Sell Pressure Persists in the Bourse

The Nigerian equity market closed southwards today as sentiment swung negative, extending the bearish run in the market which has seen the All Share Index closing negative on 13 out of the last 15 trading sessions.

The All Share Index (ASI) declined 64bps today to close at 28,981.12 points whilst YTD loss rose to16.4% - pressured by sell-down pressure in NIGERIAN BREWERIES (-4.1%), ZENITH (-4.0%), FORTE OIL (-2.8%), STANBIC (-4.2%) and GUINNESS (-3.7%). Market capitalization also shed N61.9bn to close at N10.0tn. Market activity however softened as volume and value of equities traded fell 68.9% and 87.6% to 317.3m units and N1.8bn respectively.

The significant decline in activity is majorly due to the higher base effect of the unusually high volume of transactions recorded in NIGERIAN BREWERIES (-4.1%) and GUARANTY (+0.5%) yesterday

Oil & Gas Sector Index Leads Decliners
Sector indices performance remains mixed as the Oil & Gas index shed 1.8% today to lead 2 other decliners due to profit-taking in FORTE OIL (-2.8%), SEPLAT (-2.2%) and OANDO (-0.2%); followed by the Consumer Goods Index (-1.4%) which was weighted down by the bearish sentiment in brewers - NIGERIAN BREWERIES (-4.1%) and GUINNESS (-3.7%).

Similarly, the Banking Index shed 1.2% on the back of the declines in ZENITH (-4.0%) and DIAMOND (-4.5%). The Industrial Goods index topped the gainers chart with 0.4% whilst Insurance index was marginally up by 0.1%.

Sentiment Swung Negative
Market sentiment measured by its breadth (the advancers'/decliners 'ratio) weakened to 0.7x as 18 stocks closed down whilst 25 gained. The top gainers today were UNILEVER (+10.2%), SKYEBANK (+4.7%) and ETERNA (+4.7%) whilst CAVERTON (-4.9%), NEIMETH (-4.9%), NAHCO (-4.8%) led laggards.

The extended sell down pressure we continue to see in the bourse is majorly a reaction to the weakening macroeconomic fundamentals which has constrained earnings and profitability performance of listed companies.

As we expect the Presidency to inaugurate the executive cabinet tomorrow, an immediate roll-out of economic programs could boost investors' sentiment although we do not expect the impacts to materialise in the short term. Hence, we continue to advice caution on the part of retail investors seeking short term gains even as we continue to see value in the market with attractive medium to long term upsides.