Capital market:GTBank tops transactions as equities market exits danger zone

Activities at the Nigerian Stock Exchange (NSE) last week were mostly buoyed by Guaranty TrustBank (GTBank) Plc as the stock market dragged itself out the woods. The bank led the activity chart in terms of volume and value traded.
The result is that the market gained N316.2 billion last week.
The top traded stocks by volume were GUARANTY (219.0 million units), ACCESS (115.0 million units) and FBNH (92.9 million units).

in terms of value, GUARANTY transactions were worth N5.8 billion, while ZENITH (N1.2 billion) and ACCESS (N794.4 million).
Gains were recorded on three of five trading days during the week. For the first two trading days of the week, the market recorded 0.2 per cent loss apiece due to price depreciation in NESTLE, STANBIC, CCNN and DANGCEM.
Meanwhile, gains in NESTLE, SEPLAT and GUARANTY buoyed the market on Wednesday and Thursday while gains in AIRTELAFRI and ETI moved the market higher on Friday.

Across sectors, five indices under our coverage gained Week-on-Week (W-o-W). Price appreciation in SEPLAT (+15.7 percent), FORTE (+14.1 per cent), FBNH (+24.1 per cent) and ETI (+11.9 per cent) moved the Oil & Gas and Banking indices up 7.2 per cent and 5.1 per cent W-o-W respectively. Also, the AFR-ICT and Consumer Goods indices gained 3.7 per cent and 0.6 per cent W-o-W respectively following buying interest in MTNN (+0.7 per cent) and DANGSUGAR (+9.7 per cent).
The Industrial Goods index advanced 0.5 per cent due to gains in WAPCO (+1.4 per cent). Conversely, the Insurance index was down 1.5 per cent W-o-W on the back of sell-offs in CONTINSURE (-8.0 per cent) and MBENEFIT (-4.8 per cent).

Investor sentiment strengthened as market breadth (advance/decline ratio) inched higher to 2.0x as 38 tickers advanced against 19 that declined. UAC-PROP (+51.5 per cent), FBNH (+24.1 per cent) and SEPLAT (+15.7 per cent) led the advancers while THOMASWY (-9.5 per cent), CONTINSURE (-8.0 per cent) and OANDO (-7.3 per cent) led losers. We expect bearish sentiment to resume next week, although there is room for gains in fundamentally sound stocks through bargain hunting.

The domestic bourse trended upward as the ASI rose 2.3 per cent W-o-W to 27,779.00 points while Year-to-date (YTD) loss eased to -11.6 per cent. Similarly, investors gained N316.2 billion as market capitalisation strengthened to N13.5 trillion. However, activity level was mixed as average volume gained 4.2 per cent to 229.4 million units while value pared 17.6 per cent to N2.8 billion respectively.
The bullish run in developed markets continued last week based relaxed action between China and the United States of America.
Other decisions by various bodies in the globe further helped to calm the global markets.

Optimism about calming trade tensions between the US and China strengthened last week as China exempted some U.S. goods from the 25.0 per cent extra tariffs enacted in 2018, providing a reprieve of one year from September 17, 2019. The US reciprocated the gesture by suspending the proposed additional 5.0% tariff on Chinese goods worth $250 billion by two weeks from October 1, 2019 to allow for negotiations.

The de-escalation of tensions between both countries is positive but not unusual, the lack of flexibility and speed during negotiations has been the drawback to a trade deal. In Europe, the European Central Bank cut rate by 10bps to -0.5 per cent and resumes quantitative easing program from November, 2019 through monthly asset purchases of €20.0bn until when unnecessary. In the UK, Prime Minister Boris Johnson suspended parliament for a month, raising the risk of a “no-deal Brexit” as Brexit deadline is on October 30, 2019.
The bullish run in the developed markets continued this week as all indices under our coverage ended in the green. In the US, S&P 500 and NASDAQ indices gained 1.2 per cent and 1.1 per cent W-o-W respectively on softening trade tensions. The France’s CAC 40 and Germany’s XETRA DAX indices were up 1.0 per cent and 2.2 per cent W-o-W respectively following ECB’s rate cut while the UK’s FTSE All Share rose 1.1 per cent W-o-W despite increasing uncertainty around Brexit. Likewise, Hong Kong’s Hang Seng index advanced 2.5 per cent while Japan’s Nikkei 225 rose 3.7 per cent W-o-W.

The bullish streak extended to the BRICS market as all indices under our coverage advanced W-o-W. South Africa’s FTSE/JSE index led the gainers, advancing 2.8% W-o-W while Russia’s RTS and Brazil’s Ibovespa indices trailed closely following a 1.6% and 1.5 per cent W-o-W gain respectively. Similarly, China’s Shanghai Composite index rose 1.1 per cent W-o-W as trade tensions partially de-escalated and the India’s BSE Sens index also appreciated 1.1 per cent W-o-W due to renewed economic stimulus.

Performance was mixed for indices under our coverage in the African market. Egypt’s EGX 30 index sustained gains as it inched higher by 1.2 per cent W-o-W. Similarly, Nigeria’s ASI and Kenya’s NSE 20 indices advanced 2.3 per cent and 0.9 per cent W-o-W respectively. Conversely, Mauritius’ SEMDEX index led the decliners, shedding 1.0 per cent W-o-W. The Ghana’s GSE Composite and Morocco’s Casablanca MASI indices also lost 0.2 per cent and 0.3 per cent respectively during the week.

In the Asian and Middle East market, three of five indices under our coverage closed in the green territory. Qatar’s DSM 220 index further dipped 2.0 per cent W-o-W while Turkey’s BIST 100 index also sustained its bearish performance as it waned 3.9 per cent W-o-W. Saudi Arabia’s Tadawul ASI appreciated the most by 2.8 per cent while Thailand’s SET and UAE’s ADX General indices were up 0.5 per cent and 0.4 per cent respectively W-o-W.

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