Profit Taking Drags Down Nigerian Bourse

The Nigerian bourse retreated from two consecutive sessions of uptrend to end Thursday in the red on account of profit taking across sectors. The All Share Index dipped 0.6% to close at 28,046.96 points whilst market capitalization shed N54.5bn to settle at N9.6tn. The performance of the benchmark index was dragged by profit taking in ZENITH (-2.9%), NIGERIAN BREWERIES (-0.9%), ETI (-2.6%) and FBNH (-4.8%). Similarly, market activity weakened as volume and value traded declined 44.6% and 53.5% to close at 270.7m units and N2.2bn.
Bearish Performance across Sectors
The watered performance of the ASI was further highlighted in the bearish performance across sectors. The Insurance and Banking indices depreciated 1.5% and 1.4% as investors took profit in MANSARD (-4.7%), AIICO (-2.8%), ZENITH (-2.9%), ETI (-2.6%) and ACCESS (-1.8%). Likewise, the Consumer Goods index declined 0.5% as a result of price depreciation in NIGERIAN BREWERIES (-0.9%), FLOURMILL (-4.0%) and HONYFLOUR (-3.0%) whilst the Oil and Gas index (-0.2%) was pulled by selloffs in OANDO (-3.1%) despite a 10.2% surge in MRS. The rally in MRS was driven by its H1:2016 results submitted today, where the company reported a 45.4% Y-o-Y growth in revenue to N53.8bn whilst PAT expanded significantly from N37.6m in H1:2015 to N909.7m. The Industrial index dipped 3bps.
Dampened Investor Sentiment
Investor sentiment took a beating today as market breadth (advancers/decliners ratio) closed at 0.3x (from 1.0x yesterday) as a result of 8 advancing stocks against 27 decliners. MRS (+10.2%), PHARMDEKO (+4.8%) and LAW UNION (+2.0%) led the gainers while SKYE (-7.9%), BERGER, CUTIX and FCMB (-5.0% apiece) led the laggards. We believe the upward review of the benchmark rate by the MPC coupled with the current attractive yields in the money market will dampen interest in equities in the short term as we expect investors may redirect funds to the money market.