Bearish Run in Local Bourse Extends to 5th Consecutive Trading Session

The bearish performance of the domestic bourse continued for the fifth consecutive trading session as the All Share Index (ASI) declined 25bps to settle at 40,150.55 points while YTD return moderated to 5.0%. Consequently, investors lost N35.8bn as market capitalization fell to N14.5tn. Profit taking in ETI (-2.2%), NIGERIAN BREWERIES (-0.7%) and DANGSUGAR (-2.5%) were the major drags to today’s performance. Nonetheless, activity level was mixed as volume traded fell 4.8% to 266.7m units while value traded rose 14.3% to N4.7bn. The top traded stocks by volume were IKEJAHOTEL (45.8m) - which has maintained the top spot for the second consecutive trading session after the NSE lifted the suspension on trading of the stock on Monday- while ACCESS (30.4m) and FIDSON (27.2m) followed closely. NESTLE (N2.2bn), GUARANTY (N598.7m) and ZENITH (N560.0m) were the top traded stocks by value.

Oil & Gas Sector Emerges Lone Gainer
Sector performance was largely bearish as 4 of 5 indices under our watch trended southwards. The Oil & Gas index was the only gainer appreciating 0.1% on account of gains in MRS (+4.9%). On the contrary, the Consumer Goods index shed the most, down 0.5%, following losses in NIGERIAN BREWERIES (-0.7%) and DANGSUGAR (-2.5%) while the Insurance index fell 0.3%, as a result of sell pressures in LINKASSURE (-4.4%) and AIICO (-4.6%). Similarly, the Banking and Industrial Goods indices declined 0.2% and 0.1% respectively due to profit taking in ETI (-2.2%), FCMB (-4.8%), CAP (-2.9%) and NASCON (-0.2%).

Investor Sentiment Further Weakens
Investor sentiment as measured by market breadth (advance/decline ratio) softened to 0.5x from 0.6x recorded the preceding trading session as 15 stocks advanced compared to 28 stocks that declined. The top performers were IKEJAHOTEL (+9.8%), MRS (+4.9%) and FIRSTALUM (+4.6%) while UACN (-8.5%), CHAMS (-5.0%) and CILEASING (-4.9%) were the worst performing stocks. With the Relative Strength Index (RSI) of the ASI at 33.2 - close to the oversold region, we anticipate a rebound in the near term. Nevertheless, we do not rule out the possibility of sustained sell offs in subsequent trading sessions this week.