Large Cap Sell-off Extends to 6th Session

The broader index on Monday extended losses to the 6th trading session. This is on account of sell pressures on bellwether stocks in the Oil & Gas and Industrial Goods sectors which offset bargain hunting in the small- to mid-cap segment.

The All Share Index (ASI) dipped 0.1% to close at 27,629.90 points while YTD performance further waned to -3.5%.  Sell-off in FORTE (-9.7%), SEPLAT (-5.0%) and DANGCEM (-2.5%) dragged market performance. Investors lost a total of N10.1bn today as market capitalization fell to N9.5tn. Activity level in the market improved as volume and value traded rose 48.0% and 7.3% to close at 378.5m units and N2.3bn respectively.
Mixed Performance across Sectors
Performance across sectors was mixed today as 3 sector indices advanced while 2 declined. The Consumer Goods index appreciated the most, up 2.1% following sustained buying interest in NIGERIAN BREWERIES (+5.0%). Similarly, the Banking and Insurance indices trended 1.7% and 0.5% northwards respectively on account of gains in ETI (+5.0%) and ZENITH (+1.8%) for the former and CUSTODYINS (+5.0%) and MANSARD (+4.6%) for the latter. On the flipside, price depreciation in FORTE (-9.7%) and SEPLAT (-5.0%) pulled the Oil & Gas index 3.9% into the red while the Industrial Goods index fell 1.6% on sell pressure in DANGCEM (-2.5%).
Sentiments Turn Positive
Investor sentiment strengthened today as evident in the market breadth which settled at 1.5x (from 0.2x on Friday) following 26 stocks that advanced while 17 declined. OANDO (+9.9%) topped the gainers’ chart on the back of bargain hunting by investors followed by TRANSCORP (+9.6%) and UCAP (+5.3%). while FORTE (-9.7%) depreciated the most due to profit taking, followed by SEPLAT (-5.0%) and AVONCROWN (-4.8%).

The retracement in sentiment to the positive region notwithstanding, we think investors’ interest in equities will remain soft in the shorter term due to increasing yields in fixed income market which has increased opportunity cost of investing in equities as well as weak market outlook for Q2:2016 earnings.