Sustained Sell-offs in Blue Chip Stocks Drag Equities Market

The local Bourse extended losses to the fourth consecutive trading session as the All Share Index shed 1.1% on Wednesday to close at 40,802.08 points while YTD return further declined to 6.7%. This bearish performance was mostly due to sell offs in DANGCEM (-0.8%), GUARANTY (-2.0%) and NIGERIAN BREWERIES (-0.1%). Hence, investors lost N159.4bn in value as market capitalisation fell to N14.7tn.  Activity level was mixed as volume traded rose 51.6% to 535.0m units while value traded dropped 11.7% to N3.7bn. The top traded stocks by volume were CHAMPION (153.9m), SKYEBANK (104.7m) and STERLING (41.2m) while GUARANTY (N531.3m), CHAMPION (N397.1m) and ZENITH (N396.2m) were the top traded stocks by value.

Banking Index Leads Bearish Sector Performance
Sector performance was largely bearish as 4 of 5 indices under our coverage closed in the red while one index closed in the green.  The Banking index lost the most, down by 3.4% due to sell offs in GUARANTY (-2.0%), ETI (-4.4%) and UBA (-2.5%) followed by the Industrial Goods index which shed 2.6% on the back of price depreciation in DANGCEM (-0.8%) and WAPCO (-4.7%). Similarly, the Insurance index declined 0.3%, dragged by losses in WAPIC (-3.4%) and MBENEFIT (-5.4%) while the Oil & Gas index slid 3bps following losses in TOTAL (-0.7%). On the flipside, the Consumer Goods index was the lone gainer, inching 0.3% higher due to buy interest in UNILEVER (+4.9%) and PZ (+4.6%).

Investor Sentiment Softens
Investor sentiment measured by market breadth (advance/decline ratio) waned to 0.6x from 0.7x recorded in the previous session as 18 stocks advanced relative to 29 stocks that declined. GLAXOSMITH (+10.0%), WEMABANK (+9.4%) and ETERNA (+5.6%) were the best performing stocks while JAPAULOIL (-8.5%), MBENEFIT (-5.4%) and FIDSON (-5.0%) depreciated the most.  Whilst bearish sentiment in the market persists, we remain optimistic of a rebound in the near term. Hence we do not rule out the possibility of increased bargain hunting in the final trading day of the week prior to the Easter Holiday.