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Monday, April 09, 2018/12:18 PM / Afrinvest Research
Market Last Week (Our Observation)
• The local equities market in
the previous week extended the 3-week consecutive downtrend as the All
Share Index declined 1.6% W-o-W to 40,841.14 points while YTD returns
moderated to 6.8%.
• Performance across sectors was
bearish as all indices we track closed in the red. The Oil & Gas index
declined the most - down 2.8%- while the Industrial Goods and Banking
indices shed 2.1% and 1.1% respectively. Similarly, the Consumer Goods and
the Insurance indices also fell 1.1% and 0.1% respectively.
• The best performers for the
week were LASACO (+21.2%), MAYBAKER (+14.3%)
and LAWUNION (+12.3%) while the underperforming
stocks were JAPAUL OIL (-23.7%), UNITYBANK
(-17.2%) and GLAXOSMITH (-14.7%).
Market This Week (Our expectations)
• The Afrinvest weekly sentiment
indicator advanced to 0.8x from 0.6x points the previous week due to
increased activity in the local bourse.
• We believe the current negative
performance of the market is a correction to the bullish run witnessed in
the first two months of the year. The weak sentiment also reflects some
negative earnings surprises in the earnings season as well as slowdown in
portfolio flows into the equity market.
• The extended selloff has,
however, created attractive entry opportunities in large and medium cap
stocks with strong fundamentals. We therefore maintain our positive near
term outlook as investors hunt for bargain opportunities.
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