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NSE ASI ekes out gains

What shaped the market today?

§The Nigerian equity market closed in the green for the third consecutive session as late gains in top banking shares lifted the ASI. On the global scene, whilst Asian markets traded mixed, European markets closed lower as investors anticipate the minutes of the U.S Fed meeting for hints on the timing of a potential interest rate hike. U.S futures were relatively unchanged.

§The Financial Services sector (+74bps) added most points to the ASI value following last minute gains in GUARANTY (+167bps, after reporting a 45% y/y increase in H1’16 PAT) and advances in ETI (+871bps). The Oil & Gas (+17bps) and Industrial Goods (+11bps) sectors also closed the session in the green on the back of respective advances in TOTAL (+121bps) and WAPCO (+55bps). However, the Consumer Goods sector (-3bps) was down mildly as marginal gains in NB (+11bps) and NESTLE (+12bps) were outweighed by declines in INTBREW (-500bps) and HONYFLOUR (-149bps), coupled with investor reaction to PZ (-28bps) FY’16 earnings (PAT down 53% y/y).

• Market breadth turned positive with 23 advances and 19 declines.

What will shape the nexttrading session?

• §Today’s trading pattern was almost a replica of the previous session as the market trended south through the trading hours after a bullish open. The ASI was in fact already set for a negative close before the late minute gains in GUARANTY lifted the index. That said, we think the ASI might extend gains in the next session.