Local Bourse Remains Bearish

The local bourse extended its bearish performance from last week into the second consecutive trading session as the NSE All Share Index (ASI) shed 1.0% to close at 40,429.18 points. As a result, Investors lost N149.7bn in value as market capitalization weakened to N14.6tn while YTD return moderated to 5.7%. Today’s negative performance can be attributed to sell-offs among large-cap stocks led by DANGCEM (-1.1%), UNILEVER (-8.0%) and WAPCO (-7.2%). In line with market performance, activity level declined as volume and value traded trended lower, down 42.8% and 15.4% respectively. The top traded stocks by volume were FBNH (29.6m), SKYE (23.1m) and FCMB (23.0m) while NIGERIAN BREWERIES (N2.6bn), ZENITH (N606.9m) and GUARANTY (N448.9m) were the top traded by value.

Insurance Index Emerges Lone Gainer amidst Bearish Sector Performance
Sector performance was largely bearish as 3 of 5 indices under our coverage closed southwards save the Insurance and Oil and Gas indices which closed downwards and flat respectively. The Insurance index closed up 0.9% on account of gains in MANSARD (+5.0%) and CONTINSURE (+3.9%) while the Oil & Gas Index closed flat. The Industrial Goods index led laggards down 3.9% due to sell offs in DANGCEM (-1.1%) and WAPCO (-7.2%) following an underwhelming FY:2017 result in the latter with a Loss after Tax of N34.6bn. The Banking index trailed, down 0.9%,  due to profit taking in GUARANTY (-1.4%) and ZENITH (-1.5%). Lastly, the Consumer Goods index closed southwards, shedding 0.9% as losses in UNILEVER (-8.0%) and DANGFLOUR (-4.7%) accounted for this bearish performance.

Investor Sentiment Strengthens
Investor sentiment as measured by market breadth (advance/decline ratio) improved from 0.4x recorded in the previous session to 0.6x consequent on 17 stocks that advanced against 30 stocks that declined. The top performing stocks for the day were LEARNAFRICA (+9.3%), JAPAULOIL (+8.9%) and CHAMPION (+8.8%) while CILEASING (-9.3%), SKYE (-8.5%) and UNILEVER (-8.0%) led the laggards for the day. Following the losses in large and mid-cap stocks observed in today’s trading session, this presents attractive entry opportunities for investors, thus, we do not rule out possibility of bargain hunting in the near term ahead of the release of Q1:2018 results.

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