In spite of the relentless ruthless spread of the COVID-19, a number of stock markets all over the world shrugged off the pains of the Coronavirus to registered positive growth last week, with the Nigerian stock market outperforming others.
The bulls held sway, leading to a 7.2 per cent rise in the All Share Index (ASI).
The stock market recorded gains on all trading days as investors took position in undervalued shares across sectors. Consequently, gains in NIGERIAN BREWERIES (+45.7 per cent), CONOIL (+32.3 per cent) and CHAMPION (+20.0 per cent) lifted the local bourse by 7.2 per cent week-on-week (w/w) to settle at 22,921.59 points.
The Year-to-Date (YTD) loss moderated to 14.6 per cent as market capitalisation climbed N801.3 billion w/w to close at N11.9 trillion. Activity level was mixed as average volume traded rose 11.5 per cent to 373.7 million units while average value traded fell 33.3 per cent to N3.2 billion. The top traded stocks by volume were FBNH (239.9 million units), ZENITH (222.2 million units) and UBA (124.3 million units) while ZENITH (N2.8 billion), GUARANTY (N2.0 billion) and NESTLE (N1.2 billion) led by value.
All six sectors gained last week. The Consumer Goods index was the best performing indicator for the week, up 15.6 per cent on the back of bargain hunting in NIGERIAN BREWERIES (+45.7 per cent) and CHAMPION (+20.0 per cent). In the same vein, the Industrial Goods, Banking and AFR-ICT indices climbed 5.2 per cent, 4.7 per cent and 3.5 per cent respectively on account of price appreciation in DANGCEM (+16.2 per cent), GUARANTY (+10.2 per cent), ZENITH (+7.1 per cent) and MTNN (+6.8 per cent). The Oil & Gas and Insurance indices also advanced 1.5 per cent and 0.8 per cent respectively as investors took position in CONOIL (+32.3 per cent), OANDO (+9.2%), WAPIC (+3.8 per cent) and LAWUNION (+2.0 per cent).
Investor sentiment as measured by market breadth ratio weakened to 1.8x from the 2.3x recorded last week as 15 stocks advanced against the 34 that declined. The best-performing stocks for the week were the NIGERIAN BREWERIES (+45.7%), CONOIL (+32.3 per cent) and CHAMPION (+20.0 per cent) while NAHCO (-11.3 per cent), ARBICO (-9.8 per cent) and JOHNHOLT (-8.9 per cent) were the top losers. We expect performance in the coming week to be mixed.
Globally, performance across the developed markets was positive as five of seven indices advanced w/w. In the US markets, the S&P 500 and NASDAQ advanced 1.6 per cent and 5.3 per cent w/w respectively. Likewise, Hong Kong’s Hang Seng and Japan’s Nikkei 225 indices gained 0.3 per cent and 2.0 per cent w/w respectively while the German XETRA DAX index advanced 0.3 per cent w/w. Conversely, UK’s FTSE All-Share and France’s CAC 40 indices fell 1.7 per cent and 0.5 per cent w/w respectively.
In the BRICS market, performance was bullish as four of five indices under our coverage trended higher. South Africa’s FTSE/JSE All share index led the gainers, up 2.3 per cent w/w. Similarly, China’s Shanghai Composite trailed with a 1.5 per cent rise despite the weak Q1:2020 GDP numbers. In India, the BSE Sens gained 1.4 per cent w/w while Brazil’s Ibovespa advanced 1.1 per cent w/w. Lastly, Russia’s RTS closed the week negative with a 5.5 per cent loss.
In the African market, performance was bearish as four of six indices our coverage closed in the red. Nigeria’s All-Share index and Kenya’s NSE 20 were the gainers, up 7.2 per cent and 0.3 per cent w/w respectively. On the contrary, Mauritius SEMDEX and Morocco’s Casablanca MASI indices slipped 3.9 per cent and 2.3 per cent w/w in that order while Egypt’s EGX 30 and Ghana’s GSE Composite recorded a decline of 1.6 per cent and 4.0 basis pints (bps) w/w.
In Asia and the Middle East, performance was bearish as only two of five Indices we cover advanced w/w. Thailand’s SET and Turkey’s BIST 100 indices outperformed the pack, with gains of 0.9 per cent and 1.8 per cent respectively. Conversely, the Oil dependent markets -Saudi Arabia, Qatar and UAE – lost 5.3 per cent, 4.6 per cent and 3.5 per cent in that order after oil prices failed to rebound following the supply cut decision. In the coming week, we expect news around the COVID-19 pandemic and as well as economic recovery plans to shape the direction of global financial markets.
The moderate gains recorded were in spite of the fact that, last week, the ruthless spread of COVID-19 was sustained as the number of active cases globally rose to 1.9 million from 1.3 million while the death toll advanced to 130,885 from 79,235 recorded last week. The US, Spain and Italy remain the epicentre of the virus as the number of cases were 676,676, 185,309 and 168,941 respectively. The impact of the lockdown continues to be felt in the US labour market as an additional 5.2 million Americans filed for unemployment claim, taking the total number to 22 million in the last three weeks. Against this backdrop, President Trump is considering the reopening of the US economy in the coming week to cushion the adverse effect of the pandemic. While global health experts have warned against reopening the economy too soon, improvements in COVID-19 conditions in Germany, Austria and Spain is resulting in relaxed restrictions on the economic lockdown. Meanwhile, China’s economy contracted by 6.8 per cent, its first quarterly contraction in at least 28 years.