Nigerian Bourse Extends Losses

The Nigerian equities market extended losses today as the benchmark index slid 0.7% to close at 35,397.52 points, further trimming YTD gain to 31.7%. Today’s performance was dragged by declines in large cap stocks such as NESTLE (-4.9%), NIGERIAN BREWERIES (-2.4%), DANGCEM (-0.5%) and WAPCO (-3.8%). Consequently, investors lost N92.2bn as market capitalization fell to N12.2tn. However, activity level surged as volume and value traded rose 225.4% and 165.4% to 373.5m units and N5.8bn respectively.

Indices Close in the Red
Performance across sectors was broadly bearish as all indices declined save for the Oil & Gas index which added 2.1% owing to bargain hunting in SEPLAT (+5.0%). On the other hand, losses in NESTLE (-4.9%) and NIGERIAN BREWERIES (-2.4%) dragged the Consumer Goods index 2.2% lower while the Industrial Goods index dipped 1.9% on account of declines in DANGCEM (-0.5%) and WAPCO (-3.8%). Likewise, the Insurance and Banking indices slipped 1.5% and 0.6% due to negative sentiment towards CONTINSURE (-4.8%) and GUARANTY (-0.7%).

Market Breadth Weakens
Investor sentiment as measured by the market breadth (advancers/decliners’ ratio) weakened to 0.6x (from 0.9x yesterday) as 17 stocks advanced against 28 which declined. At the summit of the gainers’ chart were INTBREW (+6.8%), UNILEVER (+5.0%) and NEM (+5.0%) while AIICO (-6.8%), FLOURMILL (-5.0%) and NESTLE (-4.9%) topped the losers’ chart. We maintain our view that the current downtrend in the market would not persist beyond the short term as we expect investor sentiment to remain largely driven by improvements in macroeconomic fundamentals in addition to expectations of positive Q3:2017 corporate earnings reports.