Profit Taking Drags Market Performance Down

Sustained profit taking in yesterday's session dragged market performance for the fourth consecutive trading session as the All Share Index (ASI) slid 40bps to settle at 40,914.94 points while YTD return further weakened to 7.0%. Similarly, investors lost N59.8bn as market capitalisation stood at N14.8tn. The bearish performance was triggered by profit taking in bellwethers - DANGCEM (-1.2%), SEPLAT (-3.3%) and GUARANTY (-1.1%). However, activity level weakened as volume and value traded fell 28.2% and 56.1% to 244.9m units and N4.1bn respectively. The top traded stocks by volume were ZENITH (79.3bn), ACCESS (19.9m) and UBA (19.0m) while ZENITH (N2.2bn), CAP (N356.4m) and ACCESS (N225.0m) were the top traded stocks by value.

Mixed Sector Performance 
Sector performance was largely bearish as 3 of 5 indices under our watch trended southwards. The Oil & Gas index led laggards, down 1.8% on the back of losses in SEPLAT (-3.3%) and FORTE (-2.1%). In the same vein, the Consumer Goods and Banking indices shed 0.1% and 2bps respectively due to profit taking in DANGSUGAR (-1.1%), NASCON (-2.9%), DANGFLOUR (-0.9%), GUARANTY (-1.1%) and WEMA (-4.6%). On the flipside, the Industrial Goods index trended northwards, inching 0.1% higher due to gains in CCNN (+10.0%) and CAP (+4.9%) offsetting profit taking in DANGCEM (-1.2%) while the Insurance index rose 2bps, as a result of gains in LINKASSURE (+4.6%), LASACO (+5.1%) and EQUTYASU (+3.6%).

Investor Sentiment Flat
Investor sentiment measured by market breadth (advance/decline ratio) strengthened, albeit still soft, to 0.9x from 0.8x recorded in the preceding trading session as 22 stocks closed in the green as against 26 stocks that declined. The top gainers were CCNN (+10.0%), VERITASKAP (+5.4%) and LASACO (+5.1%) while NIGERINS (-7.4%), FIDSON (-5.0%) and MAYBAKER (-4.9%) declined the most. Despite the negative market performance, we anticipate a rebound in the market in the last trading session of the week due to bargain hunting opportunities in large cap stocks.