Investors' Sell-offs Drags Down Market Performance

On Monday, investors' in ZENITH (-1.6%), GUARANTY (-1.8%) and DIAMONDBNK (-9.4%) lowered the benchmark index by 0.2% to 32,143.41 points as market capitalisation also shed N27.5bn to settle at 11.7tn while YTD loss worsened to -15.9%. However, activity level was mixed as volume traded increased by 17.0% to 142.0m while value traded dropped by 2.0% to N1.6bn. DIAMONDBNK (32.2m units), GUARANTY (20.0m units) and UBA (N16.1m units) were top traded by volume while GUARANTY (N738.1m), ZENITH (N285.2m) and UBA (N128.3m) were top traded stocks by value.
Bearish Sector Performance
Performance across sectors was bearish as only 2 of 5 indices under our coverage closed in the green. The Oil & Gas and Consumer Goods indices appreciated 0.7% and 0.2% respectively, following buying interests in OANDO (+6.5%), FLOURMIL (+7.1%) and HONYFLOUR (+2.9%). On the flip side, the Insurance index declined the most, down 1.3% on the back of price depreciation in NEM (-8.2%). Similarly, the Banking index trailed, following sell-offs in DIAMONDBNK (-9.4%), ZENITH (-1.6%) and GUARANTY (-1.8%) while the Industrial Goods index closed flattish as gains in VITAFOAM (+2.2%) failed to buoy the index.

Investor Sentiment Weakened
Investor sentiment as measured by market breadth (advance/decline ratio) slightly weakened to 1.2x from 1.3x recorded last Friday as 14 stocks advanced against 12 that declined. REGALINS (+10.0%), UNIONDAC (+8.0%) and FLOURMILL (+7.1%) were today's outperforming stocks while ABBEYBDS (-9.4%), DIAMONDBNK (-9.4%) and NEM (-9.4%) were the worst performing stocks. Against our expectation, the bearish trend from last week was sustained in today's session. However, we opine that this trend will persist till midweek while maintaining our bearish market outlook over the near term.