Stock Market Sinks to 36-Month Low

At the close of trade today, following a decline of 0.1%, the Nigerian Equities market hit its lowest level in three years at 27,287.89pts, thereby driving YTD return further south to -21.3%. Market capitalization equally lost N9.0bn to close at N9.4tn. The downtrend recorded at the close of trade was on the back of persistent declines in FORTE OIL (-5.0%), NIGERIAN BREWERIES (-1.7%) and SEPLAT (-4.6%). Conversely, against increased activities recorded in most bellwether banking stocks - FBNH, DIAMOND, GUARANTY and ZENITH -- market activities surged 150.1% to 383.3m and 241.8% to N5.3bn for volume and value traded respectively.

Industrial Goods Index Paced Sector Gains
Most NSE sector indices declined today. The Industrial Goods index emerged the lone gainer after adding 1.3% against the backdrop of the rise in DANGOTE CEMENT (+0.6%) and WAPCO (+2.4%). On the other hand, the Oil and Gas index lost 3.8% driven by sell-offs in FORTE OIL (-5.0%) and SEPLAT (-4.6%). The Insurance index also declined 1.0% due to selling pressure in MANSARD (-2.6%) and AIICO (-3.2%). Consumer Goods and Banking sectors lost 3bps and 1bps -- NIGERIAN BREWERIES (-1.7%) and ACCESS (-2.8%) respectively.

Reduced Sentiments
Market breadth closed lower to 0.6x (vs. 0.8x) today, after 21 stocks advanced against 36 declining stocks. At the close of trading, CONTINENTAL REINSURANCE (+5.0%), BETA GLASS (+5.0%) and STERLNBANK (+4.7%) were highest gainers while PZ (-6.2%), CCNN (-5.0%) and FORTE OIL (-5.0%) lost the most. Given moderation in losses today and cheap market valuation, we believe bargain hunters may begin to take position in the near term.