Profit Taking Drags Market Performance Down

Trading session started on a flat note today but turned negative at the close of trade as the All Share Index fell 1.1% to settle at 42,843.38 points while YTD return contracted to 12.0%. Profit taking in DANGCEM (-1.8%), NIGERIAN BREWERIES (-3.6%) and GUARANTY (-2.0%) weighed heavily on today’s performance. Consequently, investors lost N174.8bn in value as market capitalization fell to N15.4tn. Similarly, activity level declined as volume and value traded fell 35.0% and 54.9% to 371.2m units and N4.9bn respectively. TRANSCORP (40.4m), ZENITH (40.0m) and GUARANTY (31.0m) were the most traded stocks by volume while GUARANTY (N1.5bn), ZENITH (N1.3bn), and NIGERIAN BREWERIES (N0.3bn), were the top traded stocks by value.

Mixed Sector Performance
Performance was mixed across sectors as 3 indices declined while 2 advanced. The Oil & Gas index led gainers, rising 1.0% primarily due to price appreciation in SEPLAT (+2.2%) and MOBIL (+0.1%). The Insurance index trailed up 0.1% as NEM (+2.4%) and HMARKINS (+3.9%) recorded gains. On the flipside, the Industrial Goods index declined 2.2% as investors took profit in DANGCEM (-1.8%) and WAPCO (-3.5%). The Banking (-1.1%) and Consumer Goods (-0.7%) indices also trended southwards, dragged by sell offs in GUARANTY (-2.0%), ZENITH (-1.3%), NIGERIAN BREWERIES (-3.6%) and HONYFLOUR (-1.8%).

Investor Sentiment Softens
Investor sentiment measured by market breadth (advance/decline ratio) softened to 0.7x from 1.4x recorded the previous day as 28 stocks advanced while 31 stocks declined. JAPAUL OIL (+7.4%), FIRSTALU (+4.7%) and CONTINSURE (+4.4%) were the top advancers while VITAFOAM (-5.0%), FTNCOCOA (-5.0%) and SOVERININ (-4.7%) declined the most. Whilst market volatility today was triggered by profit taking in bellwethers that gained in previous trading sessions, analysts at Afrinvest expect investors to reposition in anticipation of FY:2017 results.