Nigerian Bourse Starts Off Lower

The local market opened the year lower, as the NSE All Share Index (ASI) slipped 1.0% at the close of the first trading day of the year to settle at 28,370pts. In like manner, market capitalization declined N297.3bn to close at N9.8tn. The loss recorded in the broader index today was against depreciations in some bellwether counters such as NIGERIAN BREWERIES (-5.0%), NESTLE (-3.5%) and FBNH (-4.9%). Similarly, market activities eased significantly as volume and value traded contracted 60.8% and 81.8% to close at 98.9m units and N700.5m respectively.

A Broadly Positive Start for Sector Indices
The sectorial baskets of the NSE ASI closed majorly in the green today as only the Consumer Goods index shed 3.0% consequent on depreciations in the basket bellwethers such as NIGERIAN BREWERIES (-5.0%) and NESTLE (-3.5%). On the flipside however, gains in other sectorial indices were marginal with the Insurance index leading with 0.3% against the 4.4% rise in AIICO. Equally, following the 1.7% rise in OANDO, the Oil & Gas index rose 0.2%. The Banking and Industrial Goods sector indices added 10bps and 4bps points respectively.

Reversal in Market Breadth
After finishing off the previous year with a surge, market sentiments -- ratio of advancers to decliners - dropped to 0.6x today as 11 stocks advanced against 17 declining stocks. LEARNAFRICA (+8.5%), VONO (+4.9%) and OKOMU (+4.9%) led the gainers while SKYE BANK (-5.1%), TRANSCORP HOTEL (-5.0%) and GLAXOSMITH (-5.0%) were biggest losers. Market performance today mirrored the rather weak investors' confidence on the outlook of the domestic economy together with a bearish global equities market environment which triggered a shutdown of the Chinese market today following a 7.0% drop. We do not expect a significant improvement in the near term.