Weekly Market Update NSEASI Up 291.64 Points W-o-W NASCON Declares NGN5.34bn PAT
NSEASI Up 291.64 Points W-o-W NASCON Declares NGN5.34bn PAT During the week, stronger positive sentiments were witnessed in a number of sectors, with the Oil and Gas sector taking the lead. Investors were bearish towards the financial services space, pulling both the NSE Banking and NSE Insurance sector indices southwards by 108bps and 74bps respectively. At the end of the week, the positive weekly market breadth of 1.08x caused the total market cap to advance by 0.68% to NGN15.51trillion while the Year-to-Date (Y-t-D) return on the bourse settled at 12.88%. In the coming week, we expect to witness price shedding on stocks like UNILEVER and PRESCO which have gained significantly while bargain hunters trade on counters like MOBIL and FO which witnessed strong selling pressures. Weekly Sector Analysis Oil and Gas Sector: Index s W-o-W Gain Bolstered by SEPLAT The oil and Gas sector bulls held on tightly to JAPAULOIL +53.97% during the week, placing the ticker top on the weekly gainers list. Likewise, strong buying pressures observed on the sectors bellwether, SEPLAT +12.13%, increased value for shareholders in the form of capital appreciation. At the other end of the spectrum, there was an increase in negative momentum on FO -2.00%, MOBIL -1.13% and TOTAL -0.21%. The NSE Oil and Gas index (NSEOILG5) closed north by 5.58% W-o-W while the sector breadth closed positive as indicated by the arms index. Accordingly, the Year-to-Date (Y-t-D) return on the NSEOILG5 index settled at 13.14%. Given that the Heikin Ashi candlesticks and MACD both suggest a decline in positive momentum on SEPLAT, we expect the sector to be weighed down by the counter in the coming week. However, we expect counters like MOBIL and FO to witness bargain hunting. Industrial Goods Sector: WAPCO +3.92% Tops the Gainers List The NSEIND index advanced by 1.70% from the previous week. The sector breadth closed positive on the back of the weekly gain recorded on WAPCO +3.92%. Mixed sentiments were witnessed on stocks like DANGCEM, CUTIX and CAP which traded flat W- o-w at NGN265, NGN2.45 and NGN38.00 respectively. In addition, the highest selling pressure in the week was recorded on CCNN -3.27%. In line with this, the Year-to-Date (Y-t-D) return on the NSEIND index settled at 19.23%. In the coming week, we expect to witness bargain hunting on stocks which witnessed significant price reduction. Consumer Goods Sector: NESTLE Sheds 1.36% Week-on-Week The bulls upstaged the bears in this space during the week, causing the NSEFBT10 index to incline northwards by 1.70% in the week. The sector breadth closed positive at 1.67x with gainers and losers in the ratio 10:6. Hence, the Year-to-Date return on the index advanced to 2.34% at the sound of the closing bell this week.
On the last trading session this week, NASCON +0.42 released its FY2017 scorecard which revealed that the company grew its revenue and PAT by +47.96% and +121.25%. However, the stock shed 2.65% today, following the release of the impressive results. We attribute this to early bird investors taking position on the counter ahead of the release as the stock had witnessed strong positive sentiments in the past weeks. UNILEVER +20.66%, CADBURY +18.71%, and FLOURMILL +12.05%, topped the advancers chart while DUNLOP -5.26%, HONYFLOUR -2.21% and NESTLE -1.36% were the top laggards in the sector this week. In the coming week, we expect to witness more profit-taking on UNILEVER which shed 3.72% in the last trading session. Banking Sector: STERLNBANK -6.25% Tops the Laggards Chart The banking sector was flocked by profit-takers which saw the NSE Banking index dip 1.08% W-o- W. A number of tier-2 banking stocks like STERLNBANK -6.25%, SKYEBANK -4.12%, WEMABANK - 3.85% and UNITYBNK -2.82% witnessed price shedding during the week. As a result, the Y-t-D return on the NSEBNK10 declined to 19.33%. We note that the current trend in the sector is not unrelated to the Dividend Restriction circular recently released by the CBN as results are expected to be released soon. As we await the release of FY2017 results, we expect investors to lean towards fundamentally justified stocks that will declare good dividends based on the NPL and CAR dividend pay-out restrictions. Agricultural Sector: PRESCO Closes at NGN74.35 The sector breadth closed negative at 0.50x, given the week-on-week price shedding witnessed on FTNCOCOA -13.51% and LIVESTOCK -6.36%. However, the sector s bulls were drawn to PRESCO which advanced by 2.20% to close at NGN74.35 at the end of the week. Mixed sentiments witnessed on OKOMUOIL caused the counter s price to be maintained at the previous week s close of NGN72.00. Given that the MACD and candlesticks suggest a decline in positive momentum, we expect to witness some degree of profit-taking on PRESCO in the coming week.
NSE Market Indices Return Index Daily Return (%) Weekly Return (%) Year to Date Return (%) NSE All Share Index 0.17% 0.68% 12.88% NSE Banking Sector Index -0.87% -1.08% 19.33% NSE Industrial Goods Index 1.90% 1.70% 19.23% NSE Consumer Goods Index 0.56% 1.70% 2.34% NSE Oil & Gas Index -0.17% 5.58% 13.14% NSE Insurance Index -1.07% -0.74% 12.88% 60.00% 50.00% 40.00% Weekly Market Movers 30.00% 20.00% 10.00% 0.00% SEPLAT AGLEVENT ROYALEX ABCTRANS CADBURY CAVERTON UNILEVER LASACO HMARKINS JAPAULOIL 0.00% -5.00% -10.00% REGALINS AFRINSURE FTNCOCOA SOVRENINS CILEASING UCAP -9.74% -9.33% WAPIC -7.69% MULTIVERSE LIVESTOCK -6.36% STERLNBANK -15.00% -13.89% -13.16% -20.00% -25.00% -30.00% -27.08%
Definition of Terms Weekly Equities Market Review Moving Average Convergence Divergence (MACD): It shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. (Source: Investopedia) Relative Strength Index (RSI): It is a technical indicator used in the analysis of financial markets. It is intended to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading period. The indicator should not be confused with relative strength. (Source: Wikipedia) Bollinger Bands: Bollinger Bands are a volatility indicator similar to the Keltner channel. Bollinger Bands consist of an N-period moving average (MA) an upper band at K times an N-period standard deviation above the moving average (MA + Kσ) a lower band at K times an N-period standard deviation below the moving average (MA Kσ). (Source: Wikipedia) Candle sticks: A candlestick chart (also called Japanese candlestick chart) is a style of financial chart used to describe price movements of a security, derivative, or currency. Each "candlestick" typically shows one day; so for example a one-month chart may show the 20 trading days as 20 "candlesticks". (Source: Wikipedia).
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