Consumer Goods' Sell-off Dampen Market Sentiments

Photo L-R: Balla Swamy, Managing Director, Prestige Assurance Plc; Haruna Jalo-Waziri, Executive Director, Business Development, The Nigerian Stock Exchange; H.T. M Usman, Chairman Prestige Assurance Plc; G. Raghu, Director, Prestige Assurance Plc; and M.O Oyegunle, Director, Prestige Assurance Plc at the Closing Gong Ceremony at The Exchange today.

The Nigerian equities market sustained a second day in the red as profit taking activities persisted across counters. Consequently, the All Share Index further slid 0.6% to berth at 30, 025.62points at the close of trade.

The major losers that dragged the market southwards today were ETI (-3.7%), DANGCEM (-1.6%) and NIGERIAN BREWERIES (-0.7) and this led to a N59.6bn loss in market capitalization which settled at N10.3tn. Activity level in the market was mixed today as volume traded appreciated 36.9% to 284.1m units while value traded fell 18.1% to N2.8bn.

Oil & Gas Index Lone Gainer
The Oil & Gas sector index was the lone gainer today with a 0.8% appreciation consequent on gains in OANDO (+5.4%).

On the flipside, following the unimpressive performance seen in two of the biggest Consumer Goods earnings releases –NIGERIAN BREWERIES 9M:2015 (Topline grew 10.4% Y-o-Y to N214.9bn, whilst PAT fell 12.2% Y-o-Y to N26.2bn) and GUINNESS Q1:2015 (Topline rose 3.3% Y-o-Y to N21.7bn, while PAT declined 75.6% Y-o-Y to N0.4bn), –the Consumer Goods index lost 1.0%.

In the same vein, the Industrial Goods and the Banking indices depreciated 0.5% and 0.3% respectively against the backdrop of sell offs in DANGCEM (-1.6%) and ETI (-3.7%) while the Insurance index was marginally down 3bps.

Negative Sentiments Persist
Negative sentiments towards the Nigerian bourse were unchanged today as seen from the market breadth (advancers/ decliners' ratio) which stood at 0.7x from 17 advancers and 26 decliners.

OANDO (+5.4%), BETAGLAS (+5.0%) and CUTIX (+5.0%) appreciated the most at the close of trade while the biggest decliners were OKOMUOIL (-9.7%), GUINNESS (-5.7%) and CADBURY (-5.0%).

Given the weak investor sentiment in the market arising from the macroeconomic challenges, the expectedly mixed earnings  result of quoted companies have so far failed to buoy market sentiment. We expect investors to approach the earnings season with more caution with financial results of Consumer and Industrial Goods counters expected to be filed in the trading sessions ahead.