Equities Extend Losing Streak to 8th Session

The equities market continues to post losses as the All Share Index (ASI) closed lower for the 8th consecutive session on Tuesday. The ASI declined 17bps today to close at a 7-month low of 25,462.28 points, bringing YTD loss of the index to 11.1%. Market capitalization also dipped N12.9bn to settle at N8.8tn as overall performance was weighted down by sell pressure in FORTE (-9.7%), TOTAL (-5.0%) and PZ (-3.3%). However, market activity improved as volume and value traded rose 7.6% and 38.2% to settle at 120.9m units and N1.2bn respectively.

Banking Index Sole Gainer
Contrary to the bearish performance of sector indices yesterday, today’s performance was broadly mixed. The Oil & Gas index (-2.5%) however maintained its losing streak as sustained decline in FORTE (-9.7%) and TOTAL (-5.0%) dragged the index lower. Also, the Consumer Goods index marginally lost 2bps on account of weak appetite in PZ (-3.3%) and DANGSUGAR (-1.6%). On the flipside, the Banking index rebounded 5bps on the back of bargain hunting in ACCESS (+0.5%), ZENITH (+0.4%) and GUARANTY (+0.3%). The Industrial Goods and Insurance indices closed flat.

Negative Sentiment Persists as MPC Maintains Status Quo on Policy Rates
Investor sentiment waned today as market breadth retreated to 0.6x (from 0.8x yesterday) after 11 stocks advanced against 17 declining stocks. The best performing stocks today were CHAMPION (+8.4%), FLOURMILL (+5.0%) and AFRIPRUD (+4.9%) while FORTE (-9.7%), LIVESTOCK (-5.0%) and TOTAL (-5.0%) declined the most. The Monetary Policy Committee (MPC) of the CBN concluded its last meeting for the year today and held all policy rates constant in line with consensus forecast. However, committee members failed to give any guidance nor market-friendly opinion on the current administrative structure of the FX market. Thus, with no end yet in sight to the pegged exchange rate regime, we believe sentiment for equities would remain weak in the short to medium term. Nonetheless, we do not rule out possibility of the market closing in the green in sessions ahead given the bargain hunting opportunities in bellwether Industrial Goods and Banking equities.