Nigerian Bourse Turns Bearish to End 8-day Gaining Streak

Photo L-R: Lucy Newman, Managing Director/CEO, FITC; Abimbola Akeredolu, immediate past Attorney General of Ogun State; Oscar Onyema, Chief Executive Officer, The Nigerian Stock Exchange (NSE); Idiat Adebule, Deputy Governor of Lagos State; and Tinu Awe, NSE General Counsel/Head, Legal and Regulation Division at the NSE 2016 International Women’s Day Celebration at the Exchange today.

The Nigerian equities market ended an 8-day gaining streak (after cumulatively returning 8.4%) today as the All Share Index depreciated 0.5% to close at 25,755.01 points. Market capitalization in turn also decreased N46.8bn to close at N8.9tn widening YTD loss to 10.1%. Today’s negative performance was on account of profit taking in DANGCEM (which lost 2.9%) – an Industrial Goods bellwether. Ex-DANGCEM, market would have been up   0.6%. Activity level strengthened as volume and value traded grew 25.2% and 7.9% to close at 233.4m units and N1.4bn respectively.

Banking Sector Leads Sector Advancers
The rally in UBA (+8.1%) coupled with gains  in GUARANTY (+1.3%) pulled the Banking Index up 1.3% to lead sector gainers while the Insurance and Oil & Gas Indices trailed closely, up 0.7% and 0.6%, amid bargain hunting in MANSARD (+2.8%) and OANDO (+10.1%) respectively. On the flip side, losses in DANGCEM (-2.9%) and NB (-2.0%) dragged the Industrial and Consumer Goods indices 0.4% lower apiece.

Sentiments Remain Positive
Positive sentiments in the market persisted as market breadth - measured by the advancers and decliners ratio - improved to 2.0x (against 1.8x yesterday). A total of 24 stocks advanced against 12 declining stocks. OANDO (+10.1%), TIGERBRANDS (+9.5%) and UBA (+8.1%) led the gainers while NPFMCRFBK (-4.5%), DANGCEM (-2.9%) and NEM (-2.7%) topped the losers’ chart. We expect mixed performance for this week as more corporate announcements and profit taking activities will likely swing market sentiments sideways. In the interim, we reiterate our stance that investors buy into stocks of companies with consistent dividend payment history ahead of their earnings releases.