Nigerian Equity Markets | 22 Sep 2015: NSE-ASI Rises 0.5% as MPC Slashes CRR to 25.0%

Lagos, Nigeria, Capital Markets in Africa —  Investors’ sentiment in equities strengthened today in contrast to what was witnessed in the last two sessions as the All Share index closed 53bps higher to settle at 30,426.0pts. This brought YTD loss to -12.2%. Uptrend was predominantly boosted by gains in DANGOTE CEMENT (+1.2%), SEPLAT (+4.9%), UBN (+3.4%) and FORTE OIL (+1.0%). In like manner, market capitalization expanded to N10.4tn as investors’ value rose by N51.6bn at the close of trade. Market activity also improved as volume and value traded both increased 49.9% and 112.2% to 195.5m units and N3.1bn respectively.

Profit-taking in GUARANTY (-1.4%), STANBIC (-2.7%) and DIAMOND (-4.6%) fostered the depreciation in the Banking index (-0.3%). The Industrial Goods index rose 0.3% on DANGOTE CEMENT (+1.2%) while the Consumer Goods index gained 1.1% due to appreciation in UNILEVER (+0.6%), GUINNESS (+0.3%) and NIGERIAN BREWERIES (+1bps). The Oil & Gas Index also added 1.2% as a result of significant appreciation in SEPLAT (+4.9%) and FORTE OIL (+1.0%). The Insurance index increased 1.4% on account of bullish sentiment on MANSARD (+5.0%).

Market breadth (advancers/ decliners ratio) closed at 1.0x as 19 stocks both advanced and declined for the day. Top gainers were MANSARD (+5.0%), SEPLAT (+4.9%) and LIVESTOCK (+4.7%) while top losers were ETERNA (-5.0%), DIAMOND (-4.9%) and UBCAP (-4.7%). We anticipate a rebound in the performance of banking stocks in the next trading session, given the outcome of the MPC today which was concluded with a decision to reduce Cash Reserve Requirement (CRR) to 25.0% from 31.0%. We believe this will ease the TSA induced perceived liquidity crunch in the system. Thus enabling Banks the avenue to create more risk assets.  

Source: Afrinvest (West Africa) Limited Research Team