Stocks in most parts of the world, including Nigeria rose last week in spite of joy-pleasing economic data from listed firms and national economies. The Minister of Finance, Zainab Ahmed, said that the country is likely to be on recession any moment from now.
Last week the tide turned for the Nigerian Stock Exchange (NSE), as its All Share Index (ASI) gain 5.6 per cent week-on-week (w/w).
The equities market in Nigeria reversed last week’s loss following a bullish streak on all trading sessions despite mixed Q1 earnings releases. The All-Share index gained 5.6 per cent w/w to 25,204.75 points, due to buying interest in UNILEVER (+33.9 per cent), BUACEMENT (+23.4 per cent) and MOBIL (+20.9 per cent). Similarly, market capitalisation increased by N694.9 billion to N13.1 trillion while Year-to-Date (YTD) return settled at -6.1 per cent.
Activity level advanced as average volume and value traded increased 62.2 per cent and 62.6 per cent to 259.6 million units and N2.9 billion respectively. The most traded stocks by volume were ZENITH (172.2 million units), ACCESS (151.8 million units) and GUARANTY (104.9 million units) while ZENITH (N2.8 billion), GUARANTY (N2.5 billion) and DANGCEM (N1.8 billion) led by value.
Performance across sectors was impressive w/w as all indices under our coverage gained. The Industrial Goods and Banking indices gained the most, up 8.0 per cent and 7.2 per cent due to gains in DANGCEM (+4.5 per cent), BUACEMENT (+23.4 per cent), ETI (+12.0 per cent) and ZENITH (+9.7 per cent). The Oil & Gas (+4.9 per cent) and AFR-ICT (+2.8 per cent) indices trailed, following price appreciation in CONOIL (+9.9 per cent) and MTNN (+5.0 per cent). In the same vein, price upticks in WAPIC (+3.5 per cent), UNILEVER (+33.9 per cent) and PZ (+14.4 per cent) pulled the Insurance and Consumer Goods indices 2.0 per cent and 0.9 per cent higher respectively.
Investor sentiment as measured by market breadth (advance/decline ratio) strengthened to 6.8x from 1.0x last week as 54 stocks gained against eight that declined. UNILEVER (+33.9 per cent), BUACEMENT (+23.4 per cent) and MOBIL (+20.9 per cent) led the top gainers while ARBICO (-9.9 per cent), AFROMEDIA (-9.7 per cent) and ROYALEX (-9.1 per cent) led the decliners. In the coming week, we anticipate a mixed performance given the opportunities for bargain hunting.
On the global scene, performance in the developed markets was bullish with four of six indices under our coverage recording gains. In the US, the S&P 500 and NASDAQ indices rose 2.7 per cent and 3.1 per cent w/w as investors looked beyond negative unemployment data. In Europe, Germany’s XETRA DAX advanced 5.8 per cent w/w while France’s CAC 40 and UK’s FTSE All-Share expanded 3.9 per cent and 3.6 per cent w/w respectively as hopes of economic recovery boosted sentiment.
In Asia, Japan’s Nikkei 225 and Hong Kong’s Hang Seng indices closed flat w/w following worsening Sino-US relations over China’s controversial security bill against Hong Kong.
Performance across the BRICS markets mirrored that of the developed markets with three of five indices closing higher w/w. Russia’s RTS led the gainers, up 7.3 per cent w/w. Similarly, Brazil’s IBOVESPA and South Africa’s FTSE/JSE All-Share advanced 6.3 per cent and 1.0 per cent w/w respectively. Conversely, India’s BSE Sens and China’s Shanghai Composite closed the week flat.
In Africa, performance was bullish with five of six indices advancing w/w. Nigeria’s All-Share index gained the most, appreciating 5.3 per cent w/w. Morocco’s Casablanca MASI and Kenya’s NSE 20 indices trailed with gains of 3.0 per cent and 2.6 per cent w/w respectively. In the same vein, Ghana’s GSE Composite index and Mauritius’ SEMDEX indices trended north, rising 1.4 per cent and 0.6 per cent w/w respectively. Lastly, Egypt’s EGX 30 index declined 1.7 per cent w/w.
The Asian and Middle East markets under our coverage sustained a bullish performance following a gradual recovery in the oil market. Saudi Arabia’s Tadawul ASI and Turkey’s BIST 100 led gainers, up 5.0 per cent and 3.9 per cent respectively. Thailand’s SET and Qatar’s DSM 20 trailed, up 1.8 per cent and 1.6 per cent w/w. Lastly, UAE’s ADX General indices gained 1.1 per cent w/w.
Last week, the total number of COVID-19 cases rose to 5.1 million from 4.6 million reported the previous week while the death toll rose to 332,328 from 305,672 persons. The surge in case count has been fueled by the sustained rise in the number of infections in the United States (1,621,333), Russia (317,554) and Brazil (310,448). However, the slowing rate infection in West Europe has supported governments’ decision to gradually ease lockdowns in some states. Yet, the severity of the negative impact of the pandemic is still unfolding, given the weakness in latest macroeconomic data releases across major economies. In US, an additional 2.4 million people filed for unemployment benefits, taking the country’s 9-week total to more than 38.0 million. Similarly, Germany recorded a 25.4 per cent decline in tax revenue in the month of April. Meanwhile, Brent crude advanced to a six-week high at $34.75bbl (22/5/2020), on the back of a gradual pickup in demand due to the resumption of economic activities as well as tighter supply measures from the OPEC+ and US.
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