Local Bourse Opens the Week Negative

The local bourse opened the week on a negative note as the All Share Index shed 26bps to close at 43,056.51 points while YTD return moderated to 12.6%. Consequently, market capitalisation declined to N15.4tn as investors lost N105.0bn in value. The bearish performance observed in the market today was largely due to losses in UBA (-4.7%), UBN (-4.2%) and UNILEVER (-2.3%). Similarly, activity level weakened as volume and value traded fell 71.9% and 71.7% to 431.2m units and N5.6bn respectively. The top trades by volume were ZENITH (78.9m), JAPAUL OIL (64.8m), and REGALINS (41.6m), while the top traded by value were ZENITH (N2.5bn), GUARANTY (N0.8bn) and NESTLE (N0.5bn).
Mixed Sector Performance
Sector Performance was largely mixed as 2 indices closed in the red, 2 trended northwards while 1 closed flat. The Insurance index was the biggest gainer, up 0.8% on account of price appreciation in MANSARD (+2.7%) and NEM (+3.3%). Similarly, the Oil & Gas index inched 0.3% higher primarily due to buy interest in TOTAL (+1.7%). On the other hand, sell pressure in UBA (-4.7%) and UBN (-4.2%) dragged the Banking index 0.9% southwards. Relatedly, ZENITH released a largely impressive FY:2017 result today; Gross earnings and PAT expanded 46.7% and 37.2% Y-o-Y to N745.2bn and N177.9bn respectively while a dividend of N2.70 (dividend yield of 8.7%) was declared for the period. The Consumer Goods index lost 9bps today on the back of profit taking in UNILEVER (-2.3%) and NASCON (-2.8%) while the Industrial Goods index closed the day flat.
Investor Sentiment Softens
Investor sentiment as measured by the market breadth (advance/decline ratio) weakened to 0.5x from 1.1x recorded the previous Friday as 18 stocks advanced relative to 33 stocks that declined. The top performers were UNIC (+9.5%), MULTIVERSE (+7.7%) and HMARKINS (+7.7%) while REGALINS (-5.7%), DIAMOND (-4.9%) and UPL (-4.8%) were the worst performers. Although today’s performance was bearish, we anticipate a positive reaction in the market to new earnings which are expected to trickle in this week.