Nigerian Bourse Opens Week Lower

The bearish trend in the equities market was sustained at the end of Monday’s trading session. The benchmark index declined 1.0% to close at 29,005.33 points whilst market capitalization dipped N104.2bn to settle at N9.7tn. Performance was broadly driven by sell-offs in DANGCEM (-0.5%), ZENITH (-3.1%), WAPCO (-4.3%), NIGERIAN BREWERIES (-0.8%) and FORTE (-5.0%). Market activity also continued to soften as volume and value traded declined 24.7% and 39.4% to close 142.8m units and N1.2bn respectively. 
 
All Sector Indices in the Red
Similar to the benchmark index, performance across sector indices was very bearish. Amidst a carnival of declines, the Industrial Goods index (-2.1%) was the worst performing index, pulled by the sell-offs in DANGCEM (-0.5%) and WAPCO (-4.3%). The Banking index (-1.1%) ended the day’s trading session as the second worst performing index on account of ZENITH (-3.1%), STANBIC (-4.4%) and ACCESS (-1.4%). The Consumer Goods index fell 0.9% as profit taking activities continued in NIGERIAN BREWERIES (-0.8%) and GUINNESS (-5.2%) whilst the Insurance and Oil & Gas indices declined 0.8% apiece on the back of the depreciation in MANSARD (-4.8%), CUSTODIAN (-3.7%), FORTE (-5.0%) and TOTAL (-4.5%).
 
Investor Sentiment Softens
Investor sentiment weakened further today as market breadth (measured by advancers/decliners ratio) softened to 0.3x (from 0.7x on Friday) owing to 10 advancing stocks against 31 declining stocks. OANDO (+10.2%) led today’s top gainers. The rally in OANDO was broadly buoyed by the announcement of its recapitalization and partial divestment of 51.0% equity stake in its downstream operations to Helios and Vitol. VANLEER (+5.0%) and REDSTAREX (+4.9%) followed as the second and third best performing stocks while SKYE (-9.5%), HONYFLOUR (-6.2%) and GUINNESS (-5.2%) declined the most. We expect market performance to remain soft on Thursday. However, we do not rule out a rebound at the end of the week as investors hunt for bargains in stocks currently being dumped in the market amid Q2:2016 earnings expectation.

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