Bearish Sentiment Persists as Index Extends Losses

The equities market extended losses today as the All Share Index (ASI) dipped 0.4% to close at 36,165.93 points whilst YTD return pared to 34.6%. Consequently, investors lost N52.2bn as market capitalization settled at N12.5tn. Today’s performance was broadly dragged by price depreciation in DANGCEM (-1.1%), NIGERIAN BREWERIES (-1.0%), MOBIL (-5.0%) and OKOMUOIL (-5.0%). Also, market activity waned as volume and value traded slid 58.5% and 49.2% to settle at 144.5m units and N1.5bn respectively.

Banking Index Emerges Lone Gainer
Performance across sectors was bearish as all indices closed negative save for the Banking index which gained 0.3% consequent on positive sentiment towards GUARANTY (+0.8%) and STANBIC (+1.3%). STANBIC released its H1:2017 report today, which showed Gross Earnings and PAT rose 36.3% and 111.3% Y-o-Y to N97.2bn and N24.1bn respectively. The Bank also proposed an Interim dividend of N0.60 translating into a dividend yield of 1.5%. On the flip side, the Industrial Goods and Oil & Gas indices emerged top losers, down 0.5% apiece on account of losses in DANGCEM (-1.1%) and MOBIL (-5.0%) respectively. The Consumer Goods index followed, shedding 1.6%, against the backdrop of weak appetite for NIGERIAN BREWERIES (-1.1%) and GUINNESS (-1.4%) while the Insurance index marginally lost 1bp owing to a decline in LINKASSURE (-2.8%).

Investor Sentiment Remains Negative
Investor sentiment improved, although still negative as market breadth settled at 0.5x (from 0.3x yesterday) after 13 stocks advanced against 25 declining stocks. The best performing stocks were CHAMPION (+6.8%), NEIMETH (+4.7%) and CUTIX (+4.7%) while MOBIL (-5.0%), OKOMUOIL (-5.0%) and JBERGER (-5.0%) declined the most. As we noted yesterday, market performance remains largely driven by profit taking after the bullish streak witnessed during the earnings season. Nonetheless, we believe this trend will be reversed on account of bargain hunting in subsequent sessions.