Daily Equities Market Review and Outlook

The Nigerian equities market closed in the red today signifying that the positive close yesterday was a "dead cat bounce". The All Share index fell 1.5% to close at 26,537.36pts while N142.9bn was lost in terms of market capitalization which settled at N9.4tn. The major drivers of the negative close today were DANGCEM (-3.3%), GUARANTY (-3.6%) and NIGERIAN BREWERIES (-2.4%). Activity level in the market stayed mixed today as volume traded improved 1.9% to 176.9m units while value traded fell 2.8% to N2.5bn.

The Oil & Gas sector index was the only gaining sector index today, appreciating 0.1% on account of uptick in OANDO (+4.9). On the flipside, the Industrial goods index slid 1.8% as sell offs in DANGCEM (-3.3%) and WAPCO (-0.5%) drove the index southwards. The Consumer goods and Banking indices closely trailed losing 1.2% and 1.1% respectively due to losses in NIGERIAN BREWERIES (-2.4%) and GUARANTY (-3.6%). The Insurance index closed 0.2% down.

Sentiments in the Nigerian Bourse turned negative today as 18 stocks advanced while 29 stocks declined to bring market breadth down to 0.6x (from 2.6x yesterday). HONYFLOUR (+9.8%), JBERGER (+5.0) and OANDO (+4.9%) topped the gainers chart while UACN (-7.0%), CADBURY (-5.0%) and TRANSCOHOT (-5.0%) led the list of losing stocks. Given the current low prices in the market.

Weekly Equities Market Review and Outlook
The equities market stayed bearish this week as investors continue to sell down on Nigerian equities due to weakening macroeconomic fundamentals and sustained bearish sentiment in the global crude oil market.  This was evident in further pressure on external reserves and currency depreciating exchange at the parallel market. The benchmark All Share Index sustained 3 days of consecutive losses from the start of the week, before strengthening marginally on Thursday -- a gain that was erased on Friday. Cumulatively, the index shed 2.7% W-o-W to close at a new 3-year low of 26,537.36, bringing MTD and YTD return to -3.1% and -23.4% respectively. Activity level weakened marginally as average daily volume and value traded this week declined 1.8% and 3.8% W-o-W to 230.5m units and N2.7bn respectively.

The Banking index posted the biggest loss of the week amongst sector indices as it shed 2.3% W-o-W due to sell pressures in ZENITH (-5.6%), UBA (-5.9%), ACCESS (-6.7%) and SKYEBANK (-16.3%). The Industrial Goods index trailed with a W-o-W loss of 2.1% due to the weak investor sentiment in DANGCEM (-6.2%). The Consumer Goods index also shed 0.7% - pressured by CADBURY (-9.8%) and GUINNESS (-1.6%). On the flip side, rally in CONTINSURE (+9.0) drove gains in the Insurance index (up +1.0% W-o-W) while the Oil & Gas index closed marginally up by 0.2% on the back of the gains in FORTE OIL (+2.4%) which recently secured a contract to lift crude oil on behalf of the NNPC.

Market sentiment measured by gainers/losers ratio was negative at 0.7x (27 gainers vs 41 losers). Top gainers include HONYFLOUR (+19.4%), JBERGER (+10.2%), CONTINSURE (+9.0%), UNITYBNK (+9.0%) and UNILEVER (+8.4%) while top losers were UACN (-21.5%), SKYEBANK (-16.3%), AGLEVENT (-16.2%), STANBIC (-11.2%) and CADBURY (-9.8%) respectively. We expect the market to rebound in the opening sessions of next week due to the low level of prices. However, we have observed that market has struggled to hold on to gains in recent time due general weak sentiment which has reduced the holding period of technical investors. Hence, we retain our short term bearish outlook for the market.