Local Bourse Sustains Bearish Sentiment

At the close of trade today, the All Share Index recorded a 2.3% decline to settle at 37,096.60 points as profit taking further hits the market. Performance was largely dragged by negative sentiment towards DANGECEM (-4.3%) as well as profit taking in NIGERIAN BREWERIES (-1.6%), STANBIC (-5.0%), GUARANTY (-1.5%) and WAPCO (-4.8%). Consequently, Year-to-date gain pared to 38.0%. Accordingly, investors lost N294.5bn as market capitalization settled at N12.8tn. However, market activity improved as volume and value traded surged 23.9% and 28.7% to settle at 391.6m units and N5.4bn respectively.

All Indices Close In the Red
Performance across sectors was largely bearish as all indices under our coverage closed in the red. The Industrial Goods index waned the most, down 4.2% owing to a decline in the price of DANGCEM (-4.3%) while the Banking index followed, shedding 1.2% on account of losses in STANBIC (-5.0%) and GUARANTY (-1.5%). Likewise, the Insurance and Consumer Goods index dipped 1.0% apiece on the back of sell pressures on MANSARD (-4.7%) and NIGERIAN BREWERIES (-1.6%) while negative sentiment towards FORTE (-4.6%) and OANDO (-1.4%) dragged the Oil & Gas sector 0.4% lower.

Investor Sentiment Further Wanes
Market breadth significantly declined to 0.3x (from 0.7x recorded yesterday). Thus, investor sentiment waned today as 11 stocks advanced against 35 losers. The best performing stocks were GLAXOSMITH (+5.0%), BERGER (+5.0%) and GOLDBREW (+4.7%) while MORRISON (-8.2%), PZ (-5.0%) and STANBIC (-5.0%) were the worst performers. Whilst the performance today was dragged by profit taking in value stocks that had appreciated in the previous weeks, we do not expect the downtrend to persist beyond the short term as positive developments in the economy continue to bolster investors’ appetite for equities.