High priced stocks help Nigerian bourse index close positive despite dip in turnover

Sentiments at the Nigeria’s equities market remained positive Monday as the bourse index appreciated 0.48 percent to close at 32,614.60 basis
points as against 0.32 percent appreciation recorded Friday.

The rise in index was largely due to price gains recorded by high valued stocks led by banking giants, Zenith, Access and UBA as well as turnover by Guaranty, despite dip in market turnover from 26.03 percent recorded in previous trading to sub 14.27 percent.

The all-share index specifically rose 0.5 percent against the backdrop of strong bargain hunting in banking stocks such as Zenith (+3.5%), UBA (+4.9%), Access (+4.9%) and ETI (+3.9%). To this end, market year-to-date (YTD) returns stood at 21.36 percent at close of trading.

Accordingly, stock prices gained N53.6 billion as market capitalization increased to N11.2 trillion. However, activity in the market was relatively weak, as volume and value traded dipped 14.3 percent and 18.1 percent to 182.1 million units and N2.0 billion respectively.

Performance across sectors was mixed as three of five indices closed green.

The banking index (3.0%) appreciated the most on account of gains in ZENITH (+3.5%) and UBA (+4.9%). The oil & gas index followed, up 0.7 percent due to positive sentiment towards OANDO (+4.8%), while the industrial goods index added 0.3 percent as a result of price appreciation in MEYER (+4.3%).

On the flip side, the consumer goods and insurance indices declined 0.7 percent and 0.3 percent respectively on the back of selloffs in NIGERIAN BREWERIES (-0.6%) and MANSARD (-4.8%).

Market breadth, a gauge of market sentiment, closed flat at 1.6x Monday as 24 stocks gained while 15 declined. The best performing stocks today were Flourmill (+9.7%), CILEASING (+5.0%) and REDSTAREX (+5.0%) while UBN (-8.8%), UPL (-5.0%) and SKYEBANK (-5.0%) were the worst performers.

Guaranty, FCMB and Zenith were the most active to boost market turnover despite closing negative as volume moved down by -14.27% as against +26.03% uptick recorded in the previous session. Maybaker leads the list of active stocks that recorded impressive volume spike at the end of Monday’s session.

In the NASD OTC exchange, nine counters traded with total volume and value of transactions closing at 40,547 units and N4.3m respectively. CSCS (-9.7%) and WAMCO (-6.0%) closed in the red.

Analysts at Afrinvest expect performance to be driven by earnings fundamentals in the near term as investors will be looking out for half
year corporate earnings due to be released in July/August.

“Outlook for half year earnings remains decidedly positive; hence, we expect some investors to start taking positions in trading sessions ahead,” they noted.

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