Bulls rule over bears in week of historic 4.9% ASI record

Investors set for more profit taking against analysts’ bearish outlook

LAST WEEK, INTEREST IN THE LOCAL equities market remained strong. Investors were attracted by the currently low market valuation amidst the continued low yield environment in the fixed income space. The performance also reflected an improvement in risk appetite despite looming uncertainty surrounding the business terrain due to the pandemic.

Furthermore, trading opened the week positive on Monday (+2.1%) while Tuesday was met with a whopping 4.9 per cent gain (the highest on record since April 2015), due to buying interest in Dangote Cement, MTN and Zenith Bank.

However, the market shed gains in subsequent sessions as some investors booked profit. Consequently, the All-Share index rose 5.6 per cent week on week to 28,415.31 points, market capitalisation hit N14.9 trillion (+N777.9billion w/w) while the year to date (YTD) return settled at 5.9 per cent.

Capturing the pick-up in activity level, average volume and value traded advanced 87.9 per cent and 82.3 per cent to 376.3 million units and N3.9 billion respectively. The banking stocks were the most active as Zenith Bank (530.7 million units), FBN Holding (287.9 milion units) and United Bank for Africa (273.6 million units) led by volume while Zenith Bank (N10.5 billion), Guaranty Trust Bank (N5.3 billion) and United Bank for Africa (N1.9 billion) led by value.

Similarly, there was an impressive sector performance as all sectors gained week on week. The AFR-ICT and banking indices gained the most, up 8.0 per cent and 7.8 per cent respectively due to buying interest in MTN Nigeria (+8.1%) and Airtel Africa (+7.9%) as well as FBN Holding (+19.2%) and Access Bank (+18.4%).

Similarly, price appreciation in Dangote Cement (+4.2%) and Wapco Plc (+12.2%) buoyed the industrial goods index by 2.8 per cent from the previous week. Lastly, consumer goods, oil & gas and insurance indices appreciated 2.0 per cent apiece due to price accretion in International Breweries (+21.0%), Eterna Plc (32.5%) and Linkage Assurance (15.8%).

Meanwhile, during the week, investor sentiment as measured by market breadth (advance/decline ratio) improved to 4.1x from 2.4x the previous week as 53 stocks gained against 13 that declined. Eterna plc (+32.5%), International Breweries (+21.0%) and Africa Prudential (+20.6%) led gainers while UAC

Property (-12.0%), Tripple Gee (-10.0%) and DEAP CAP (-10.0%) led the decliners.