Nigeria’s Stock Market to Erase Year-to-Date Loss

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…as performance index regains 31,000 bps on straight 5-day gain

The All Share Index (ASI), which is performance indicator of Nigeria’s stock market on Wednesday, May 22, regained a 31000 basis points (bps) psychological mark on the back drop of five consecutive days of gains witnessed since the listing of MTN Nigeria shares.

This performance, if persistent is set to erase the year-to-date loss which has consequently improved to -0.9% from -3.9% recorded in the previous session and move the market towards growth performance last witnessed months ago.

Also Read: NSE Clarifies Misconception on MTN Nigeria’s Free Float Valuation

The ASI on Wednesday rose by 3.1 percent to settle at 31,145.15 points, largely driven by price appreciation in MTNN (+10.0%), DANGCEM (+9.7%) and GLAXOSMITH (+5.3%), while market capitalisation advanced by N408.3bn to N13.7tn.

Activity level on the other hand was mixed as volume traded declined by 12.2% to 294.4m units and value traded advanced 1.7% to N17.5bn. MTNN (93.7m units), ZENITH (29.5m units) and UBA (22.4m units) were the most traded stocks by volume while MTNN(N13.6bn), DANGCEM (N1.7bn) and ZENITH (N566.4m) led top traded stocks by value.

A review of performances across sectors was however bearish as 4 of 5 major indices trended southwards. The Consumer Goods index led decliners, down 3.6% on account of sell-offs in NESTLE (-7.7%) and NIGERIAN BREWERIES (-0.7%). The Banking index trailed, shedding 2.7% due to price depreciation in GUARANTY (-2.6%) and ZENITH (-2.6%) while the Insurance and Oil & Gas indices dipped 0.5% and 0.3% respectively following losses in LAWUNION (-9.1%) and OANDO (-2.2%). On the flip side, the Industrial Goods index emerged the lone gainer, up 1.1% driven by bargain hunting in DANGCEM (+9.7%).

Investor sentiment as measured by market breadth (advance/decline ratio) weakened to 0.4x from 0.8x recorded in the previous trading session as 12 stocks advanced against 27 decliners. MTNN (+10.0%), VITAFOAM (+9.8%) and DANGCEM (+9.7%) were the top performing stocks while LAWUNION (-9.1%), ETI (-8.5%) and JAPAULOIL (-8.3%) led laggards. Despite the weak investor sentiment, we expect the rally in MTNN and renewed interest in DANGCEM to continue to buoy market performance in the near term.

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