Bulls Maintains Dominance In Local Equities Market, Investors Gains N1.33tn

Bulls dominated proceedings in the local equities market last week with bargain hunting across most tickers. The market opened the week strong with a 175 bps gain which was followed by impressive gains in all the remaining trading days of the week.

Consequently, the All-Share Index (ASI) closed the week with a 7.46% gain WoW to close at 38,804.75 with market capitalization adding N1.33tn  to settle at N19.24tn. In Summary, the year-to-date (YtD) performance improves to  +37.12%.

Market breadth, a measure of Investors’ sentiment advanced from 0.28x to 3.12x as 53 stocks advanced while 17 stocks declined last week. FTNCOCOA(+40.91%), JAPAULGOLD(+36.00) and AIRTEL(+21.00%) were the top market gainers while MANSARD(-60.00%), NEM(-47.23%) and OMATEK(-16.23%)  top the losers chart.

Market activity level was negative as both the volume and value of transaction traded declined by 16.56% and 15.91% in that order.  Trading in JAIZBANK, FBNH and NIGERINS accounted for 761.86 million shares worth N1.46 billion in 1,395 deals, contributing 40.25% and 8.32% to the total equity turnover volume and value respectively.

Outlook for the week: local equities market

We expect to see some mixed activity this week as some investors hunt for bargains and others take profits with new development in the global economy and local fixed income yield influencing the decision.

READ: Local Equities Market Plunges by 3.51% As Bonny Light Crashes To USD21.41

NIGERIA FIXED INCOME MARKET

The bears maintained dominance in the local bond market last week as investors took profit on some short and long-dated maturities. Average benchmark yields climbed by 65bps to 5.56% buoyed by sell-off at the short, mid and long end of the curve. Notably, Yield on the FGN-JUL-2030 advanced by 18.59% with that of APR-2023 also advancing by 42.64%

At the  FGN Bond auction mid-week, The DMO offered N60 billion distributed equally between the MAR-2035 and JUL-2045 instruments. Demand was buoyant with N134.06bn subscription indicating a bid/cover ratio of 4.5x. With demand for higher yield from investors, DMO  allotted only N30bn (N20bn of MAR-2035 and N10bn for JUL-2045. Stop rate consequently closed at 6.95% and 7.00% for MAR-2013 and JUL-2045 respectively.

Local Equities Market: Outlook for the week

We expect an extension of the bearish sentiment to the new week with market trading on a quiet note during the week.

GLOBAL MARKET

The US S&P 500 and Dow Jones indices both advanced by 1.25% and 0.44%  following FDA approval of Moderna COVID-19 vaccine. Other global stocks also closed positive safe UK FTSE  and JAPN NIKKEI with concerns about rising numbers of coronavirus cases and uncertainty surrounding a post-Brexit trade deal. Notably,  German DAX and French CAC advanced by 3.94% and 0.37%. conversely, UK FTSE and japan NIKKEI both waned by 0.27% and 0.13%.

Outlook for the week

We expect UK post-Brexit conclusion and new development surrounding the vaccines to influence market performance across Europe and America together with progress on the US stimulus Measures.