Local Bourse Maintains Downward Trend

The local bourse maintained a downward trend at the start of the week as the All Share Index (ASI) slid 21bps to 41,845.92 points while YTD return contracted to 9.4%. As a result, investors lost N32.2bn in value as market capitalisation decreased to N14.9tn. The bearish performance of the market today was primarily due to profit taking in large cap stocks - NIGERIAN BREWERIES (-3.4%), ETI (-4.8%) and STANBIC (-2.0%). Similarly, activity level declined as volume and value of shares traded fell 23.4% and 25.9% to 326.9m units and N5.3bn respectively. The top traded stocks  by volume were ZENITH (128.9m), FBNH (23.8m) and FIDELITY (16.7m) while ZENITH (N3.5bn), GUARANTY (N0.4bn) and FBNH (N0.3bn) were the top traded stocks by value.

Industrial Goods Index Emerges Lone Gainer
Sector performance was largely bearish as 4 of 5 indices under our coverage closed in the red.  The Industrial Goods index was the lone gainer, up 0.5% largely due to buying interest in DANGCEM (+0.4%). On the flipside, the Insurance index was the biggest loser, down 2.8% following sell offs in CONTINSURE (-4.7%) and WAPIC (-5.0%). The Banking index trailed, shedding 2.1% on account of price depreciation in ETI (-4.8%). Likewise, the Consumer Goods and Oil & Gas indices fell 1.8% and 0.6% respectively as investors booked profit in NIGERIAN BREWERIES (-3.4%), DANGFLOUR (-4.8%) and TOTAL (-5.7%).

Investor Sentiment Remains Soft
Investor sentiment, measured by market breadth (advance/decline ratio) stayed flat at 0.4x as 14 stocks advanced while 34 stocks declined. The best performing stocks were CILEASING (+9.9%), UCAP (+5.6%) and NEM (+4.8%) while the worst performers were CADBURY (-9.6%), NIGERINS (-9.5%) and UNITY (-8.9%). Despite the largely positive corporate earnings which have been released, market performance has remained negative, nevertheless, analysts at Afrinvest envisage bargain hunting opportunities in the near term. Their view is further buttressed by the Relative Strength Index (RSI) of the ASI which currently stands at 38.9 (closer to the oversold region).