FRI, 13 NOV, 2020-theGBJournal-The bulls in the local bourse took the market to uncharted territory, as the rally on the penultimate trading day, when the ASI gained 6.23% triggered the market circuit breaker – the first time since its introduction in 2016. This led to the suspension of trading activities when the market first hit the 5.00% ceiling at 12:55 p.m, before reopening at 1:25 p.m.
Activity level mirrored the upbeat performance, as volume surged by 117.3% w/w while value spiked 158.5% w/w. Despite profit-taking activities on the final trading day, the All-Share Index remained above the 35,000 points psychological mark breached on Thursday, closing at 35,037.46 points.
Notably, investors’ interest in DANGSUGAR (+34.5%), ZENITH (+21.8%), NB (+21.4%), AIRTELAFRI (+21.1%), BUACEMENT (+20.9%), and GUARANTY (+8.7%) drove the benchmark index 13.0% higher, its eighth-consecutive weekly gain. The MTD return stood at 30.6% while the YTD return for index surged to 30.5%.
Performance across sectors was positive, as the Industrial (+17.0%), index led the chart closely followed by Banking (+14.4%) then Consumer Goods (+11.4%), Oil and Gas (+5.3%) and Insurance (+4.9%) indices.
In the short to medium term, Cordros Research say they still see scope for expansion in valuation multiples as sub 1% yields on NTBs will continue to engender rejigging of portfolios towards equities.
‘’In the week ahead, we expect investors’ attention to be centred on Q3 earnings yet to be published from the big banks (FUGAZ). Considering the robust gains recorded across most counters over the past two months, we expect some profit-taking activities, albeit a short-lived one. We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.’’ With Cordros Research.
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