Profit Taking Persists at Stock Exchange

The Nigerian Bourse dipped further South today on the back of profit taking across bellwethers in the Consumer and Industrial Goods space. The All Share Index (ASI) eased 0.1% to close at 23,517.19 points. The bearish performance was broadly driven by huge declines in NESTLE (-5.0%), 7UP (-5.0%) and DANGCEM (-2.1%). Consequently, investors lost N30.5bn as market capitalization fell to N8.1tn. Market activity strengthened as volume and value traded grew100.8% and 28.5% to 2.6bn units and N3.7bn respectively.

Mixed Performance across All Sectors
The Oil & Gas index appreciated the most as gains in FORTE (+9.4%) drove the index 4.5% northwards. Similarly, the Banking index rose 1.1% on account of price appreciation in GUARANTY (+2.3%) and ETI (+3.3%). The Insurance index improved 0.2% on buy sentiments in CONTINSURE (+4.3%). On the flipside, the Consumer Goods Index dipped the most, down 1.5% on the back of sell pressures in NESTLE (-5.0%) and 7UP (-5.0%). In the same vein, the Industrial Goods index shed 1.1% due to a 2.1% decline in DANGCEM

Market Sentiments Remain Negative
Market sentiments improved today, albeit negative, as market breadth – advancers’/decliners’ ratio – settled at 0.7x (from 0.4x the previous trading session) as 17 stocks advanced while 26 declined. The gainers’ chart was topped by INTERNATIONAL BREWERIES (+9.7%), FORTE (+9.3%) and GUINNESS (+4.8%) while NESTLE (-5.0%), 7UP (-5.0%) and DANGSUGAR (-5.0%) were the worst performing stocks. On the back of current macroeconomic headwinds (dwindling oil prices and FX concerns) our short term outlook remains bearish. We maintain our long term investment recommendation for equities. Nevertheless, speculative opportunities would remain available for active investors who could take advantage of current oscillatory price movement.