Weekly Market Report –Week Ended Feb. 05, 2016

Similar to global trend, the Nigerian equities market was broadly bearish this week. Save for the 3bps appreciation on Tuesday which was spearheaded by a late rally in DANGCEM, the benchmark index closed in the red on all other trading days of the week. Market performance was dawdled by profit taking, thus W-o-W return dipped 1.7% and YTD loss worsened to 17.9% as the NSEASI settled at 23,501.87 points on Friday. Following the increased sell sentiment in the market during the week, activity level strengthened as average volume and value traded appreciated 327.9% W-o-W and 32.9% W-o-W to 969.3m units and N2.5bn respectively.
 
Performance across sectors was mixed. The Oil & Gas index advanced the most, up 4.0% W-o-W, consequent on price appreciation in SEPLAT (+25.1%) and MOBIL(+5.1%). Similarly, the Insurance Index improved 0.9% W-o-W due gains in CONTISURE (+5.3%) and NEM (+4.4%). Contrarily, sell offs in NESTLE (-5.0%) and NB (-4.0%) drove the Consumer Goods index 3.2% southwards W-o-W. Likewise, the Industrial Goods and Banking indices fell 2.1% and 0.7% W-o-W on account of losses in DANGCEM (-3.6%) and GUARANTY (-4.8%).

Market sentiment also worsened this week as market breadth -measured by advancers/decliners ratio- settled at 0.7x (against previous of 1.2x) as 28 stocks gained while 40 stocks lost. The best performing stocks for the week were INTBREW (+27.8%), SEPLAT (+25.1%) and AGLEVENT (+8.7%) while GLAXOSMITH (-14.2%), UNILEVER (-13.9%) and UNITYBANK (-12.0%) declined the most. In light of the diminishing investors’ confidence, our short term outlook remains bearish though we believe that market performance in the interim will be driven by investors’ reaction to corporate earnings releases that .

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