Equities Retreat as Manufacturing Stocks Slide

The Nigerian bourse was unable to sustain the positive trend maintained since the start of the week as the All Share Index (ASI) trimmed a marginal 3bps today to close at 28,027.23 points. Accordingly, market capitalisation declined N2.4bn to close at N9.6tn as sell pressure was renewed on NESTLE (-2.4%), WAPCO (-2.7%), DANGSUGAR (-2.7%) and FLOURMILL (-3.1%). Also, activity level softened as volume and value traded fell by 5.3% and 47.3% to settle at 155.6m units and N1.4bn respectively. Total deals transacted moderated to 3,277 from the previous 3,335 deals recorded on Tuesday.

Oil & Gas Sector Leads Sector Gainers for the 2nd Session
Despite the marginal decline in benchmark index, sector performance remained mixed as 3 sector indices advanced while 2 declined. The Industrial Goods index fell 0.9% on the back of losses in WAPCO (-2.7%), while the Consumer Goods index trailed with a 0.6% decline on account of weakened sentiment in FLOURMILL (-3.1%), DANGSUGAR (-2.7%) and NESTLE (-2.4%). On the gainers side, the Oil & Gas index topped the chart, up 1.5% on sustained rally in SEPLAT (+5.0%). Similarly, the Banking index closed 0.7% higher due to gains in UBA (+3.1%), GUARANTY (+0.6%) and ZENITH (+0.4%) while the Insurance index reversed a 3-day bearish trend to rebound 0.2%on account of WAPIC (+4.0%).

Investor Sentiment Remains Weak
Investor sentiment remained weak today as market breadth settled at 0.7x (from 0.6x yesterday) after 13 stocks advanced against 20 declining stocks. The best performing stocks today were CAVERTON (+8.6%), SEPLAT (+5.0%) and GUINNESS (+4.9%) while UAC-PROP (-9.4%), ETRANZACT (-4.9%) and LEARNAFRCA (-4.8%) were the worst performers. We expect the market to remain soft – as shown by persistent weak breadth and trading volumes - for the remainder of the week in the absence of more earnings releases.