UBN Defies Bearish trend in Banking Sub-Sectors, Records +10.90% gain YTD

Proshare

Wednesday, March 12, 2014 5:14 PM / Research

 

The sentiments in the banking sub-sector remain negative and bearish as the banking stocks are trading with an average loss of -10.33%- an indication of cautious posture towards banking stocks so far in the year.

 

Though, the general bearish trend on the bourse could not be isolated from this unimpressive posture as YTD of ASI and NSE BANKING stand at -5.27% and -12.09% respectively. Aside this, the over bloated posture of shares outstanding of these banks coupled with other weak fundamentals and unfavourable monetary policies continued to increase cautious trading towards the sub-sector.



In our opinion, this seems to have weakened the loyalty enjoyed by these banks in the recent periods. FBNH tops the table of the laggards in the sub-sector while the UBN outperformed both sector (-12.09%) and market (-5.27), recording YTD +10.90%. The share reconstruction of recent period seemed to have aided investors’ confidence and loyalty towards UBN. 

 

Market Sentiments towards UBN... sustaining a strong reversal trend

Today, UBN recorded moderate patronage from both investors and shareholders to close with a significant surge of 55.73% in daily average volume to close at 0.72million units against daily average volume of 0.44million units traded yesterday.

 

The stock recorded moderate gain of +4.9% to sustain the 14-day uptrend trend to record +31.69% price appreciation, establishing a new support level at N9.70kobo, following a prolonged (37weeks) lacklustre trading and weak bargain posture to record -46.99% price loss.



The market outlook in the recent sessions revealed a strong reversal trend as the stock had appreciated by +8.90% in the week despite the general price volatility on the Nigerian bourse, outperforming the key benchmark indices in the week, which had appreciated by +0.15%- This is an indication of renewed bargain loyalty from both investors and shareholders.

 

In addition, technical indicators revealed a growing bargain posture with corresponding upsurge in the price momentum, indicating sustained bargain posture as noted above.



However, the stock closed neutral in short but remained bearish in mid-long term period as revealed by its price moving averages. This indicates an increased presence of the bulls towards the stock- an increased chance of extending the uptrend, considering its new support level at N9.70kobo.




However, price analysis revealed a low-key performance trend as the stock posted +6.80% gain and +0.19% as its 3months and 6months returns respectively while its 52weeks and YTD performance stood at +5.53% and 10.90 gain respectively.

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