Equities Kick-Start the Year Bearish

The Nigerian Equities market got off the year to a negative start as the All Share Index (ASI) lost 96bps to close on Tuesday at 26,616.89 points. Accordingly, market capitalisation contracted by N88.7bn to settle at N9.2tn. Today’s performance was dragged by losses in NIGERIAN BREWERIES (-4.1%), GUARANTY (-2.8%) and ZENITH (-2.4%). However, activity level was mixed as volume traded marginally rose 0.1% to settle at 106.4m units while value traded declined by 20.5% to close at N1.2bn.

Insurance Index Sole Gainer amidst Sell-offs across Sectors
Sector performance was largely bearish as all indices closed lower but for the Insurance index which advanced 30bps on the back of gains in WAPIC (+4.0%) and MANSARD (+1.2%). The Banking index tumbled 2.4% as investors booked profit in GUARANTY (-2.8%) and ZENITH (-2.4%). In the same vein, the Consumer Goods index closed 1.9% lower on account of losses in CADBURY(-5.0%) and NIGERIAN BREWERIES (-4.1%) while the Oil & Gas index fell 49bps due to profit taking in OANDO (-4.9%) and FORTE (-0.3%). Similarly, the Industrial Goods index lost 18bps as investors sold-off on CCNN (-5.0%) and BETAGLAS (-4.4%).

Sentiment Weakens on Profit-taking
Investor sentiment weakened today as market breadth retreated to 0.7x (from 1.4x on Friday) after 13 stocks advanced against 18 which declined. The best performing stocks today were UAC-PROP (+5.0%), STANBIC (+4.9%) and WAPIC (+4.0%) while CCNN (-5.0%), ETI (-5.0%) and CADBURY (-5.0%) were the worst performers.

Afrinvest Research, in its dealers' perception note, stated that "Given the uptrend witnessed in the Benchmark index towards the tail end of 2016, today’s negative close can be linked to profit-taking in counters which had previously appreciated. We expect sentiment to remain weak in the interim as equities work off the breath-taking rally of the previous month."

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