Gains in bellwethers sustain investors’ sentiment as NGX-ASI grew 1.36%w/w

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GLOBAL MARKET

Global Stocks continues sell-off, amidst report of a strong U.S economic growth

This week, sell-interest dominated in nine (9) of the fourteen (14) stock markets under our coverage, amid the strong U.S Economic Data showing the U.S real gross domestic product (GDP) increased at an annualized rate of 6.4% in the first quarter of 2021 on the back government money.

However, two of the three broadest market indices in the U.S, which includes the DJIA Index, the Nasdaq Composite Index declined by 0.50% and 0.39%w/w respectively, save for S&P 500 that gained 0.02%w/w, as the U.S Federal Reserve left interest rate and its bond-buying program unchanged in the recent Federal Open Market Committee (FOMC) Meeting.

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However, positive sentiment reign in the major market around Europe, as UK FTSE 100, France CAC 40 gained 0.45%w/w and 0.18%w/w respectively, while the Germany DAX  lost 0.94%w/w respectively, amidst a report by the European Central Bank (ECB) that Eurozone GDP fell by 0.6% in the first quarter of 2021.

Nevertheless, mixed sentiment prevailed across the major market in Asia, as Hong-Kong HANG SENG Index, China Shanghai Composite Index, and Japan Nikkie 225 that lost 1.22%w/w, 0.79%w/w, and 0.72%w/w respectively, save for India S&P SBE Index that gained 1.89%w/w, amid reports of a resurgence of Covid-19 cases in the region.

Furthermore, three of the four emerging market indices under our coverage, Brazil’s BOVESPA, Egypt EGX30, and South-Africa FTSE/JSE Index all lost 1.36%w/w, 1.18%w/w, and 0.53%w/w  respectively, except for Argentina MERVAL Index gained 3.55%w/w.

We expect to see some modest recovery in the next trading week in reaction to the report of the strong U.S Economic Data, which may be the sign that world economic recovery is back on track.

EQUITY MARKET

Gains in bellwethers sustain investors’ sentiment as NGX-ASI grew 1.36%w/w

Transactions on the Nigerian Equity Market closed w/w on a positive trajectory, as bullish dominated four out of the five trading sessions. This we believe was triggered by investors’ buy-interest in bellwether such as MTNN and DANGCEM plan to renew the share buyback programme. Consequently, the Market Indicators (NSE-ASI and NSE Market Capitalization) increased by 1.36% w/w to close for this week at 39,834.42 absolute points and N20.85 trillion compared to 39,301.82 absolute points and N20.57 trillion last Friday. This nominally translates to a week-on-week gain of N278.73 billion in Market Capitalization value.

Three of the five major sectors closed positively, led by the Insurance Sector (+3.80%), Industrial Sector (+2.86%), and Oil and Gas Sector (+1.30%), while the Banking and Consumer Goods Sector closed negatively with a percentage decrease of  -2.09% and -0.02% respectively.

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ROYALEX emerged best performing stock this week with a w/w gain of +47.22%, while HONYFLOUR shed -17.14% to emerge as the top loser.

A total turnover of 1.44 billion shares worth N10.88 billion in 19,614 deals was traded this week by investors on the floor of the Nigerian Stock Exchange as against a total of 1.60 billion shares worth N42.14 billion in 19,507 deals.

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Thirty-six (36) equities appreciated during the week, lower than thirty-nine (39) equities in the previous week. Forty-one (41) equities depreciated, higher than twenty-four (24) in the previous week, while eighty-five (85) remained unchanged, lower than ninety-99 (99) equities recorded in the previous week.

Outlook

We expect mixed sentiment in the coming week, amidst profit-taking from the recent price appreciation, however, the decline in the banking sector could trigger buy sentiment despite mixed Q1’2021 performance.

FOREIGN EXCHANGE MARKET

The Naira this week remained unchanged against the USD at the official window to close the week at ₦379/USD as against the previous week, while at the I&E FX windows, the USD closed the week at ₦410.00/USD unchanged from last Friday position.
In the meantime, the foreign reserves this week declined by $213.86 million from the level of $35.12 billion (22/04/2021) to $34.91 billion (29/04/2021), as the Brent Crude oil price also increased by $1.15pbl w/w from $66.11pbl last Friday to $67.26pbl.

Source: GTI Research

GTI

GTI is a leading Nigerian Investment Banking group with proven expertise in Financial advisory, Securities Dealing (Fixed Income and Equities), Asset management and Deal Origination. We have strong capacity in financial service delivery.

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