Profit Taking Drags Benchmark Index Lower

The equities market bucked two consecutive days of gains as the All Share Index (ASI) marginally trimmed 5bps to close at 28,248.86 points. Consequently, market capitalisation declined by N4.9bn to settle at N9.7tn. Market activity was however mixed as volume traded rose 18.1% to settle at 294.9m units, while value traded declined 27.9% to close at N1.4bn. In turn, total deals transacted decreased to 3,142 from the previous 3,170 deals recorded on Monday.

Banking Index Rebounds
Performance across sectors was broadly positive but for the Oil & Gas index which emerged the sole decliner of all sector indices, down 0.9% as further profit-taking in CONOIL (-7.7%) and OANDO (-4.8%) continues to drag sector performance. The Insurance index gained 0.4% on the back of price appreciation in LAWUNION (+7.0%) and CONTINSURE (+3.1%). The Consumer Goods index followed suit, up 0.3% due to bargain-hunting in GUINNESS (+5.0%) and FLOURMILL (+4.6%).  Similarly, the Banking index rebounded from a 3-day losing streak to gain 0.1% on account of WEMA (+4.5%) and ZENITH (+0.9%). Industrial Goods index closed flat.
 
Market Breadth Improves but Still Negative
Investor sentiment improved today as market breadth settled at 0.9x (from 0.7x yesterday) after 18 stocks advanced against 20 declining stocks. The best performing stocks today were UAC-PROP (+10.0%), LAWUNION (+7.0%) and GUINNESS (+5.0%) while ASHAKACEM (-9.7%) PRESCO (-8.9%) and CAVERTON (-8.4%) declined the most. Today’s weak performance of the benchmark index despite improvement in sentiment can be attributed to profit taking in Oil & Gas counters which offset the impact of portfolio managers positioning in other sectors ahead of month-end portfolio rebalancing. Yet, market performance continues to fluctuate in margins and is expected to remain soft in the short term in the absence of any major trigger.

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