Bears take Hold of Equities Market

The local bourse recorded losses at the close of trade on Tuesday as the All Share Index (ASI) fell 0.7% to 42,299.56 points while YTD return contracted to 10.6%. Performance was majorly dragged by sell offs in DANGCEM (-0.7%), ZENITH (-2.5%) and INTBREW (-4.8%). Accordingly, investors lost N100.5bn in value as market capitalization declined to N15.2tn. However, there was increased activity in the market as volume traded inched 14.0% higher to 438.7m units on the back of trades in TRANSCORP (45.1m), DIAMOND (41.6m), and FBNH (38.2m) while value traded advanced 60.8% to N8.8bn largely due to trades in NESTLE (N2.9bn), GUARANTY (N1.9bn) and NIGERIAN BREWERIES (N0.9bn).

Sector Performance Remains Mixed
Performance across sectors was mixed as 3 of 5 indices closed in the red. The Banking index depreciated the most, down 1.3% due to losses in ZENITH (-2.5%), GUARANTY (-0.8%) and UBN (-5.0%). The Industrial and Consumer Goods indices trailed, falling 1.1% and 0.2% respectively as investors sold off positions in DANGCEM (-0.8%), WAPCO (-2.5%), INTBREW (-4.8%) and HONYFLOUR (-3.1%).  On the flipside, the Oil & Gas index improved, up 0.9% following a rally in TOTAL (+6.9%) and CONOIL (+9.8%). Similarly, buying interest in NEM (+4.7%) and LINKASSURE (+2.3%) drove the Insurance index 0.3% higher.

Investor Sentiment Stays Soft
Market breadth (advance/decline ratio) which measures investor sentiment further weakened to 0.5x from 0.8x recorded the previous day consequent on 18 stocks advancing against 37 decliners. Leading advancers were UNITY (+9.8%), CONOIL (+9.8%) and MAYBAKER (+8.9%) while AFRIPRUD (-9.4%), UNIC (-7.4%) and MULTIVERSE (-6.1%) led laggards. Although sentiment has remained soft, we believe this is largely due to investors exiting penny stocks in order to position in bellwether counters that have historically paid dividend. Hence, we do not expect the current downtrend in the market to be sustained.