In line with expectation, the equities market opened the week negative as the All Share Index fell 88bps to 38,913.99 points while YTD return retreated to 44.8%. Consequently, investors lost N119.6bn in value as market capitalization settled at N13.6tn. Market performance today can be primarily attributed to profit taking in bellwether Industrial Goods and Banking stocks - DANGCEM (-1.7%), ZENITH (-3.3%) and UBA (-5.0%). In the same vein, activity level declined as average volume and value fell 33.9% and 4.0% to 350.6m units and N4.9bn respectively.
Banking Index Leads Laggards
Similar to the broader index, sector performance was largely underwhelming as 3 of 5 indices closed southwards. The Banking index led laggards, down 2.0% on the back of losses in ZENITH (-3.3%), UBA (- 5.0%) and GUARANTY (-0.8%). The Industrial Goods Index trailed, depreciating 1.4%, primarily on the back of profit taking in DANGCEM (-1.7%) and WAPCO (-1.2%). Similarly, selling pressures on NEM (-3.9%) and LINKASSURE (-4.4%) dragged the Insurance index 1.1% lower. On the flip side, the Oil & Gas and Consumer Goods indices gained 1.1% and 0.7% respectively as MOBIL (+9.5%), TOTAL (+0.9%), NESTLE (+3.5%) and FLOURMILL (+6.4%) enjoyed buy interest.
Investor Sentiment Weakens
Investor sentiment as measured by market breadth (advance/decline ratio) weakened to 0.5x relative to 1.5x recorded the previous Friday as 13 stocks advanced against 28 stocks that declined. Top performing stocks were MOBIL (+9.5%), NASCON (+5.0) and NEIMETH (+4.3%) while UBA (-5.0%), LEARNAFRCA (-5.0%) and CILEASING (-4.9%) were the worst performers. In line with our expectation, market performance was negative as investors booked profit in large-cap stocks which rallied the previous week. Nonetheless, we maintain a positive outlook in the near term as fund managers return to strategic weightings during year-end rebalancing cycle.