Weekly Stock Recommendation and Corporate Benefits Trigger – October 12th 2020

Mixed sentiments dominated the Nigerian bourse last week. Although the market closed up in the first two (2) trading days, profit-taking activities halted the rally and held on for the rest of the week. Week on Week, the All-Share Index advanced by 5.30% to 28,415.31pts., driving the YtD return to 5.86%. All sectoral indices closed in positive territory, with the NSEBNK10 (+7.83%) and the NSEIND (+2.7%) recording the most gains. ETERNA topped the gainers’ list having advanced by 32.48%, while UAC-PROP emerged as the biggest loser, shedding 11.96% off its share price. So far, the negative real returns in the fixed income market and increased system liquidity have contributed to stirring the uptick in the equites market.

We anticipate lingering bullish sentiments to fuel market performance this week. Although we do not rule out profit taking activities which kicked in last week, we expect that the bulls would have the upper hand. In making a case for buying interest in the equities market, we identify elevated system liquidity supported by incoming OMO maturities, depressed fixed income yields and a dearth of attractive alternative investment options to dictate market direction this week. Ultimately, we expect that the market would close positive this week.

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Weekly Stock Recommendation – October 12th 2020


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