Global Stocks Gain as investors track earnings, economic data
This week, the bulls advance, as eleven (11) out of the fourteen global market indices under our coverage declined, while three (3)Â declined. The positive performance was due to some stellar corporate earnings, and stronger-than-expected U.S Job reports, amidst continued concerns over the Delta variant of the Coronavirus pandemic, impacting a budding economic recovery.
According to the job report released on Friday by theÂ U.SÂ Labour Department, theÂ Non-farm payrollsÂ increased byÂ 943,000Â jobs last month, the most in almost a year, while theÂ unemployment rateÂ dropped toÂ 5.4%.Â Also, theÂ Labour DepartmentÂ reportedÂ that 385,000 Jobless claims has been filed last week, while layoff dropped to the lowest in more than 21 years of last month.
Furthermore, theÂ Bank of England (BoE)Â on Thursday left its monetary policy unchanged but warned of a more pronounced figure of above-target inflation.
Consequently, all the major U.S indices under our coverage,Â Â DJIA Index, S&P 500 Index and Nasdaq Composite increased byÂ 0.78%w/w, 0.94%w/w, 1.11%w/wÂ respectively, following some stellar corporate earnings reports,
Similarly, all the major indices under our coverage in Europe; theÂ France CAC 40 and UK FTSE 100, and the German DAX IndexÂ advanced byÂ 3.09%w/w,Â Â 1.29%w/w, and 1.40%w/wÂ respectively, as investors grow confident in the regionâsÂ economic recovery and earnings growth.
In the same vein, all the major indices under our coverage in Asia, theÂ Japan Nikkie 225, Hong kong HANG SENG, China Shanghai Composite, and India S&P BSE IndexÂ grew byÂ 1.97%w/w,Â 0.84%w/w, 1.79%w/w, and 3.22%w/wÂ respectively, despite the soaring cases of the Covid-19 Delta variant and travel restrictions in some part of the region.
However, all the major indices in the emerging markets under our coverage,Â South Africa FTSE/JSE,Â Egypt EGX 30, andÂ Argentina Merval IndexÂ receded byÂ 0.43%w/w, 0.18%w/w, and 0.22%w/wÂ respectively, save forÂ Brazil BovespaÂ IndexÂ that gainedÂ 0.83% w/wÂ to close the week.
In the coming week, we expect investors to react to the positive U.S Jobs report, which indicates the global economy is still on track for recovery. However, soaring cases of the Covid-19 Delta variant in some parts of the globe could dictate investorsâ sentiment.
Four Days of Bullish Sentiment Sends Local Bourse Green
The Nigerian Bourse ended w/w trading on a positive note, as theÂ NGX-ASIÂ appreciated byÂ 0.68%Â fromÂ 38,547.08Â Â pointsÂ to close atÂ 38,810.75Â points. Positive market performance was recorded in four of the five trading sessions.
Investors gained aboutÂ N137.4 billion,Â as the Market Cap. grew fromÂ N20.08 trillionÂ in the previous week toÂ N20.22 trillion.
At the end of the week, theÂ Insurance,Â Oil & Gas, and Banking, Consumer, and Industrial Goods SectorÂ all receded byÂ -1.65%,-0.61%,Â â0.58%, -0.48%,Â andÂ -0.22%Â respectively.
According to the NGX Weekly Summary Report,Â CUTIX PLCÂ emerged as the best performing stock for the week with a w/w gain ofÂ +17.95%, whileÂ NEIMETHÂ emerged as the worst-performing stock with a w/w loss ofÂ -14.29%.
A total ofÂ 989.593 millionÂ sharesÂ worthÂ N8.183 billionÂ inÂ N8.183 billionÂ inÂ 19,617 dealsÂ were traded this week by investors on the floor of the Nigerian Exchange Group (NGX), as against a total ofÂ 1.37 billion sharesÂ worthÂ N11.82Â billionÂ inÂ 22,982Â deals last week.
In terms of corporate action,Â MEYER PLCÂ andÂ CHIPLCÂ proposed an interim dividend ofÂ N1.50Â andÂ N0.02Â respectively.
Twenty-three (23) equitiesÂ appreciated at price during the week, lower thanÂ Thirty-seven (37)Â in the previous week.Â Thirty-six (36) equitiesÂ depreciated in price, higher thanÂ Thirty-five (35) equitiesÂ in the previous week, whileÂ ninety-sevenÂ (97) equitiesÂ remained unchanged, as againstÂ eighty-four (84) equitiesÂ recorded in the previous week.
We expect mixed sentiment to continue in the coming week, as investors continue to react to the released earnings report, and yield movement in the fixed income market.
Marginal gain of 0.04%w/w halts bearish sentiment of two consecutive weeksÂ Â Â
Transactions on theÂ NASD OTC Security Exchange MarketÂ closed on a positive note to halt the bearish sentiment of two consecutive weeks, as theÂ NASDÂ Security Index NSI grew byÂ 0.04%, representingÂ 0.31Â basis points to close atÂ 752.81 pointsÂ againstÂ 752.50Â pointsÂ in the previous week. Investors gainedÂ N270 millionÂ for the week, as theÂ NASD OTCÂ MarketÂ CapitalisationÂ closed atÂ N654.32Â billionÂ for the week.
Total trading activity for the week was valued atÂ N1.05 billionÂ inÂ 102 deals. The most traded stocks on the exchange for the week are;Â SDNGXGROUP,Â SDCSCSPLC, SDFCWAMCO, SDNDEP, SDNIPCOPLC, SDFOODCPT, SDWAPPLC, SDMIXREAL, SDFSTTRUSTMB, and SDAFRILAND.
SDWAMCOÂ emerged top gainer for the week, with a maximum price appreciation of (+5.79% N127),Â whileÂ SDWAPPLCÂ emerged top loser for the week with a price depreciation of (-19.32% to N0.71).
This weekâs price appreciation was a result of buy-sentiment in medium and large capitalized stocks among which are;Â SDWAMCO(+5.95% to N127), and SDNGXGROUP(+0.24% to N16.53).
However, the market breadth close negatively, recording 3 losers and 2 gainers.
We expect the NASD OTC Market to trade in a tight range in the coming week.
This weekâs activities on Treasury Bills were limited to the secondary market, as no new instruments were offered.
System liquidity indicators closed higher, asÂ Overnight (O/N)Â andÂ Open Buy Back (OBB)Â rose toÂ 20.50%Â and 20.00%Â respectively, fromÂ 7.75%Â andÂ 7.50% in the previous week.
Consequently, the average yield of the secondary Treasury Bills market declined byÂ 17bpsÂ toÂ 5.63%, as againstÂ 5.90%Â recorded last week, due to selling pressure.
Similarly, the average yield on the secondaryÂ Open Market Operation (OMO)Â closed lower to settle atÂ 7.78%, representing aÂ 91bpsÂ decrease against last week.
In the coming week, we expect the money market to trade in a tight range as investors focus on developments in the NTB auction where the apex bank is scheduled to roll over N51.49bn worth of bills. Looking at the trend from the previous NTB auctions, we expect the stop rate for the shorter tenors to remain the same, while the stop rate for the longer end of the curve recedes further due to huge buy-interest.
This week, theÂ DMOÂ on behalf of theÂ Federal Government of Nigeria offer for subscription the 2-Year and 3-Year Savings Bond with an interest rate of 8.864%Â andÂ 9.864%Â respectively, against the interest rate ofÂ 8.35%Â andÂ 9.35%Â inÂ July 2021.
Furthermore, the average yield on the secondary bond market closed on a bullish sentiment to 9.06%,Â as againstÂ 9.25%Â recorded last week, representing a decline ofÂ 19bps.
We expect the bond market to trade in a tight range, as investors monitor yield movement.Â Â
Foreign Exchange Market
At theÂ I&E FX window, the Naira depreciated byÂ 0.01%(w/w) to close on Friday (06/08/2021) atÂ â¦411.50/USDÂ againstÂ â¦411.44/USDÂ from last Fridayâs position. However, at theÂ BDC, Naira appreciated byÂ 1.38%(w/w) to close on Friday (06/08/2021) atÂ â¦508/USDÂ againstÂ â¦515/USDÂ from last Fridayâs position.
TheÂ Foreign ReserveÂ grewÂ $185.18Â millionÂ to the level ofÂ $33.57 billionÂ (05/08/2021) fromÂ $33.38 billion (29/07/2021).
The Brent CrudeÂ price depreciated byÂ $4.71/barrelÂ (w/w) toÂ $70.70/barrelÂ this Friday(06/08/2021)Â as againstÂ $75.41/barrelÂ lastÂ FridayÂ (30/07/2021),Â representing a drop ofÂ 6.66% (w/w).Â Similarly, NigeriaâsÂ Bonny LightÂ also decreased by $4.55Â toÂ $69.77/barrel on Friday(06/08/2021)Â fromÂ $74.32/barrelÂ (30/08/2021),Â representing a drop ofÂ 6.52% (w/w)