Nigerian Bourse Gain by 1.11% w/w, as Mixed Sentiment Persist

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GLOBAL MARKET

Mixed sentiment reign on global stocks, amid rising U.S inflation rate and low treasury bond yield

This week, sell interest dominated in seven(7) of the fourteen (14) stock markets under our coverage, as U.S Treasury bond yield nears 3-month low and some euro area bond yield followed suit.

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Also, the U.S Labour Department reported that its Consumer Price Index (CPI) rose by 0.6% last month after edging 0.9% in April. The uptick in consumer prices in May lifted the year-on-year increase in the CPI to 5% from 4.2% in April, the highest rate since the 1980s. Consequently, all the broadest market indices in the U.S under our coverage, which includes Nasdaq Composite Index and S&P 500 Index gained 1.83% w/w, and 0.41% respectively, save for DJIA Index that lost 0.80% w/w. Also, the Federal Reserve is set to meet next week, with expectations that the higher inflation rate could lead to early monetary policy modification.

The major markets around Europe, France CAC 40, and UK FTSE 100 Index grew by 1.30% w/w, and 0.92% w/w respectively, except German DAX that remained unchanged, as the European Central Bank (ECB) maintained its dovish commitment to stick with its elevated tempo of the bond-buying program.

Furthermore, mixed sentiment prevailed in the major market indices in Asia under our coverage, as China Shanghai Composite and Hong-Kong HANG SENG both receded by 0.06%w/w, 0.26%w/w respectively, save for the India S&P BSE Index and Japan Nikkei 225 that gained 0.72%w/w and 0.02% respectively.

Also, all of the four indices in the emerging market indices under our coverage, Brazil’s BOVESPA, South-Africa FTSE/JSE Index, Argentina MERVAL, and Egypt EGX 30  dropped 0.53%w/w, 0.15%w/w, 0.15%w/w, and 0.76%w/w respectively.

We expect to see a modest recovery in the next trading week in reaction to the U.S Federal Reserve meeting and falling U.S treasury bond yield.

EQUITY MARKET

 Nigerian Bourse Gain by 1.11% w/w, as Mixed Sentiment Persist

Transaction on the Nigerian Equity Market closed w/w on a positive note, as bullish performance dominated three of the five trading sessions. This was due to investors’ sustained bargain hunting for recently depreciated bellwether stocks. Consequently, the Market Indicators (NGX-ASI and NGX Market Capitalization) rose by 1.11% w/w to close for this week at 39,156.28 absolute points and N20.41 trillion compared to 38,726.10 absolute points and N20.18 trillion last Friday. This nominally translated to a week-on-week gain of N224.24 billion in Market Capitalization value.

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Four of the five major sectors closed positively, led by Industrial Goods Sector, Oil and Gas Sector, Consumer Goods Sector and Banking Sector with percentages of (+2.37%), (+1.37%), (+1.06), and (0.89%) respectively while the Insurance Sector closed negatively with a percentage of (-4.12%).

 

CUTIX emerged best performing stock this week with a w/w gain of +23.56%, while CWG shed -26.14% to emerge as the top loser.

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A total turnover of 1.06 billion shares worth N12.83 billion naira in 17,847 deals was traded this week by investors on the floor of the Nigerian Stock Exchange as against a total of 1.08 billion shares worth N9.55 billion naira in 17,930 deals last week.

Thirty-five (35) equities appreciated during the week, higher than Thirty-three (33) equities in the previous week. Thirty-six (36) equities depreciated, higher than Thirty-three (33) equities in the previous week, while ninety (90) equities remained unchanged lower than ninety-five (95) equities recorded in the previous week.

Outlook

We expect mixed sentiment to persist in the coming week, the bulls would take advantage of the low prices of the recently depreciated stocks while the bears might take profits from recently appreciated stocks.

FOREIGN EXCHANGE MARKET

At the I&E FX windows, the USD closed the week at ₦410.80/USD against ₦410.75/USD from last Friday’s position. In the meantime, the foreign reserves this week weakened by $212.37 million to the level of $34.09 billion (10/06/2021) from $34.22 billion (01/06/2021), however, the Brent Crude oil price appreciated by $1.02 pbl w/w to $72.91 pbl (10/06/2021) as against $71.89 (04/06/2021) pbl.

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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