Nigerian Equity Market: Stock Recommendations for the Week (19/10/2020 – 23/10/2020)

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Stocks defy protest, extends bullish run

The local bourse closed the week on a positive note, as late buying interests seen on Friday offset the week loss and pushed the market further into the positive region after two days of the quiet session. The NSE-ASI gained 0.39% w/w to close at 28,659.45points. As such, the YTD returns came in at +6.8% and market capitalization gained N244.1bn to close at N15.0tn.

Nigerian Equity Market Stock Recommendations for the Week Brandspurng
A Nigerian youth seen waving the Nigerian national flag in support of the ongoing protest against the unjust brutality of The Nigerian Police Force Unit named Special Anti-Robbery Squad (SARS) in Lagos on October 13, 2020. – Nigerians took to the streets once again on October 13, 2020, in several cities for fresh protests against police brutality, bringing key roads to a standstill in economic hub Lagos.
Demonstrations organised on social media erupted earlier this month calling for the abolition of a notorious police unit accused of unlawful arrests, torture and extra-judicial killings.
The government gave in to the demand on October 11, 2020, announcing that the federal Special Anti-Robbery Squad (SARS) was being disbanded in a rare concession to people power in Africa’s most populous nation. (Photo by Benson Ibeabuchi / AFP) (Photo by BENSON IBEABUCHI/AFP via Getty Images)

In terms of activity, average volume and value traded declined by 37.7% and 35.0% to 390.9mn units and N4.6bn, respectively. The reduction in market activities was majorly due to the high base effect of last week.

All sector indices under our coverage closed positive for the week except for Insurance sector that closed in the red territory. The Banking sector (+2.9%) led the gainer campaign, followed by the Oil & Gas (+2.4%) sectors fueled by the price increase in UBA (+5.9%), FCMB (+35.0%), ACCESS (+1.9%), SEPLAT (+2.4%), (+4.0%), and TOTAL (+10.0%).

The Consumer goods (+1.8%) and Industrial goods (+0.2%) sectors also closed in the green zone, thanks to price appreciation in GUINNESS (+12.3%), PZ (+7.3%), INTBREW (+12.9%), CADBURY (+12.6%), and WAPCO (+10.9%), While Insurance (-0.7%) sector was the only sector that closed negative dragged by MANSARD (-5.7%), and CUSTODIAN (-4.8%).

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Investor sentiment was above the waters as market breadth closed at 1.6X as 34 stocks gained, and 21 stocks declined w/w. For this week, we expect more focus should be on banking stocks as the market expects their 9M earning.

Nigerian Equity Market brandspurng Stock Recommendations for the Week
Source: Company filings, NSE, United Capital Research, UR= “Under Review”
Prices as at Friday 16th October , 2020

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