchange All Share Index (NSEASI) inched higher by 1.38% WoW (0.50% ex-DANGCEM) to close at 35,488.81 points.
The volume of trades advanced by 22.26% as 16,070 deals worth NGN60.54trn were concluded. The year to date (YtD) return is currently pegged at 32.05%.
There were twenty-five (25) gainers and thirty-five (39) losers at the close of the week’s trading to settle the market breadth at 0.64x.
LINKASSURE was the week’s top performer, gaining 11.86% WoW to close at NGN0.66. CONTINSURE (+9.79%), GUARANTY (+7.03%) CILEASING (+6.72%), and SKYEBANK (+5.77%) also recorded gains during the week. On the other hand, ENAMELWA lost 16.65% WoW to lead others, such as CAVERTON (-9.17%), NEIMETH (-8.57%), TRANSCORP (-7.52%), and CUTIX (-7.33%), on the losers’ log.
In spite of the losses recorded on three (3) trading days, the market returned positive for the week. We attribute this positive outing to gains recorded by some large cap tickers, especially DANGCEM, which advanced by 3.50% WoW, thereby offsetting the sell downs noted on several stocks.
In the coming week, the Monetary Policy Committee (MPC) will announce its decision on the Monetary Policy Rate (MPR), which we have predicted will remain unchanged. Consequently, we expect the market to close up albeit marginally, given that the envisaged stability in monetary policy should improve investors’ confidence in the market.
Agricultural Sector: Losing Streak Continues
Following four days of decline in the week, the MERIAGRI index lost 5.30% WoW, closing the sector in the negative territory. This settled the YtD return at 49.49%. There was no gainer in the week, while two (2) stocks recorded declines.
PRESCO (-5.67%) topped the laggards’ list to close at NGN57.06.
In the same vein, OKOMUOIL (-4.95%) also declined to close at NGN63.21 at the close of the week.
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We attribute the negative outing recorded in the agricultural sector to sell pressures on the two large cap stocks in the sector (OKOMUOIL and PRESCO). In the coming week, we do not rule out further sell-downs on these stocks.
Banking Sector: GUARANTY places the Sector in the Green Zone
Reversing its downbeat trend, the MERI-BNK index which measures the banking sector’s performance, advanced by 3.23% WoW, lifting the YtD (year-to-date) return to 65.60%.
However, the market breadth which pegged at 0.86x favoured the decliners, as seven (7) losers topped six (6) gainers. Other tickers traded flat WoW.
This week, GUARANTY outperformed all other counters, with a share price appreciation of 7.03% WoW. Other counters on the gainers’ chart were SKYEBANK (+5.77%), UBA (+1.36%) and ETI (+1.12%). On the opposite side, UBN led the losers’ chart shedding 5.50% to close at NGN5.50. Other top losers include FCMB (-3.77%), UNITYBNK (-3.70%) and ACCESS (-2.22%).
Contributing c.47.87% to the MERIBNK index, GUARANTY’s 7.03% price appreciation drove the sector’s performance to the positive region despite the trickles of negative sentiment on most counters in the week. In the coming week, we expect the improved confidence on GUARANTY to filter into the rest of the tickers. In sum, we opine that the sector will close positive WoW.
Consumer Goods Sector: UNILEVER Tops the Gainers’ Chart
The consumer goods sector ended the week on a negative note, with the NSEFBT10 index closing in the red on four (4) trading days, causing a downward swing in the NSEFBT10 index by 0.23% WoW. Consequently, the Year to Date return (YtD) settled at 32.05%. The sector breadth closed at 0.88x indicating seven (7) gainers and eight (8) losers.
UNILEVER was the highest gainer for the week, advancing by 5.50% to close at NGN44.10. The ticker was followed by CADBURY (+4.66%), GUINNESS (+2.72%), NESTLE (+2.07%) and PZ (+0.88%) with respective closing prices of NGN11.00, NGN99.28, NGN1230.00 and NGN25.22. On the flip side, ENAMELWA led the losers’ table, after the stock declined WoW by 16.65% to close at NGN23.23. Other counters featured in this category were CHAMPION (-6.88%), DANGFLOUR (-3.88%), NASCON (-3.85%) and INTBREW (-3.59%).
The week’s negative close can be attributed to the sell pressures that characterized the sector at the start and close of the week, thereby outstripping the gains recorded by some large cap stocks. In the coming week, we expect the sector to be upbeat at the close of the week.
Healthcare Sector: MERIHLTH back in the red
The MERIHLTH index dipped marginally by 0.001% WoW, settling the Year-to-Date return at 35.32%. The sector had one (1) advancer and three (3) decliners, pegging the sector breadth at 0.33x.
MAYBAKER was the sole gainer after appreciating by 2.99% to close at NGN2.76. While on the decliners’ list, NEIMETH (-8.57%) was the top loser for the week. The ticker was trailed by MORISON (-3.85%) and FIDSON (-1.32%).
Sell pressures witnessed on NEIMETH, MORISON and FIDSON dragged the sector’s performance in the week. We expect a reversal of this mood in the coming week, as investors take advantage of stocks that have shed value in weeks past.
Industrial Goods: Sector Breadth Closes at 3.00x
Contrary to the loss recorded in the previous week, the industrial goods sector closed the week in the green zone as the MERI-IND index advanced by 2.03% week-on-week, thereby pushing the YtD return to 21.02%. The sector’s breadth settled at 3.00x, reflecting three (3) advancers and one (1) laggard.
DANGCEM was the best performing stock having gained 3.50% to close the week at NGN213.00. The ticker was trailed by WAPCO (+3.02%) and CCNN (+0.57%) which closed at NGN51.48 and NGN8.80 apiece. On the other hand, CUTIX was the sole loser for the week having shed 7.33% to close at NGN2.53.
During the week, Beta Glass Plc (BETAGLAS) notified the NSE on the change of its Independent Auditors from PricewaterhouseCoopers to EY (Ernst and Young) Nigeria.
We believe that the buy pressures which dominated large cap stocks in the industrial goods space drove the sector to the positive territory. We expect activities in the coming week to mirror that of this week, as positive sentiments may likely dominate counters that have shed value in previous weeks.
Insurance sector: CONTINSURE reaches year high at NGN1.57
The insurance sector rebounded from a two-week losing streak as the NSEINS10 index gained 1.41% WoW to settle its Year-to-Date (YtD) return at 9.97%. There were two (2) gainers and three (3) losers in the week, settling the sector breadth at 0.67x.
LINKASSURE gained 11.86% WoW to lead the top performers in the sector. The ticker was trailed by CONTINSURE (+9.79%). AIICO (-6.90%) lost for the second consecutive week to close as the worst performing stock in the sector. NEM and CUSTODYINS also took spots on the losers’ chart, losing 5.04% and 3.89% respectively.
The performance of the sector was largely driven by CONTINSURE, which is currently trading at its year high of NGN1.57. We anticipate the sector will close positive in the coming week, to be driven by positive sentiments towards other heavyweights in the sector.
Oil & Gas Sector: OANDO Sustains its Three-Week Losing Streak.
The oil & gas sector upturned the previous week’s gain, as the NSEOILG5 index pared by 3.05% WoW, to settle its YtD return at -10.65%. With one (1) gainer and three (3) losers, the market breadth settled at 0.33x at the end of the week’s trades.
FO was the only gainer after advancing by 4.18%, to close at NGN49.9. In the negative territory, SEPLAT led upon shedding 6.40% WoW and was followed by OANDO (-4.63%) and ETERNA (-3.51%).
The oil market continued its bullish ride, as Brent crude oil price settled higher at USD56.71pb as at the time of writing this report on the 22nd of September 2017.
As expected, the week’s negative outing can be attributed to the continued weak investors’ appetite for OANDO, alongside the sell-down noted on SEPLAT following last week’s gain. We expect the sector to be upbeat in the coming week.
Services Sector: Sector Sheds 0.34% WoW
At the close of trading activities this week, the services sector, as measured by the MERISER index closed in the red, dipping by 0.34% WoW, thereby settling the YtD return at -6.13%. The sector witnessed minimal activity, as there were only three (3) gainers and two (2) losers, settling the sector breadth at 1.50x.
CILEASING led the gainers for the week, advancing by 6.72% and closing at NGN1.27. AIRSERVICE and REDSTAREX were the other gainers for the week, advancing by 4.92% and 3.49% respectively. Contrarily, CAVERTON and NAHCO found themselves with the short end of the stick, recording respective declines of 9.17% and 2.26%.
A dip in general market activity was reflected in the sector as only five (5) stocks recorded activity in the week. The sector continued on the negative path as sell pressures prevailed for the second consecutive week. In the coming week, we expect to see a similar trend given the absence of any positive drivers of investors’ confidence.