The performance of the Nigerian equities market broadly improved last week despite the overall bleak short term outlook as bargain hunting and corporate releases drove market performance.
The market capitalisation appreciated by N45 billion to close at N8.548 trillion when compared with the N8.503 trillion posted the previous week.
Equally, the All-Share Index increased by 130.84 points or 0.54 per cent to close at 24,850.11 as against the 24,719.27 achieved the previous week.
During the week, both Banking and Consumer Goods first quarter results for the period ended March 31, 2016, except for Guinness that came in beat consensus, suggested better-than-expected start to 2016. Reviewing the results showed that Forte Oil’s profit after tax went up 21.85 per cent, Champion Breweries profit after tax (PAT) rose by 520.74 per cent and NEM Insurance’ profit up by 63.98 per cent. Others are UBA, UBN, Transcohot profits which rose by 18 per cent, 96.30 per cent and 35.20 per cent, respectively.
Meanwhile, some companies which results came in during the week showed a decline in their profit. Paintcom shed 50.76 per cent in PAT while CAP, Dangote Sugar and Guinness declined by 13.21 per cent, 71.06 per cent and 84.43 per cent respectively.
Market breadth was positive with 35 gainers versus 32 losers, compared to 26 gainers against 41 losers the previous week. Volume traded eased by 89.01 per cent to 885.37 million shares, worth N5.83 billion and traded in 13,798 deals, compared to the 8.05 billion shares valued at N13.33 billion that exchanged hands in 15,212 deals the previous week.
Speaking on the outlook for the market this week, analysts at Cordros Capital Limited said, “We expect market activities to be driven by the release of additional Q1-2016 earnings results in the coming week. Broadly better-than-expected earnings should be a plus for investors, and vice versa” while analysts at Afrinvest Limited added that “the positive performance and rebound in market sentiment last week was driven by better-than-expected corporate scorecards for the first quarter 2016 period. Sentiment is likely to switch to profit-taking mode in the week ahead as investors continue to speculate on weak macro fundamentals, but further declaration of impressive earnings results may counteract this.”
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