Daily Market Report –September 9th, 2015

BEARISH –Market tumbles on JPMorgan's notification.

The Nigerian Bourse halted 3 consecutive days of gains as the Benchmark Index --All Share Index (ASI)- succumbed to heavy sell offs in the market, slumping 2.9% to close for the day at 29,454.09 points.

Analysts at Afrinvest Research believe trading activities yesterday “were largely driven by panic in the market due to JP Morgan's announcement to begin the de-listing of Nigerian Government Bonds from its emerging markets bond Index (GBI-EM) by 30th September, 2015.”

The stocks that spearheaded this poor performance were GUARANTY (-5.0%) DANGCEM (-4.1%) and NIGERIAN BREWERIES (-3.8%) as investors lost a total of N311bn to bring market capitalization to N10.1tn. Activity level in the market also strengthened as total volume and value traded appreciated 102.7% and 114.4% to settle at 459.4m units and N4.3bn respectively.

All Sectors Dip Into the Red
All sector indices traded Southwards with the Banking sector Index losing the most (-3.9%) as sell offs in GUARANTY (-5.0%) and ZENITH (-5.0%) dragged the index down. The Industrial Index also declined 2.5% largely driven by price depreciation in DANGCEM (-4.1%). In the same vein, the Oil & Gas and the Consumer goods Indices depreciated 2.2% and 2.1% respectively while the Insurance index capped off the poor performance with a loss of 1.9%.

Sentiments Turn Negative
Investor sentiments clearly reverted to negative today as market breadth, measured by advancers to decliners' ratio, berthed at 0.2x with 9 stocks advancing against 49 declining stocks. The Best performing stocks for the day were TRANSEXPR (+9.2%), FIDSON (+5.0%) and GUINNESS (+5.0%) while the worst performing stocks were OANDO (-8.2%), FIDELITYBK (-5.3%) and FBNH (-5.2%). As noted earlier, we believe today's performance was primarily related to the immediate reaction to the announcement by JP Morgan to remove Nigeria from its GBI-EM index, thus we imagine that sell offs may persist in the interim. Pending information that may change investor sentiments towards the market, we advise investors to trade cautiously.