Equities Buck Bullish Trend

The All Share Index was unable to sustain the gaining trend which has persisted since the start of the week as the ASI fell 0.1% to close at 27,420.99 points. Consequently, market capitalisation declined by N5.6bn to settle at N9.4tn.Today’s performance was dragged by sell-offs in GUARANTY (-1.2%), GUINNESS (-3.8%), UNION BANK (-4.8%) and TRANSCORP (-4.6%). Contrarily, market activity improved as volume and value traded advanced by 5.3% and 57.4% to settle at 313.3m units and N3.6bn respectively.

Industrial Goods Index Emerges Lone Gaining Sector
Performance across sectors was mainly bearish but for the Industrial Goods index which emerged the sole gaining sector, up 0.5% on account of gains in WAPCO (+1.3%). The Consumer Goods Index fell 0.2% due to price depreciation in GUINNESS (-3.8%) and DANGSUGAR (-0.6%). The Oil & Gas Index followed suit with a loss of 0.1% due to profit taking in MOBIL (-1.0%) and TOTAL (-0.8%). Similarly, the Banking and Insurance indices closed in the red, falling 0.7% apiece against the backdrop of losses in GUARANTY (-1.2%), UNION BANK (-4.8%) and AIICO (-4.5%).

Investor Sentiment Weakens
Investor sentiment deteriorated today as market breadth retreated to 0.9x (from 1.3x yesterday) after 16 stocks advanced against 18 declining stocks. The best performing stocks today were NEM (+5.0%), ETERNA (+4.8%) and LIVESTOCK (+4.4%) while UAC-PROP (-4.9%), UNION BANK (-4.8%) and SKYEBANK (-4.5%) were the worst performers. We are of the view that today’s bearish performance can be attributed to profit taking after 3 consecutive days of gains. Nevertheless, we expect the market to close in the green for the week.