NSE ASI down marginally at week open
What shaped the market today?
· Amidst varied market reaction to a deluge of mixed earnings releases and announcement, the Nigerian bourse opened the week on a slightly negative note, with the NSE ASI shedding 8bps from last close. On the global front, European markets closed in positive territory after PMI data showed economic activity in the Eurozone hit a year high in October whilst Asian markets traded mixed amidst a number of positive economic data releases from Japan. U.S markets opened higher following a raft of better-than-expected earnings releases.
· The Oil & Gas sector (+37bps) weighed most on the NSE ASI as OANDO (-327bps) and MOBIL (-235bps) reversed previous session’s gains. The Financial Services sector (-25bps) also closed in negative territory amidst market reaction to series of corporate announcement - ZENITHBANK rose 169bps following its 9M’16 earnings release (PAT up 20%), WEMABANK dipped 615bps amidst a 2% y/y decline in 9M’16 PAT, ETI shed 168bps following news of potential conversion of Preference shares to Common equity. The Consumer Goods sector closed flat after gains in Brewers - NB (+34bps) and GUINNESS (+63bps) were negated by decline in PZ (-475bps), and as investors reacted further to the 9M’16 earnings release (LAT: ₦842 million) of CADBURY (-952bps). However, the Industrial Goods sector (+37bps) closed higher amidst muted market reaction to CAP 9M’16 earnings release (PAT down 12% y/y) and as WAPCO gained 114bps.
· Market breadth remained negative with 12 advances and 23 declines.
What will shape the next trading session?
· As expected, today’s market trade performance mirrors the trend seen in previous sessions with ZENITHBANK accounting for over a third of market turnover following release of 9M’16 earnings. Whilst we expect this trend to persist in coming sessions, we also think investor appeal for banking stocks could improve as ZENITHBANK’s earnings (which beat market expectations) could serve as a pointer to what to expect other big banks.
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