Sell Sentiment Drags Benchmark Index

At the close of trading on Monday, the All Share Index lost 8bps to close at 27,575.03 points while YTD loss increased marginally to 3.7%. In turn, investors lost N7.5bn as market capitalization settled at N9.5tn. Today’s market performance was largely dragged by UBN (-5.3%), PZ (-4.8%), and ETI (-1.7%). Conversely, activity level improved as volume and value traded rose 42.6% and 61.8% to settle at 101.2m units and N1.1bn respectively.

Industrial Goods index, Sole Gainer
Performance across sectors was broadly bearish as all indices closed lower save for the Industrial Goods index, up 37bps on the back of persistent bargain hunting in WAPCO (+1.1%). The Oil & Gas index (-0.6%) led sector decliners as sell pressure on OANDO (-3.3%) and MOBIL (-2.4%) dampened sector performance.  The Insurance index closed (-0.3%) lower on account of AIICO (-4.9%) and NEM (-4.8%) whilst the impact of the gains in ZENITH (+1.7%) on the Banking index (-0.3%) was offset by losses in UNION (-5.3%), ETI (-1.7%) and GUARANTY (-0.1%). ZENITH released its 9M: 2016 earnings scorecard earlier today, reporting a 12.9% and 20.4% Y-o-Y growth in gross earnings and PAT respectively. The Consumer Good index shed 2bps on the back of sell pressure on CADBURY (-9.5%) and PZ (-4.8%). Investors’ continue to react to CADBURY’s 9M: 2016 earnings report, in which the company posted a Loss After Tax of N842.2m.

Weakened Investor Sentiment
Dragged by a bearish outlook on Q3 earnings, investor sentiment weakened during today’s trading session as market breadth (advancers/decliners ratio) declined to 0.6x (from the previous 1.0x recorded on Friday) consequent on 11 advancing stocks against 19 decliners. The best performing stocks were CAVERTON (+4.7%), VITAFOAM (+2.3%) and WAPIC (+2.0%) while CADBURY (-9.5%), WEMA (-6.2%) and UBN (-5.3%) declined the most. Weakened macroeconomic fundamentals coupled with expectations of unimpressive earnings scorecards continue to drag investor sentiment in equities. Barring any positive news to stoke investor sentiment, we expect market to trade sideways in the sessions ahead.