In line with our expectations, it appears players in the domestic equities market now have reasons to smile to their banks in FY 2020, as the year to date performance of the local bourse turned positive amid a 2.52% week-on-week rise in its All Share Index.
The positive momentum was chiefly driven
by gains in the share prices of bellwethers such as ZENITHBANK, GUARANTY and WAPCO as their financial performance in the first half of 2020 were impressive.
Notably, all the sub-sector gauges tracked closed higher except for the NSE
Consumer Good index which moderated by 0.75% to 455.27 points.
The NSE Banking index appreciated the most by 4.24% to 315.33 points, followed by the NSE Industrial, NSE Oil/Gas and the NSE Insurance indices which rose by 3.25%, 1.79% and 0.64% to 1,199.19 points, 195.43 points and 136.45 points respectively.
In the course of the week, DANGSUGAR listed additional 146,878,241 ordinary shares as a result of its merger with Savannah Sugar Company Limited.
Elsewhere, market activity went in mixed directions; while total Naira votes moderated by 7.30% to N15.46 billion, total deals and volume advanced by 14.26% and 10.34% to 16,933 deals and 1.33 billion shares respectively.
In the new week, we expect local OTC bond prices to appreciate (and yields to moderate), amid bullish activity in the fixed income space.
Hence, we expect Eurobonds yields to trade lower, especially those maturities trading at relatively higher yields, as local bonds yields become relatively less attractive amid lower yields.
In the new week, we expect the NSE ASI to close northward as investors further position in stocks with good fundamentals and dividend yields as corporates get set to release their 9 months financial results.
However, we advise investors to trade cautiously.