Local Bourse Extends Losses into 8th Consecutive Session

The local bourse extended losses from last week into Monday’s trading session as the All Share Index (ASI) dipped 0.7% - its 8th consecutive daily decline - to settle at 39,040.44 points while YTD return further moderated to 2.1%. Consequently, investors lost N106.9bn as market capitalization fell to N14.1tn. Sell pressures in banking stocks - GUARANTY (-2.3%), ZENITH (-2.1%) and FBNH (-4.6%) – were largely responsible for today’s bearish performance. Activity level softened as volume and value traded declined 24.9% and 44.8% to 222.3m units and N1.6bn respectively. The top traded stocks by volume were AIICO (40.8m), ACCESS (27.4m) and FBNH (26.5m) while the top traded stocks by value were ACCESS (N292.1m), FBNH (N245.6m) and ZENITH (N238.3m).

Bearish Sector Performance
In line with market performance, sector performance was bearish as all 5 indices under our coverage closed southwards. The Industrial Goods index led laggards down 2.1%, on the back of selloffs in WAPCO (-4.9%) and CAP (-5.3%) which outweighed gains in DANGCEM (+0.4%). Similarly, the Banking and Insurance indices shed 2.0% and 1.1% respectively as sell pressures in GUARANTY (-2.3%), ZENITH (-2.1%), WAPIC (-7.7%) and LINKASSU (-4.8%) dragged both indices. Furthermore, the Consumer Goods index lost 0.1% as price depreciation in NIGERIAN BREWERIES (-0.4%) and DANGFLOUR (-3.9%) offset gains in FLOURMILLS (+2.0%) and DANGSUGAR (+0.3%) while the Oil & Gas index fell 2bps due to losses in 11PLC (-4.6%) and OANDO (-4.8%).

Investor Sentiment Remains Unchanged but Weak
Investor sentiment as measured by market breadth (advance/decline ratio) remained flat at 0.3x as 10 stocks advanced against 35 stocks that declined. HMARKINS (+6.7%), ETERNA (+4.9%) and IKEJAHOTEL (+4.7%) led the gainers today while FCMB (-9.1%), JAPAULOIL (-8.3%) and WAPIC (-7.7%) declined the most. We believe the current bearish sentiment will continue till midweek, however, we expect investor’s bargain hunting activities on some oversold bellwether securities to buoy market performance from Wednesday.