Nigerian Equity Market Outlook: COVID Out, Riots In?

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Thursday, October 22, 2020 / 10:37 AM / by United Capital Research / Header Image Credit: Business LIVE


Yesterday, the Nigerian Stock Exchange All-Share Index (NSE-ASI) ended in the red territory as market participants priced-in the heightened risk around the fatal outcome of what started as a peaceful protest in Nigeria. Specifically, investors lost N113.1bn as the NSE-ASI was down by 0.75% to close the day at 28,449.4 9points. Also, volume and value of stocks traded on the exchange rose 10.1% and 44.4% to close at 327mn units and N4.2bn, respectively.


The performance across sectors was underwhelming, as all indices under our coverage ended the day in the red territory save for the Insurance index (+0.6%) which was buoyed by price appreciation in WAPIC (+10.0%). The Banking index led the losers camp, down 1.7% on the back of losses in GUARANTY (-1.3%) and ZENITH (-1.2%). Similarly, the Oil & Gas (-0.3%), Industrial Goods (-0.3%) and Consumer Goods (-0.1%) indices weakened, due to sell pressures in ARDOVA (-10.0%), WAPCO (-4.4%), and GUINNESS (-5.9%) among others.


Clearly, the jitters about the ongoing standoff between protesters and the government portends a negative outlook for the market in the interim and may reverse the expected post-COVID-19 recovery in the economy. Also, this may diminish the prospect of earnings improvement in Q4-2020E. Yet, we observe that panic sales provide an opportunity for new or existing investors to enter/re-enter the market at new lows amid record low yields environment and pent-up liquidity in the system. As such, we maintain an optimistic outlook for Nigerian stocks.


Proshare Nigeria Pvt. Ltd.


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Proshare Nigeria Pvt. Ltd.


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