Bearish Run Extends to 11th Consecutive Day

The rout in the equities market extended into the 11th Consecutive day as the All Share Index (ASI) fell 4.1% to settle at 22,550.83 points.  Persistent sell offs in WAPCO (-9.7%), DANGCEM (-7.1%) and NESTLE (-5.0%) dragged the Index further South. Capitalization in the market lost N45.2bn to close at N7.7tn. Activity level in the market also waned today as volume and value traded declined 58.8% and 72.9% to 196.2m units and N1.7bn respectively.

All Sectors close in the Red
Performance across sectors was bearish as all sector indices closed in the red. The rout on WAPCO (-9.7%) and DANGCEM (-7.1%), the most capitalised stocks in the sector pulled the Industrial Goods Index southwards (-7.7%). Similarly, the Consumer Goods and Banking sector Indices fell 3.8% and 1.6% due to losses sustained in NESTLE (-5.0%) and ZENITH (-4.7%). The Insurance and Oil & Gas Indices closed out the poor performance losing 1.2% and 0.8% respectively.

Negative Sentiment Linger on
Sentiments in the market stayed negative today with a market breadth of 0.1x following 5 stocks that advanced as 36 which declined. The top performing stocks at the close of trading were CONTINSURE (+4.5%), TRANSCORP (+2.0%) and ETERNA (+2.0%) while WAPCO (-9.7%), GUINNESS (-9.7%) and STANBIC (-9.7%) declined the most. Sell offs in the market are expected to persist in the Interim due to lack of fiscal policy direction and increasing macroeconomic headwinds as outlook for oil prices remain bearish. However, the current rout in the market presents an attractive entry point for investments with a long term investment horizon (+ 2 years). We suggest dividend paying stocks for investors with a long horizon while simultaneously hedging their position with an overweight fixed income exposure.