Equities Buck Gaining Trend, Down 1.6%

In a complete reversal of the bullish trend which began after the Press briefing of the CBN Governor –where the guidelines for the operation of the flexible exchange rate were released– the Nigerian Equities market closed in the red on Monday.

Despite the increasing expectation of foreign investors’ return to the market, profit taking thrived as investors sold off on stocks that gained significantly in the previous week. As a result, the All Share Index slid 1.6% to settle at 28, 769.90 points while YTD return pared to 0.4%. Sell-offs in market bellwethers, namely NIGERIAN BREWERIES (-5.0%), ZENITH (-4.1%) and DANGCEM (-2.1%) were the major drags to performance. Market capitalisation dipped N164.0bn to N9.9tn while activity level waned as volume and value traded fell 33.7% and 66.8% to 416.7m units and N2.3bn respectively.

Mixed Performance Across Sectors
Performance across sectors was mixed today as only the Insurance and Oil & Gas indices appreciated –up 0.6% apiece against the backdrop of gains in MANSARD (+5.0%) and FORTE (+1.0%). On the flipside, the Banking index chaired sector losers as sell-offs in ETI (-5.0%) and ZENITH (-4.1%) dragged the index 2.6% southwards. In the same vein, the Consumer Goods index fell 1.7% consequent on losses in NIGERIAN BREWERIES (-5.0%) and GUINNESS (-3.9%) while the Industrial Goods index closed 1.2% lower.

Sentiments turn Negative
Investor sentiments weakened today as market breadth settled at 0.5x (from 2.1x in the previous session) following 17 advancing stocks against 33 decliners. The top gaining stocks today were NEIMETH (+8.9%), LAWUNION (+8.0%) and CHAMPION (+7.3%) while ETI (-5.0%), NIGERIAN BREWERIES (-5.0%) and NAHCO (-5.0%) were the worst performing stocks. Despite today’s profit taking, we do not expect negative sentiments to be sustained as domestic investors will attempt early bird positioning in expectation of foreign investors’ return to the market.