Equities Market Retreats

The Nigerian equities market opened the week lower, proving last Friday’s uptrend to be a “dead cat bounce”, on sustained sell offs in DANGCEM which further declined 7.0% today. The All Share Index fell 1.7% to 24, 581.99points while YTD loss worsened to 8.5%. Ex-DANGCEM, the benchmark index would have advanced 0.8%. Market capitalisation trimmed N148.8bn to N8.5tn with ACCESS (-3.7%) and 7UP (-9.5%) also dragging performance. Activity level weakened as volume and value traded fell 53.3% and 56.7% to 128.2m units and N1.5bn respectively.

Access Bank Releases FY:2016 Result
Performance across sectors was mixed as 3 indices advanced while 2 declined. The Consumer Goods index appreciated the most, up 3.7% as NESTLE (+10.0%) and NIGERIAN BREWERIES (+0.9%) buoyed the index. Similarly, the Oil & Gas index gained 3.3% on account of FORTE (+5.1%) while the Insurance index further improved 0.4%. On the flipside, the Industrial Goods index tumbled 5.9% as investors sold off on DANGCEM (-7.0%), the cement giant has depreciated 11.7% since its FY:2016 earnings was published last week.  In a related development, the Banking index slid 0.3% despite an impressive FY:2016 result submitted by ACCESS (-3.7%) today. The Tier-1 lender’s Gross earnings grew 13.0% Y-o-Y to N381.3bn while PAT expanded 8.5% Y-o-Y to N71.4bn and a dividend of N0.44 was proposed for the reporting period.

Investor Sentiment stays Soft
Investor sentiment softened today as market breadth stood at 0.8x following 15 stocks that advanced while 20 declined. The top gaining stocks were NESTLE (+10.0%), FORTE (+5.1%) and AIICO (+5.0%) while AFRIPRUD (-11.1%), 7UP (-9.5%) and DANGCEM (-7.0%) were the worst performing stocks. We expect market performance to be driven by further influx of FY:2016 earnings in the week. Nevertheless, we believe sentiment will remain constrained as investors continue to focus attention on key macroeconomic developments.