Equities Halt Bullish Run on Profit Taking

The Nigerian equities market halted its 9-day bullish run today as the benchmark index slid 1.2% to close at 32,200.38 points, paring YTD return to +19.8%. Today’s performance was dragged by profit taking in market heavyweights - DANGCEM (-5.0%), MOBIL (-9.7%), UNILEVER (-4.5%) and GUARANTY (-0.3%). As a result, investors lost N130.7bn in value as market capitalization retreated to N11.1tn. Activity level was however mixed as volume traded rose 16.3% to 745.0m units while value traded dipped 15.1% to close at N6.5bn.

Mixed Performance across Sectors
Performance across sectors was mixed as 3 of 5 indices appreciated. The Consumer Goods index led sector gainers, up 0.9% on account of price appreciations in NESTLE (+1.1%) and DANGSUGAR (+5.0%) while upticks in ACCESS (+0.5%) and ETI (+0.8%) drove the Banking index to close 0.3% higher. Similarly, the Oil & Gas index gained 0.2% on the back of gains in SEPLAT (+5.0%) and OANDO (+2.4%). On the flip side, the Industrial Goods index fell 0.8% due to profit taking in DANGCEM (-5.0%) while the Insurance index slid 0.2% on account of depreciations in MANSARD (-4.4%) and CUSTODYINS (-1.5%).

Market Breadth Moderates but Still Positive
Investor sentiment as mirrored by the market breadth (advancers/decliners’ ratio) declined from 3.7x yesterday to 1.8x - 38 advancers to 21 decliners. The best performing stocks were STERLING (+9.8%), MAYBAKER (+9.7%) and CHAMPION (+9.2%) while MOBIL (-9.7%), NPFMCRFBK (-5.0%) and DANGCEM (-5.0%) were the worst performers. Quite in line with our expectation, investors resorted to profit taking on some value stocks that witnessed continuous appreciations during the bullish run. Notwithstanding, we expect the profit taking to be transient as market breadth remains positive – reflecting subsisting strong appetite for equities across board - while performance continues to be dictated by improvements in the macroeconomic fundamentals.