Banking Stocks Drag Equities Market Performance

The domestic bourse opened the trading week on a negative note following sell offs in Tier 1 banking stocks – GUARANTY (-1.1%) and ACCESS (-1.8%) as well as FBNH (-2.7%). Consequently, the NSE All Share Index shed 12bps to close at 40,425.07 points while YTD return declined to 5.7%. Investors lost N17.2bn in value as market capitalization fell to N14.6tn. Similarly, activity level weakened as volume and value traded dipped 22.6% and 54.6% to 271.2m units and N2.3bn respectively. The top traded stocks by volume were AFRINSURE (90.0m), FIDELITY (21.9m) and DIAMOND (20.5m) while GUARANTY (N664.9m), ZENITH (N282.8m) and NESTLE (267.0m) were the top traded stocks by value.

Bullish Sector Performance
Sector performance was largely bullish as 3 of 5 indices under our watch trended northwards. The Oil & Gas index advanced the most, appreciating 0.5% on account of buying interest in FORTE (+4.9%). Following closely were the Industrial Goods and Consumer Goods indices, inching 0.3% and 0.1% higher as a result of gains in WAPCO (+0.6%), NIGERIAN BREWERIES (+0.4%), UNILEVER (+1.0) and DANGSUGAR (+0.8%). On the other hand, the Insurance index topped losers chart, down 0.9%, due to profit taking in NEM (-4.9%) and AIICO (-8.8%) while the Banking index fell 0.2% on the back of sell pressures in GUARANTY (-1.1%) and ACCESS (-1.8%).

Investor Sentiment Strengthens
Investor sentiment as measured by market breadth (advance/decline ratio) improved to 1.2x from 0.7x recorded the prior trading session as 26 stocks advanced compared to 22 stocks that declined. Today's top performing stocks were UNITY (+8.5%), HMARKINS (+7.4%) and LASACO (+5.1%) while NEM (-4.9%), CUSTODIAN (-4.8%) and STERLING (-4.7%) were the worst performing stocks. Despite today’s negative performance, we anticipate a rebound in the near term. We expect investors to react positively to the Q1:2018 GDP released earlier today as well as existing cheap valuations in the market.