Stock Market Closes Flat

The local bourse recorded a flat trading on Tuesday as the benchmark index shed 3bps to close at 25,266.15 points while YTD loss stayed at 6.0%. Rally in OANDO (+6.3%), which submitted FY:2016 result late yesterday, was offset by weak appetite for Tier-1 banks – ETI (-3.0%), UBA (-2.3%), GUARANTY (-0.6%) – as well as FORTE (-5.9%) to ensure the flattish close. Accordingly, investors lost N2.4bn as market capitalization settled at N8.7tn. However, activity level surged from yesterday’s low as volume and value traded jumped 84.5% and 137.3% to 180.2m units and N1.6bn respectively.

Mixed Sector Performance
Similar to the previous trading day, performance across sectors was mixed as 3 sector indices declined out of 5. The Banking index depreciated the most, dipping 0.6% on account of weak appetite for ETI (-3.0%), UBA (-2.3%) and GUARANTY (-0.6%). In the same vein, the Insurance and Oil & Gas indices also fell 0.3% and 0.1% due to sell-offs in MANSARD (-3.6%) and FORTE (-5.9%) which offset rally in NEM (+4.8%) and OANDO (+6.3%) respectively. OANDO released FY:2016 earnings result yesterday with Revenue up 124.0% to N455.7bn, while after-tax loss from continuing operation trimmed to N24.8bn from N34.9bn in FY:2015. On the flip side, the Industrial and Consumer Goods indices added 0.6% and 0.1% as a result of gains in CAP (+10.2%), NASCON (+10.2%), PZ (+4.2%) and CADBURY (+8.0%).

Market Breadth Retreats to the Negative Region
Investor sentiment drastically declined as market breadth waned to 0.9x (from 4.0x yesterday) on account of 18 advancing stocks relative to 19 decliners. The top gainers were CAP (+10.2%), NASCON (+10.2%) and LIVESTOCK (+10.0%) while FORTE (-5.9 %), HONYFLOUR (-4.8%) and MANSARD (-3.6%) were the top losers. Although today’s market performance was largely attributable to sell pressure on banking stocks, a side-ways trading pattern seems to be emerging as the earnings season draws to a close.  We expect the pattern to be sustained in the shorter term before investors start to position ahead of the Q1:2017 earnings declaration period.

NASD OTC Exchange Market Activities
In the NASD OTC exchange, the total volume and value of transactions traded were 40,700 units and N1.4m respectively while only 3 counters were traded today. The volume traded advanced 12.6% while value traded declined 72.5%.

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