U.S. stocks closed higher yesterday, following impressive data for a potential COVID-19 vaccine and a strong quarterly report by America’s leading investment bank, Goldman Sachs.
Recall that some hours ago, Nairametrics reported on Moderna Inc rallying after a small-scale study showed that its experimental COVID-19 vaccine produced high levels of virus-killing antibodies.
“The Moderna news woke everybody again that this is not going to last forever, and there is light at the end of the tunnel. That is why you are seeing such a strong move today into those economically sensitive stocks,” said Tim Ghriskey, Chief Investment Strategist Inverness Counsel in New York in a note Reuters.
America’s elite bank Goldman Sachs surged after it reported that its trading revenue doubled in the second quarter, driven by high volatility in stock and bond markets since March.
In addition, Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, explained geopolitical macros, affecting the U.S Stock market. He said:
“The S&P500 closed on an upbeat note as US equities continued to defy all gravity as investor optimism revels amid the progress in developing a vaccine which continues to reign supreme.
“Adding to the positive vibe, President Trump defused the US-China tensions and walked back an unwanted element of geopolitical risk that quite frankly no one wanted or needed at this point with COVID-19 ravaging large parts of the US consumer complex.
“The President’s backpedaling is coming at a good time and keeping the omnipresent bears and prophets of doom at bay for now.”
ZENITH BANK, ECOBANK, UBA, record losses, as ASI drops by 0.06%
The market breadth index was broadly positive with 18 gainers as against 11 losers.
The Nigerian Stock Exchange started the first trading week on a slightly bearish note. The All Share Index dropped by 0.06% to close at 25,027.61 basis points, as against +0.45% gain recorded previously.
Its Year-to-Date (YTD) returns currently stands at -6.76%. Also, the Nigerian bourse’ market capitalization presently stands at N13.056 trillion.
The activity levels were mixed such that while the total volume of shares traded in 4,294 deals improved by 5.02% to 175.32 million units, the total value fell by -28.93% to N1.43 billion. FBNH was the most traded by volume at 22.93 million units as GUARANTY topped by value at N344.27 billion.
Meanwhile, the market breadth index was broadly positive with 18 gainers as against 11 losers. CORNERST (+9.09%) led the gainer’s chart today, while CHAMPION (-9.47%) topped the losers.
The top gainers
- UNILEVER up 7.14% to close at N12
- UCAP 6.93% to close at N3.24
- GUINNESS up 6.38% to close at N15
- CAP up 2.94% to close at N17.5
- WAPCO up 2.13% to close at N12
The top losers
- UACN down 4.84% to close at N5.9
- ETI down 4.71% to close at N4.05
- UBA down 1.53% to close at N6.45
- BUACEMENT down 1.39% to close at N38.95
- ZENITHBANK down 0.59% to close at N16.8
Outlook for the coming days
The NSE ended Monday’s trading session on a slightly bearish note, as the Federal Government lifted the ban on interstate travels coupled with the resumption of local flights. These have helped in boosting economic activities around major economic hubs in Nigeria.
However, Nairametrics envisages cautious buying on that basis of prevailing low market liquidity and the recent plunge in Nigeria’s external reserve below the $36 billion levels.
Global stocks surge, triggered by solid economic data
Shares of oil majors, BP and Royal Dutch Shell gained 3.4% and 2.7% respectively.
Global Stocks rose high on Monday as industrial activity in the world’s second-largest economy gained strength. This is another sign of recovery after an impressive U.S Jobs report released on Friday.
The broader Euro STOXX 600 rose 0.6%, with London’s FTSE buoyed 1% and European oil and gas shares surging 2% on rising oil prices.
Shares of oil majors, BP and Royal Dutch Shell, gained 3.4% and 2.7% respectively after Saudi Aramco raised optimism about growth in demand in the Asian oil market. Iraq had also pledged to curb its oil production.
“China is so much in advance in this process of lockdowns and exiting lockdown, that any good signs for the Chinese economy are essential (for the world economy),” said Florian Ielpo, head of macroeconomic research at Unigestion.
Deflation at China’s factories eased in July, data showed, driven by a rise in global energy prices and industrial activity climbing back towards pre-coronavirus levels. In other words, industrial output in China is steadily returning to levels seen before the pandemic paralyzed huge swathes of the economy, driven by pent-up demand, government stimulus, and surprisingly resilient exports.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics explained the macros affecting stock traders, especially in the American stock markets. He said;
“US Mega Cap stocks put in another solid week, but fatigue is showing in Software/ SaaS. Single-stock dispersion and volatility underneath the surface are picking up with a focus on Small and Midcap earnings.
“The US election will become more of a focus once the earnings season is over even more so as most of the worst-case scenario leaves US President Donald Trump out of the equation.
“The President is growing desperate in the face of rising infections and falling poll numbers. And if he thinks it will boost his polling numbers, look for him to lash out at China more aggressively even heaping on additional tariffs.”
SEPLAT, STANBIC , GUINNESS surge ,Investors gain N182 Billion WoW
This was triggered by buying pressures from institutional investors on blue-chip stocks.
The Nigerian bourse ended the week on a strong bullish run. It recorded gains for five straight days as the All-Share Index and Market Capitalization both appreciated by 1.41% to close the week at 25,041.89 and N13.063 trillion respective. Investors Gained N181.62billion on a week to week basis.
A total turnover of 1.065 billion shares worth N10.798 billion in 20,482 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 421.984 million shares valued at N5.337 billion that exchanged hands last week in 11,801 deals.
The Financial Services industry (measured by volume) led the activity chart with 677.301 million shares valued at N5.070 billion traded in 10,386 deals; thus contributing 63.59% and 46.95% to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 153.384 million shares worth N580.216 million in 894 deals. The third place was the Industrial Goods industry, with a turnover of 57.404 million shares worth N861.263 million in 1,671 deals.
Trading in the top three equities namely FBN Holdings Plc, UACN Plc, and Access Bank Plc.(measured by volume) accounted for 320.196 million shares worth N1.802 billion in 2,639 deals, contributing 30.06% and 16.69% to the total equity turnover volume and value respectively.
All other indices finished higher with the exception of the NSE Insurance Index which depreciated by 0.28% while the NSE ASeM closed flat.
Forty-one (41) equities appreciated in price during the week, higher than twenty-four (24) equities in the previous week. Eighteen (18) equities depreciated in price, lower than twenty-eight (28) equities in the previous week, while one hundred and four (104) equities remained unchanged, lower than one hundred and eleven (111) equities recorded in the previous week.
Top 10 gainers
- NEIMETH INTERNATIONAL PHARMACEUTICALS PLC up 21.33% to close at N1.82
- UACN PROPERTY DEVELOPMENT COMPANY PLC up 18.52% to close at N0.96
- FLOUR MILLS NIG. PLC. up 13.20% to close at N19.30
- SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC up 12.83% to close at N350.00
- STANBIC IBTC HOLDINGS PLC up 10.00% to close at N33.00
- VALUEALLIANCE VALUE FUND up 9.98% to close at N113.50
- UNIVERSITY PRESS PLC. up 9.90% to close at N1.11
- AXAMANSARD INSURANCE PLC up 9.72% to close at N1.58
- FIDSON HEALTHCARE PLC up 8.57% to close at N3.42
- GUINNESS NIG PLC up 8.46% to close at N14.10
Top 10 Losers
- U A C N PLC. down 11.43% to close at N6.20
- TOTAL NIGERIA PLC. down 9.91% to close at N79.10
- ARDOVA PLC down 9.67% to close at N12.15
- CUSTODIAN INVESTMENT PLC down 9.09% to close at N5.00
- SUNU ASSURANCES NIGERIA PLC. down 9.09% to close at N0.20
- CONSOLIDATED HALLMARK INSURANCE PLC down 8.89% to close at N0.41
- MUTUAL BENEFITS ASSURANCE PLC. down 8.70% to close at N0.21
- UNILEVER NIGERIA PLC. down 8.57% to close at N11.20
- NEM INSURANCE PLC down 6.50% to close at N1.87
- LINKAGE ASSURANCE PLC down 5.00% to close at N0.38
Nigerian bourse against all odds finished high. This was triggered by buying pressures from institutional investors on blue-chip stocks. However, it was not all blue for the Nigerian bourse as market liquidity remained relatively low.
Nairametrics recommends cautious buying on growing concerns that the recent lockdown extension by President Buhari could delay a full economic recovery in Nigeria’s major economic hubs.