Bearish Sentiment Dampens Market Performance

With investors sentiment dampened by a mixture of credit ratings downgrade by Fitch Ratings as well as the outcome of the BREXIT referendum, the Nigerian equities market Monday started the week lower.

The All Share Index declined 2.6% to close at 29,843.79 points as market capitalization contracted N278.0bn to close at N10.2tn. The benchmark index was dragged by sell-offs in DANGCEM (-4.0%), GUARANTY (-4.8%) and ZENITH (-6.1%). Market activity also weakened as volume and value traded declined 18.7% and 8.3% to close at 361.2m units and N4.0bn respectively.
 
Sell-offs Impact Sector Performances
All the sector indices depreciated today save for the Insurance index which rose 0.3% on the back of the 2.7% and 0.8% uptrend in CONTINSURE and NEM. The Banking index was the worst performing index as profit taking in GUARANTY (-4.8%), ZENITH (-6.1%) and STANBIC (-5.0%) dragged the index southward. Similarly, the Oil & Gas and Industrial Goods indices declined 3.6% and 2.5% respectively as a result of depreciation in DANGCEM (-4.0%), FORTE and SEPLAT (-5.0% apiece). The Consumer Goods index (-0.6%) also ended the day in the red zone as investors took profit in NIGERIAN BREWERIES (-0.7%) and FLOURMILL (-4.5%).
 
Watered Investor Sentiment
Market breadth (advancers/decliners ratio) closed at 0.4x owing to 16 advancing stocks against 40 declining stocks. FIDSON (+9.9%), JBERGER and GLAXOSMITH (+5.0% apiece) led the gainers while UCAP (-7.9%), ZENITH (-6.1%) and STANBIC (-5.0%) led the laggards. We believe the profit taking activities may continue tomorrow but we expect the market to regain uptrend by midweek as investors shake off the bearish sentiments and reposition ahead of Q2:2016 earnings scorecard releases.

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