Negative Sentiments Persist amidst IMF Visit

Investor sentiments on the Nigerian bourse remain weak as market performance stayed negative during trade today irrespective of Christine Lagarde's  --IMF MD--  visit; the NSE ASI shed 1.0% to 28,102.14pts. The drag on the bourse today was consequent on the sustained sell pressure in NIGERIAN BREWERIES (-5.0%) and depreciations in major banking counters -- STANBIC (-9.3%), FBNH (-4.7%) and ZENITH (-2.8%). On the other hand, market activities closed higher as volume traded jumped 98.0% to 195.9m units and value surged 170.1% to N1.9bn. We however note that increased level of activities was due to the low base effect from very low volume and value of transactions recorded yesterday.

Sector Indices Broadly Red
Sector indices were broadly negative as all sectors save for the Banking basket shed points. Despite losses in FBNH (-4.7%) and ZENITH (-2.8%), the Banking index improved 0.3% due to overpowering appreciations recorded in ETI (+5.0%) and ACCESS (+2.1%). On the other hand, the Consumer Goods basket emerged the highest sector loser with 2.6% decline on account of further losses in NIGERIAN BREWERIES (-5.0%) and NESTLE (-1.2%). Following the 5.0% drop in MOBIL, the Oil & Gas index trailed with 0.4%. The Industrial Goods sector equally declined 0.3% on the back of 0.8% decline in WAPCO while the Insurance basket shed 6bps.

Less Impressive Market Breadth
Market breadth stayed negative at 0.5x after 14 stocks headed by ETI (+5.0%), FIDELITY (+4.8%) and LIVESTOCK (+4.5%) topped the gainers chart while 28 stocks led by STANBIC (-9.3%), UNITY (-8.9%) and MOBIL (-5.0%) led losers. Given the current poor sentiments equities, we do not expect to see any significant upside in performance in the near term as a mere visit by the IMF Boss may not trigger positive sentiments. However, policy pronouncements from policy makers that can trigger spending and impact on corporate earnings may be instrumental in pushing positive market performance in the medium term.