THUR, 24 DEC, 2020-theGBJournal- Investors flocked into the shares of Dangote Cement following the announcement of its much-awaited share buyback programme. Based on the preceding, the local bourse received a boost as the ASI rose by 5.4% w/w, the second consecutive weekly gains and closed at 38,800.01 points, the highest level since 28 May 2018. Activity level was strong, as volume grew significantly by 45.6% w/w while value spiked by 128.4% w/w.
Although, foreign investor interest in AIRTELAFRI (+10.0%) dissipated compared to the prior week (+21.0%), bargain hunting in DANGCEM (+17.0%), BUACEMENT (+9.1%), and FLOURMILLS (+7.5%) buoyed market performance. Accordingly, MTD return rose to 10.7% while the YTD return for index improved to 44.5%, which in now ahead of the 42.3% gain recorded in 2017.
Performance across sectors was broadly positive. Save for the Banking (-1.0%) index that closed in the red, the Industrial (+12.1%), Insurance (+6.0%), Oil and Gas (+1.4%), and Consumer Goods (+0.3%) indices closed in the green.
As the year draws to a close, we expect yield-seeking investors to take positions in stocks with attractive dividend yields, in the face of increasingly negative real returns in the fixed income market. However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.
Meanwhile, Global stocks were broadly bearish as optimism over vaccines and Trump’s demand for an increment in the virus relief bill was outweighed by the emergence of a new variant of the COVID virus amid reinstatement of travel bans and lockdown measures.
Consequently, US (DJIA: -0.2%; S&P: -0.5%) stocks were set to close the week in the red. Likewise, in Europe, the STOXX Europe (-0.1%) and FTSE 100 (-0.5%) on track for a weekly loss, as investors sentiment was dampened by news of a new strain of virus which offset optimism surrounding the impending Brexit deal before the yuletide celebrations.
Asian (Nikkei 225: -0.4%; SSE: -0.9%) markets ended the week lower, as investors sentiment mirrored the trend on Wall Street. Emerging markets stocks (MSCI EM: +0.2%) recorded marginal gains driven largely by gains in South Korea (+1.3%) while Frontier (MSCI FM: +0.9%) market stocks were on track to close lower following losses in Kuwait (-1.5%) which outweighed the robust gain in Nigeria (+5.4%).
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