Market Wrap – October 6th, 2017

The equities market rallied to a 6-week high today as a mix of positive FTSE reclassification, improving macro outlook and early earnings buying triggered risk-on in stocks. Large caps such as NB(+3.91%) and Dangcem(+1.21%) which had been lackluster for weeks jumped on thin liquidity. Banking stocks also posted impressive gains – UBA(+2.61%), Zenith(+1.34%) and Guaranty(+1.12%) all jumped on strong foreign demand, FBNH(+5.26%) was the best performer in the sector buoyed by domestic buying. Other notable gainers include Wapco(+5.93%) and palm oil majors – Presco(+9.77%) and Okomu(+5%) which rose on strong domestic demand.

Market activities improved as some investors booked profits from recent gains. Turnover closed at N3.7bn ($10m) with trades in cheap tier I – Zenith accounting for 30% of value traded. There was also a cross of 85m Diamond shares between foreign investors. Today’s impressive +1.53% gain helped the bourse to its biggest weekly return (+2.48%) since July; ytd return closed at +35.15%. We expect the market to tick slightly higher next week on earnings expectations.

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