Market Continues Fickle Run

The Nigerian equity market shed yesterday’s marginal gain at the close of trade on Wednesday as the All Share Index lost 1bp to close at 25,249.74 points. Similarly, market capitalization fell to N8.7tn as investors lost N655.9m. Today’s market performance was largely as a result of the impact of continuous depreciation in Consumer Goods bellwether – NESTLE (-4.0%) - and decline in GUARANTY (-1.6%) which offset the gains in NIGERIAN BREWERIES (+4.0%). Market activity also weakened as volume and value traded eased 9.7% and 34.7% to 118.5m and N1.8bn in 2,579 deals.
Mixed Performance across Sectors
Performance across sectors was largely bearish at the end of today’s trading session. The Consumer Goods index appreciated 0.9% as uptrend in NIGERIAN BREWERIES (+4.0%) and GUINNESS (+4.6%) offset the impact of the decline in NESTLE (-4.0%). NESTLE has depreciated 28.9% YTD as investors remain pessimistic on FY:2016 earnings. Similarly, the Oil & Gas index rose 0.1% as a result of the appreciation in OANDO (+2.3%). On the flip side, the Industrial Goods index (-1.0%) led sector decliners, owing to sell pressures on WAPCO (-2.3%) and CCNN (-3.0%) whilst the Banking (-0.4%) and Insurance (-0.5%) indices also trended southward on the back of weak appetite toward GUARANTY (-1.6%), ACCESS (-0.6%) and CONTINSURE (-4.6%).
Market Performance to Remain Soft
Investor sentiment remained weak today as indicated by the market breadth (advancers/decliners ratio) which closed at 0.4x - 7 stocks gained against 19 decliners. The best performing stocks were GUINNESS (+4.6%), NIGERIAN BREWERIES (+4.0%) and NEM (+2.5%) while the worst performers include UNILEVER (-5.0%), UACN (-4.9%) and UCAP (-4.9%). Market performance continues to be hampered by lingering investor pessimism on earnings result and weak macroeconomic fundamentals. In light of the foregoing, we expect the market to remain soft in tomorrow’s trading session.