Unilever, Forte Oil, 7Up lift Nigeria’s equity market as benchmark index gains 0.12%

The positive sentiments that dominated the Nigerian equities market last week continued Monday, with fast moving consumer goods (FMCG) stocks rallying to edge benchmark index north by 0.12 percent.

The Nigerian Stock Exchange all-share index closed higher at 33,301.43 points from 33,261.66 it stood Friday, helping to nudge year-to-date (YTD) to 23.9 percent.

Monday’s performance was largely driven by strengthened sentiment towards consumer goods stocks – NIGERIAN BREWERIES (+2.2%), UNILEVER (+10.2%), 7UP (+6.4%) and FLOURMILL (+5.0%) – as well as market heavyweight, DANGCEM (+0.1%).

Consequently, stock prices accumulated N13.7 billion in value as market capitalization increased to N11.5 trillion.

However, activity level was mixed as volume traded rose 3.6 percent to 322.8 million units while value of stocks traded declined 16.4 percent to N2.7 billion.

Performance across sectors was mixed as three of five indices trended southwards. The insurance index declined the most, down 0.6 percent due to price depreciation in AIICO (-4.9%) and CONTINSURE (-4.4%), while the banking and oil & gas indices dipped 0.5 percent apiece on account of profit taking in UBA (-2.2%) and negative reaction to media reports on OANDO (-9.5%).

The media had reported late last week of an impending investigation on OANDO for alleged financial malpractices by the Securities and Exchange Commission (SEC), the market regulator, which the company has denied.

On the flip side, the consumer goods index rose 1.3% on the back of a broad-based rally in FMCGs stocks especially UNILEVER’s (+10.2%) following an impressive half year results released last Friday.

The company grew revenue by 39.6 percent, year-on-year to N45.1 billion, while profit after tax (PAT) surged 236.4 percent to N33.7 billion in the review period, largely driven by high mark up on sales following increase in product prices effected at the start of the year.

Lastly, the industrial goods index inched three basis points (bps) higher as a result of a marginal gain in DANGCEM (+0.1%).

OKOMUOIL leads the list of active stocks that recorded impressive volume spike at the end of Monday’s session.
Market breadth, a gauge of investor sentiment, declined to 0.8x (from 1.9x recorded on Friday) as 22 stocks advanced against 26 that declined.

The best performing stocks were UNILEVER (+10.2%), FORTE (+7.7%) and 7UP (+6.4%) while OANDO (-9.5%), NASCON (-4.9%) and SKYEBANK (-4.9%) were the worst performers.

The decline in market breath, according to analysts, is a sign that sentiments are waning towards the equities market.

“Whilst the decline in market breadth is suggestive of waning sentiment towards equities, we expect performance to remain bullish in the short to medium term as expectations of half year 2017 corporate earnings – a major driver of performance at this time – remain positive,” say analysts at Afrinvest.