Bearish Sentiment Drags Market Performance

Bearish sentiment in bellwethers dragged market performance on the Nigerian Stock Exchange today as the All Share Index (ASI) shed 17bps to close at 25,288.11 points while market capitalization also declined N17.0bn to close at N8.7tn. Today’s negative performance was largely as a result of the decline in DANGCEM (-0.6%) and ETI (-4.9%) which offset gains in NB (+0.8%), STANBIC (+2.6%) and SEPLAT (+1.3%). Similarly, activity level weakened as volume and value traded fell 36.3% and 41.3% to 147.9m units and N836.8m respectively in 2,578 deals (from 2,907 yesterday).

Industrial Goods Index Leads Losses
Similar to yesterday’s session, performance across sectors was mixed today as 2 out of 5 sector indices closed in the green. The Oil & Gas index (+0.5%) led sector gainers as a result of appreciation in SEPLAT (+1.3%) whilst the Consumer Goods (+0.1%) trailed on the back of gains in NB (+0.8%), HONYFLOUR (+4.1%) and NESTLE (+4bps). On the flip side, the Industrial Goods index dipped 0.3% as DANGCEM (-0.6%) declined. Despite gains in GUARANTY (+0.3%), DIAMOND (+4.7%) and ACCESS (+0.3%), the Banking index weakened 0.3% as a result of price depreciation in ZENITH (-0.6%) and further sell pressure on ETI (-4.9%) following its disappointing FY:2016 earnings scorecard released earlier in the week. The Insurance index (-0.1%) also trended southwards, dragged by NEM (-2.4%).

Market Breadth Weakens
Investor sentiment weakened today as highlighted in the lower market breadth (advancers/decliners ratio) which fell from 1.6x yesterday to 1.1x - 16 advancers against 15 decliners. Today’s best performing stocks were AFRIPRUD (+5.0%), VITAFOAM (+4.7%) and DIAMOND (+4.7%) while the worst performers were 7UP (-5.0%), OKOMUOIL (-5.0%) and UNITY (-4.9%). As investors await Q1:2017 earnings results from industry bellwethers to shape expectation for the earnings season, we expect the market to continue to trade sideways.

NASD OTC Exchange Market Activities
In the NASD OTC exchange, total volume and value of trades closed at 550,425 units and N18.7m respectively. ACORN, IGI and PARTNERSHIP closed flat while WAMCO and CSCS appreciated 6.9% and 1.5%. On the other hand, AFRILAND declined 10.0%.

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