Gains in Zenith, UBA, ETI lift Nigerian equities index 0.06% as bargain hunting dictates market performance

The Nigerian equities market recorded positive performance Monday, the first trading session of the week, with all-share index gaining 0.06 percent to close at 36,484.30 points on account of gains in large banking cap stocks. This just as year-to-date gain strengthens to 35.8 percent.

In the same vein, market capitalization grew by N7.6 billion to N12.6 trillion.

Market performance was largely influenced by gains in ZENITH (+1.1%) UBA (+2.5%) and ETI (+2.6%). However, activity level declined as volume and value traded fell 30.3 percent and 39.4 percent respectively to 175.0 million units and N1.8 billion.

Sector performance was mixed with the industrial goods index emerging the biggest loser, down 1.5 percent largely due to losses in WAPCO (-3.9%). The insurance index followed suit, down 0.09 percent on the back of losses in MANSARD (-1.9%) and NEM (-3.1%) while the consumer goods index closed flat.

On the flip side, the banking and the oil & gas indices gained marginally, up 0.07 percent and 0.01 percent on the back of gains in ZENITH (+1.1%), UBA (+2.5%), FORTE (+7.1%) and TOTAL (+3.1%).

Investor sentiment weakened as market breadth dropped to 0.8x (from 1.0x recorded on Friday) as 16 stocks advanced against 21 decliners. DANGFLOUR (+10.2%) FORTE (+7.1%) and HONYFLOUR (+5.0) were the best-performing stocks while MORISON (-4.8%) LIVESTOCK (-4.5%) and WAPCO (-3.8%) were the worst performers.

At the global level, Spanish stocks rise as poll shows faltering support for Catalan nationalists just as wider European bourses make neutral start and Asia retreat.

“Markets seem largely unfazed by the stand-off between Madrid and a region that accounts for 20 percent of the Spanish economy,” says Holger Schmieding, chief economist at Berenberg.

“Are we underestimating the Catalan risk? Probably not. While the political risks for Spain are noteworthy, the economic impact will probably remain temporary and muted.”

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The Ibex 35 was up 1.8 percent, with notable gains for Catalan-based banks. CaixaBank’s stock was up 2.5 percent, as is Banco Sabadell. However, wider European equities look lackluster with investors reluctant to extend their exposure to risk after a series of notable highs.

The international Euro Stoxx 600 came down 0.1 percent, with London’s FTSE 100 down 0.3 percent and Frankfurt’s Xetra Dax up 0.1 percent.

At the commodities market, oil prices stood at highest level since July 2015, over $60. Brent crude has touched its highest level in more than two years and is holding the $60 a barrel mark for the first time since mid-2015.

Confirmation that Saudi Arabia is prepared to back the extension of supply cuts have helped the international oil marker hold just above $60 for the first time since 2015.

Brent was up 0.2 percent at $60.57, while West Texas Intermediate, the US benchmark, was up 0.2 percent at $54.01.

On the currency front, dollar rallies against its Australian and NZ counterparts on outlook for US rates. The dollar index was down 0.3 percent at 94.680. It will be tracking expectations this week that President Donald Trump will make his nomination for the next head of the Federal Reserve.