Equities Market Retreat as MPC Maintains Status Quo

Photo R-L: Aigboje Aig-Imoukhuede, President, The Nigerian Stock Exchange (NSE); Isaac Adewole, Minister of Health; Muhammadu Buhari, President of The Federal Republic of Nigeria, being instituted as the Grand Patron of Committee Empowering Corporate Philanthropy in Nigeria by former Nigerian High Commissioner to The United Kingdom, Christopher Kolade, supported by Muhammad Abubakar.

The Nigerian equities market closed negative today as the All Share Index (ASI) fell 0.5% to settle at 23,832.03pts. This marked a halt in the 4-day gaining streak noticed on the bourse. The negative close today was on the back of further profit-taking in NESTLE (-2.2%), NIGERIAN BREWERIES (-1.1%) and GUARANTY (-1.8%). Equally, market capitalization declined N45.2bn to N8.2tn. Activity level also softened today as volume and value traded dipped 33.6% and 21.9% to 142.9m units and N1.6bn respectively.

Oil & Gas Sector Emerges Lone Gainer
As SEPLAT (+3.9%) and OANDO (+3.4%) closed among top gainers, the Oil & Gas index appreciated 0.8% to end the day as the lone gainer while other sector indices closed in red. Consequent on losses in NESTLE (-2.2%) and GUARANTY (-1.8%), the Consumer Goods and Banking indices shed 1.0% a piece. Similarly, the Insurance index ended the day in the red with 0.9% as MANSARD and AIICO depreciated -3.4% and -1.2% respectively. With a marginal 8bps drop, the Industrial Goods index declined the least.

Market Sentiments Return Negative
Investor sentiments waned today as market breadth - measured by advancers/decliners ratio - closed at 0.4x as 29 stocks gained while 14 declined. Top gainers were CADBURY (+9.2%), AGLEVENT (+5.0%) and SEPLAT (+3.9%) while the highest losers were CAVERTON (-8.5%), GLAXOSMITH (-5.0%) and UNILEVER (-5.0%). Given that gains on the bourse have been majorly on bargain hunting, the loss recorded today as well as the weak sentiments indicate profit-taking activities. The decision of the MPC to leave all rates unchanged and not make a call on the Naira could further dampen investors' appetite in the equity market and spur selloffs in the trading session ahead. We advice short-term investors to thread with caution while longer term investors can look beyond the near term risk to take advantage of the cheap market valuations.