Stocks Tumble on Panic Selling

The Bullish trend in the Nigerian equities market was reversed as the All Share Index plunged 4.3% amid profit taking and FX uncertainty following the Democracy Day Speech. After touching a year high of 28,902.25 point on Friday, the benchmark index tumbled to 27,671.08 points today, sending YTD return (-3.4%) back to the negative region. Market capitalization also shrank N425.6bn settling at N9.5tn. Today’s sharp decline was broadly driven by huge losses across board including market bellwethers such as ZENITH (-9.7%), NIGERIAN BREWERIES (-4.9%) and DANGCEM (-4.6%). Market activity level was mixed as volume traded fell 46.1% to 334.9m units while value traded rose 11.8% to N3.1bn

All Sector Indices Close Lower
In line with the above, all sector indicators trended southwards with the Banking sector index leading the pack, down 6.6% on the back of losses in ZENITH (-9.7%) and GUARANTY (-5.2%). In the same vein, the Industrial goods index fell 5.5%, as investors sold down on WAPCO (-7.8%) and DANGCEM (-4.6 %). The Consumer goods and Oil & Gas indices also followed suit, declining 2.8% and 2.3% respectively, as NIGERIAN BREWERIES (-4.9%) and FORTE (-5.0%) closed lower. The Insurance index also lost, 1.1% to close out the poor performance.

Sentiments further wane
Market breadth (advancers/decliners ratio) weakened, dropping to 0.2x from 0.9x in the previous session as 9 stocks advanced in contrast to 39 decliners. The top gaining stocks were TRANSEXPRESS (+9.2%), ETRANZACT (+9.0%) and UPL (+5.0%) while ZENITH (-9.7%), ETI (-9.6%) and FBNH (-9.4%) depreciated the most. We attribute today’s sharp decline to panic selling following unclear statement regarding the direction of the Naira after the Democracy Day Speech. We expect bearish sentiments to continue tomorrow.