Nigerian stocks start week positive as banking sector buoys benchmark index 0.33%

The Nigerian equities market closed Monday in the green as the bourse’s all-share-index rose 0.3 percent to 36,971.27 points on rallies in bank stocks. This just as Wall Street inched higher as bank stocks bounce back.

Monday’s performance thus indicates a positive start of the trading, just as year-to-date gain climbed to 37.6 percent.

In line with the performance, market capitalization increased by N42.4 billion to close at N12.7 trillion while activity level improved as volume and value traded expanded 34.7 percent and 21.8 percent to 215.0 million units and N2.7 billion respectively.

Market uptick can largely be attributed to ZENITH (+3.1%), DANGCEM (+0.2%) and GUARANTY (+0.2%).

Most sector indices expanded relative to Friday’s values with the banking index (+1.0%) at the forefront, owing to gains in ZENITH (+3.1%) and ETI (+1.3%).

The market also witnessed third qurter results trickling as UBA released its 9M:2017 result. The bank’s gross earnings improved 25.8 percent year-on-year to N333.9 bn from N265.5bn while PAT rose 23.0% Y-o-Y to N60.9bn from N49.5 billion.

The insurance index recorded a modest gain of 0.2 percent as MANSARD and AIICO appreciated 3.6 percent and 3.7 percent respectively. The oil & gas index however closed flat while the sole loser at the trading session was the consumer goods index, which declined 0.3 percent primarily to loss in NIGERIAN BREWERIES (-1.2%).

Investor sentiment while positive, was down from Friday’s as market breadth declined from 2.3x to 1.8x at market close.

The day’s top performers were CILEASING (+9.6%), FIDELITYBK (+5.0%) and NAHCO (5.0%) against the top losers – LEARNAFRCA (-5.0%), VITAFOAM (-4.3%) and CONTINSURE (-4.2%).

With Q3 earnings result start trickling in, analysts expect Monday’s positive performance to be sustained in subsequent sessions.

In the U.S. stocks crept up in late morning trading on Monday as surging treasury yields led to a rebound in bank stocks after three straight days of losses.

The benchmark 10-year treasury yields jumped after Federal Reserve Chair Janet Yellen reaffirmed the central bank’s view on gradual interest rate hike and a stronger-than-expected U.S. business conditions index.

JPMorgan and Bank of America rose about 1.5 percent, leading the gainers on the S&P financial index.

Reactions to bank results, which topped earnings estimates last week, were tepid on concerns about credit card losses and weak trading activity across the sector.

“The market is going higher despite all the news flow of geopolitical events,” said Jeff Zipper, managing director at the U.S. Bank Private Client Reserve in Palm Beach, Florida.

“There is optimism on earnings, economic indicators hopes of budget resolution.”

Of the S&P 500 companies, 55 are expected to report this week. Out of the 32 that have reported so far, 84.4 percent beat earnings expectations, according to Thomson Reuters data.