Equities Remain Bearish as Banking Stocks Decline

The negative trend in the equities market was extended into the third consecutive trading day as the All Share Index (ASI) fell 1.1% to close at 32,410.20 points whilst YTD gain further moderated to 20.6%. Accordingly, market capitalization declined by N162.2bn to settle at N11.2tn. The poor performance was majorly attributable to price decline in NIGERIAN BREWERIES (-1.9%) as well as banking counters - UBA (-5.8%), GUARANTY (-1.3%), ETI (-4.9%), STANBIC (-3.0%), FBNH (-3.4%) and ACCESS (-2.3%). However, market activity improved as volume and value traded rose 27.0% and 12.2% to settle at 206.1m units and N1.7bn respectively.

Sectors Close in the Red
Sector performance was bearish as all indices closed in the red save for the Industrial Goods index which marginally added 1bp due to gains in FIRSTALUM (+3.5%). The Banking index depreciated the most, down 2.3% as investors continue to take profit in Tier-1 and Tier-2 lenders. The Consumer Goods index followed suit, losing 1.2% due to declines in NIGERIAN BREWERIES (-1.9%) and GUINNESS (-4.9%). Similarly, the Oil & Gas index trailed with a 1.1% loss on account of depreciations in CONOIL (-4.9%) and OANDO (-1.6%) while the Insurance index shed 11bps due to profit taking in NEM (-1.9%).
 
Sentiment Remains Weak
In line with market performance, investor sentiment was soft as reflected in the market breadth (advancers/decliners ratio) which stayed flat at 0.3x - 10 stocks advanced while 30 declined. REDSTAREX (+10.1%), HONYFLOUR (+9.8%) and SKYE (+4.8%) led the gainers chart while NEIMETH (-8.5%), UBA (-5.7%) and FLOURMILL (-5.1%) led laggards. As we noted yesterday, market performance remains driven by profit taking after the sustained rally over the last 3 months. Nonetheless, we believe this negative trend will be reversed on account of bargain hunting in subsequent sessions.

NASD OTC Exchange Market Activities
In the NASD OTC exchange, Seven counters traded with total volume and value of transactions closing at 1.2m units and N23.1m respectively. WAMCO (+8.8%) closed in the green while CSCS (-6.4%) closed in the red. GEO-FLUIDS, GOLDEN CAPITAL, RESOURCE, TRUSTBOND and NDEP closed flat.

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