Bears Defiant in the Nigerian Bourse

The equity market extended its bearish trend to the 6th consecutive session at the end of today’s trade as investors continued to selloff across board. The benchmark index dipped 72bps to close at 26,173.69 points whilst market capitalization pared N65.6bn to settle at N9.0tn. Consequent on the selloff, the ASI YTD loss worsened to 8.6%. Today’s negative close was largely on the back of sell pressure in bellwether Banking & Consumer Goods equities - GUARANTY (-3.5%), ZENITH (-2.8%), ACCESS (-4.6%), PZ (-8.4%) and NIGERIAN BREWERIES (-0.4%). GUARANTY has been under intense selling pressure over the past two weeks, trending southwards for the 6th consecutive trading session and down 12.5% within the period. In the same vein, market activity weakened today as volume and value traded fell 22.7% and 35.3% to close at 146.1m units and N1.0bn respectively.
 
Close Shave for the Oil & Gas Index
Today’s sector performance highlighted the general mood in the market as all indices declined save for the Industrial Goods index (+10bps) which was buoyed by the 4.1% uptrend in CAP and the Oil & Gas index which rose 8bps due  to bargain hunting in OANDO (+1.0%). The Banking and Insurance indices shed 3.0% and 1.3% respectively on the back of the decline in GUARANTY (-3.5%), ZENITH (-2.8%), ACCESS (-4.6%), MANSARD (-4.2%) and CONTINSURE (-4.9%) whilst the Consumer Goods index dipped 39bps as a result of the depreciation in PZ (-8.4%), NIGERIAN BREWERIES (-0.4%) and FLOURMILL (-5.0%)
 
Attractive Prices to Trigger Bargain Hunting
Investor sentiment took a beating today as market breadth (advancers/decliners ratio) closed at 0.4x (from 0.5x yesterday) owing to 11 advancers against 27 decliners. CAP (+4.1%), DANGSUGAR (+2.9%) and UPL (+2.6%) led the gainers while PZ (-8.4%), FLOURMILL (-5.0%) and NASCON (-4.9%) led the laggards. We expect the sustained sell pressure in the Bourse - which has weighed on market valuation - to trigger bargain hunting towards the end of the week. Nonetheless, the current risk off mode in global markets, underlined by the unexpected outcome in the US Presidential election, may continue to keep sentiment tepid.   

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