The Bears Hold Sway at the Exchange

The benchmark index of the Nigerian stock market shed 0.9% today to berth at 27,596.81pts. This dragged YTD loss to a distressing 20.4%, the highest loss since 13th February 2015. Market capitalization declined N84.8bn to N9.5tn. Market activity on the other hand improved; volume and value traded rose to 176.4m (+14.0%) and N3.1bn (+38.0%) respectively.

Industrial Goods Index Records Highest Loss
All key sector indices were also down. The Industrial Goods sector recorded 1.6% loss on account of DANGOTE (-2.5%) and WAPCO (-0.6%). OANDO depreciated 5.2% resulting in the 0.6% decline in the Oil & Gas sector. ACCESS (-2.1%) and DIAMOND (-4.8%) had the highest losses in the Banking sector which slipped 0.3%. The Insurance sector performed negative by 0.3% as well while the Consumer Goods sector waned 2bps.

Sentiment on the Bourse Improves, Albeit Negative
Market breadth (advancers/decliners ratio) settled at 0.6x relative to 0.3x in the prior session as 12 tickers advanced as against 21 decliners. Top among the 12 advancers were NEIMETH (+8.9%), NAHCO (+4.9%) and LAWUNION (+3.7%) while top decliners were OANDO (-5.2%), HONYFLOUR (-5.0%) and MAYBAKER (-5.0%). The performance of the stock market continues to be influenced by challenges in the macroeconomic space, hence furthering bargain hunting on attractive equities.

With the decision of the Monetary Policy Committee to reduce MPR from 13.0% to 11.0% and further ease CRR from 25.0% to 20.0% at the end of its sitting today, we believe investors may be spurred on by the imminent increase in liquidity in the financial market. Nevertheless, value seeking investors must tread cautiously while taking position in sessions ahead as capital market reactions unfold.