Afrinvest Weekly Update | Domestic Equities Round Up

An Extraction of the Afrinvest Weekly Economic & Market Report for May 24th, 2024

Photo Credit: NGX

Domestic Equities: Rate Hike Fuels Bearish Sentiment… ASI down 0.5% w/w

Reacting to the latest 150bps tightening of the benchmark policy, the local bourse closed bearish in each of the last three trading sessions, culminating in a 0.5% w/w decline in the NGX-ASI to 97,612.51 points. Accordingly, market capitalisation shed 0.5% w/w to ₦55.2tn while YTD trimmed to 30.5% (previously 31.0%). Meanwhile, activity level varied as average volume rose 20.6% w/w to 398.4m units, while average value declined 4.6% w/w to ₦8.1bn. The top traded stocks by volume were ACCESSCORP (281.8m units), GTCO (117.8m units) and UBA (113.9m units), while ACCESSCORP (₦4.8bn), GTCO ((₦4.5bn) and ZENITH (₦2.7bn) led in terms of value.
 
Across our coverage sectors, performance was bullish, as four indices gained while two lost. Leading the train, the AFR-ICT and Oil & Gas indices advanced 1.0% and 0.7% w/w respectively, following gains in MTNN (+2.9%), OANDO (+1.4%) and SEPLAT (+1.3%). Trailing, the Consumer and Industrial Goods indices inched higher by 0.3% and 0.2% w/w respectively due to price uptick in MCNICHOL (+10.0%), NESTLE (+9.8%), BERGER (+20.6%) and CUTIX (+10.2%). Conversely, selloffs on UBA (-12.1%), FBNH (-10.9%), MBENEFIT (-10.3%) and NEM (-9.5%) dragged the Banking and Insurance indices down 7.3% and 3.5% w/w, respectively.
 
Investor sentiment, as determined by market breadth, weakened to -0.4x (previously 0.3x) as 24 stocks advanced, 51 lost and 76 remained unchanged. Top gainers for the week were BERGER (+20.6%), REGALINS (+19.4%) and CUTIX (+10.2%), while DEAPCAP (-24.5%), FTNCOCOA (-16.7%) and TRANSCORP (-12.1%) led the losers. Next week, we expect the bearish sentiment to persist owing to the currently pressured risk adjusted upside on equities assets.