EQUITIES MARKET

The equities market sustained its bullish run as the All Share Index gained +1.5% today with investors buying up fundamentally justified stocks that were dumped due to pandemic fears. Market Capitalization improved by ₦174bn to ₦12.6trn improving the month-to-date return to 4.9%. Thus, year-to-date return moderated to -10.1%.

Activity levels strengthened as 426mn shares (+23.6%) valued at ₦4.1bn (-3.5%) were traded in 7,379 deals. FBNH (91.9mn), ZENITHBANK (63.4mn) and ACCESS (55.9mn) dominated trades by volume while GUARANTY (₦1.0bn), ZENITHBANK (₦994.8mn) and FBNH(₦448.1mn) led trades by value.

SECTOR PERFORMANCE

All sectors closed green today. Banking (+5.2%) was buoyed by GUARANTY (+9.3%), ZENITHBANK (+6.4%) & STERLNBANK (+5.6%). Insurance (+3.7%) rode on gains in CHIPLC (+10.0%), NEM (+9.1%) & WAPIC (+7.1%). Consumer Goods (+1.9%) revcovered as NB (+10.0%) and GUINNESS (+8.3%) strengthen. Oil & Gas (+1.3%) was lifted by ARDOVA (+9.8%) & OANDO (+6.3%). Industrial Goods (+0.6%) moved on gains in CUTIX (+8.1%), WAPCO (+4.2%) and DANGCEM (+0.6%).

INVESTORS SENTIMENT

Market breadth was favourable with 35 gainers and 4 losers. NB (+10.0%), CHIPLC (+10.0%) & ARDOVA (+9.8%) led the gainers while CILEASING (-6.0%), UACN (-3.5%) & UNIONDAC (-3.1%) led the losers.

MARKET INSIGHT AND OPPORTUNITIES

Given historical data, we observed that the bullish run which began in April has risen to its best level in the past 42 sessions. If the current bullish pace is maintained, the market will be restored to pre-pandemic sell-off levels in less than 2 weeks. However, we do not wipe out the possibility of bearish reversals as investors could take profit on stocks that have gained considerably.

Recall our Q1 economic note identified a range of fundamentally sound and liquid dividend-paying stocks. Benchmarking with today's prices, the portfolio has achieved a +14.3% return outperforming the All Share Index (+11.0%) led by gains in ZENITHBANK (+33.3%), GUARANTY (+23.4%) and UBA (+26.0%) assuming an equal weighted investment strategy. All portfolio constituents have gained since then justifying the value embedded in those tickers. Other tickers are ACCESS (+12.0%), DANGCEM (+10.9%), UCAP (+7.5%) & AFRIPRUD (+1.0%). OKOMU is the only stock that remain unchanged.

FOREIGN EXCHANGE MARKET

The Naira appreciated by -0.2% to ₦384.5/$ in the I&E FX Window today with trades within the ₦375 - ₦390 trading band. Total turnover amounted to $18.5mn.

MONEY MARKET

The Overnight lending and Open Buy Back rates fell to 4.3% and 3.5% respectively.

FIXED INCOME MARKET

Yields in the FGN bond space closed relatively flat at 5.9% Average OMO yields fell by 6bps to 10.03% while NTB yields remain silent.