Bellwethers Drag Market Performance into Negative Territory

Losses in market bellwethers - DANGCEM (-3.5%), GUARANTY (-2.9%), and WAPCO (-4.1%) - dragged the ASI down 1.6% to 40,855.64 points on Tuesday, reverting its positive close the previous session. As a result, YTD gain dropped to 6.8% while market capitalization fell to N14.8tn as investors lost N234.4bn. On the contrary, activity level improved as volume and value traded rose 34.8% and 68.8% to 364.8m units and N6.3bn respectively. ZENITH (88.2m), TRANSCORP (60.0m) and STERLING (40.5m) led the top traded stocks by volume chart while ZENITH (N2.6bn), NIGERIAN BREWERIES (N1.2bn) and NESTLE (N0.6bn) were the top traded stocks by value.

Broad Based Sell-Offs Across Sectors
Sector performance was equally bearish as all indices under our coverage closed in the red. Leading the bearish performance was the Industrial Goods index, which shed 3.4%, due to profit taking in DANGCEM (-3.5%) and WAPCO (-4.1%). The Consumer Goods and Oil & Gas indices followed suit, closing  0.6% and 0.5% lower respectively on account of losses in NIGERIAN BREWERIES (-0.9%), DANGSUGAR (-3.7%), FORTE (-2.9%) and MOBIL (-0.4%). Similarly, the Banking index slid 0.4% as investors sold off position in GUARANTY (-2.9%) and UBA (-0.9%). Also, sell offs in MANSARD (-1.2%) and LINKASSURE (-4.8%) drove the negative performance of the Insurance index (-0.1%).

Investor Sentiment Weakens
Investor sentiment measured by market breadth (advance/decline ratio) weakened to 0.3x from 0.9x recorded the previous week as 11 stocks advanced relative to 37 stocks that declined. Top performing stocks for today were CAVERTON (+9.0%), LAWUNION (+4.1%) and NEM (+4.0%) while FIDELITY (-9.3%), TRANSCORP (-9.2%) and JAPAUL OIL (-6.8%) led the laggards list. Today’s bearish performance was largely driven by investors booking profit in previous decliners. However, we expect bargain hunting to buoy performance in subsequent trading sessions.