Sustained Bearish Run Drags Benchmark Index to 4-Month Low

The local bourse sustained its negative performance for the sixth consecutive trading session dragging the All Share Index (ASI) 1.1% lower to close at 39,723.85 points – lowest since the 4th of January, 2018 - while YTD return plunged to 3.9%. Accordingly, investors lost N154.6bn in value as market capitalization fell to N14.4tn – lowest since 9th January, 2018. The bears had the day as investors booked profit in bellwethers – NIGERIAN BREWERIES (-5.0%), ZENITH (-3.4%) and GUARANTY (-1.6%). Correspondingly, activity level weakened as volume and value traded shed 3.9% and 57.2% to 256.4m units and N2.0bn respectively. The top traded stocks by volume were SOVERENINS (53.5m), DIAMOND (29.6m) and FIDELITY (26.8m) while ZENITH (N558.3m), GUARANTY (N392.3m) and UBA (N145.8m) were the top traded stocks by value.

Bearish Sector Performance
Performance across sectors mirrored the record bearish performance as all indices under our coverage closed in the red. The Consumer Goods and Banking indices fell 1.8% and 1.7% respectively, as a result of sell offs in large cap stocks – NIGERIAN BREWERIES (-5.0%), DANGSUGAR (-4.8%), ZENITH (-3.4%) and GUARANTY (-1.6%). Following closely were the Insurance and Industrial Goods indices, declining 1.1% and 0.2% respectively on account of losses in CONTINSURE (-4.7%), LINKASSURE (-4.6%) and CCNN (-4.8%). Lastly, the Oil & Gas index trended southwards marginally by 1bp, following losses in ETERNA (-4.7%).

Investor Sentiment Dampens
Investor sentiment as measured by market breadth (advance/decline ratio) significantly weakened to 0.2x from 0.5x recorded the previous trading session as 8 stocks advanced against 35 stocks that declined. The best performing stocks were MRS (+10.1%), IKEJAHOTEL (+4.9%) and LAWUNION (+4.4%) while DIAMOND (-8.3%), FIDELITY (-5.5%) and CAVERTON (-5.0%) were the worst performing stocks. With the bearish performance this week, we (Afrinvest) are optimistic of a rebound in the near term as price depreciation in large and mid cap stocks create attractive entry opportunities.