Stock Market Starts Week on Bearish Note

The Nigerian equities market started the week on a bearish note. The NSE-ASI declined 14bps to close at 28,815.32 points while the market capitalization contracted N14.2bn to settle at N9.8tn.

Afrinvest Research noted that Monday’s performance was as a result of major sell-offs in WAPCO (-5.0%), DANGCEM (-0.2%) and OANDO (-7.5%). Market activity improved as volume and value increased by 17.2% and 50.2% after a total of 275.4m units of stocks worth N3.4bn exchanged hands.
All Sectors but Banking Close Lower
Performance across sectors mirrored that of the benchmark index as all sector indices recorded declines except for the Banking index which was up 1.8% following gains in GUARANTY (+4.3%), ZENITHBANK (+2.7%) and UBA (+2.5%). The Industrial Goods index dipped the most, down 2.1% on account of losses in WAPCO (-5.0%) and DANGCEM (-0.2%). The Insurance and Oil & Gas indices followed, down 1.2% apiece as OANDO (-7.5%) and MANSARD (-4.8%) closed lower. The Consumer Goods index trailed with a 7bps decline.
Market Breadth Favours Decliners
Sentiment stayed soft as market breadth closed at 0.5x (slightly higher than 0.3x on Friday). A total 16 stocks gained while 30 declined. GUARANTY (+4.3%), NEM (+4.0%), CUTIX (+3.0%) and ZENITHBANK (+2.7%) led the advancers whilst TRANSCORP (-9.4%), SKYEBANK (-9.2%), DIAMONDBNK (-8.0%) and OANDO (-7.5%) led the decliners. We are of the view that today’s downtrend was majorly driven by sell offs in WAPCO (-5.0%) following the profit warning issued by the cement maker last Friday with a ripple effect on DANCEM (-0.2%) which has rallied significantly in recent times despite increased buying interest in Banking stocks. We expect the market to close sideways tomorrow in the absence of a major trigger.