August 12, 2021/United Capital Research

The domestic stock market continued its positive drive from the previous session as investors continue to strategically position ahead of H1-2021 earnings release by the big banks.  In addition, sustained buying interest in telecom stocks continue to amplify market performance. As a result, the All-Share Index (ASI) climbed by 0.7% to close at 39,448.46 points due to price appreciation in AIRTELAF (+4.9%), NNFM (+5.0%) and ETI (+5.5%). Market capitalization also rose by N141.6bn to hit N20.5tn while YTD loss moderated to 2.0%. Activity level weakened, as average volume and value traded declined by 61.7% and 47.5% to 181.4m units and N2.1bn, respectively.

Across the sectors, performance was bullish as three sectors out of the five sectors we cover closed in the green. The Banking sector led the pack as it gained 0.4% due to buying interest in ETI (+5.5%) and JAIZBANK (+5.1%). Similarly, the Oil & Gas and Insurance sectors closed higher by 8bps and 1bp respectively, as bargain hunting in OANDO (+0.4%), LINKASSURE (+6.8%) and NEM (+2.0%) drove the sectors northwards.  On the other hand, the Industrial Goods sector closed flattish with mild bearish bias, following a 1bp decline, as profit-taking activities in CUTIX (-0.5%) weighed on the index. The Consumer goods sector was the biggest loser albeit with a marginal loss of 2bps as it fell on account of selloffs in FLOURMILL (-0.7%).

Investors sentiment as measured by market breadth improved to 1.4x as 19 stocks advanced, and 14 stocks declined. In anticipation of the rest of the trading week, we expect the market to rally on the back of incoming earning releases. In addition, declining rates at the NT-bill auction may trigger favourable sentiment towards equities.