Nigerian Bourse Opens Week Bearish

The Nigerian equities market ended the first trading session of the week in the red as the All Share Index dipped 1.1% to close at 25,218.12 points, whilst YTD loss worsened to 6.2%. As a result, market capitalization shed N104.8bn to close at N8.7tn. The drag in market performance was largely as a result of decline in DANGCEM (-2.4%), NESTLE (-2.9%), ETI (-5.0%), GUARANTY (-0.8%) and UBA (-2.8%). Market activity was however mixed as volume traded fell 29.5% while value traded rose 6.9% to 246.1m units and N2.4bn respectively in 2,854 deals.

Oil & Gas Index Circumvents Sectors Downtrend
Performance across sectors largely trended in the same direction as the Benchmark index as all indices closed lower save for the Oil & Gas index which rose 0.5% on the back of gains in SEPLAT (+2.6%) and FORTE (+1.1%). FORTE recently released its Q1:2017 result which showed that revenue declined 7.3% Y-o-Y to N33.0bn while PAT surged 97.5% Y-o-Y to N1.9bn due to improved cost management. The Banking index (-1.4%) led losses today against the backdrop of bearish sentiment toward ETI (-5.0%), GUARANTY (-0.8%), UBA (-2.8%), UNION (-5.0%) and FIDELITY (-9.1%). The selloff in ETI followed weaker than expected FY:2016 result filed earlier today, with the Bank declaring an after-tax loss of N51.9bn while Gross earnings rose 22.5% Y-o-Y to N665.0bn.

Similarly, the Industrial Goods index fell 1.1% consequent on selloffs in DANGCEM (-2.4%) while the Consumer Goods index dipped 0.7% as NESTLE (-2.9%) and UNILEVER (-0.3%) closed lower. UNILEVER also released its Q1:2017 result today with revenue and after-tax profit improving 32.1% and 53.9% Y-o-Y to N22.2bn and N1.6bn respectively. The Insurance index (-0.4%) closed out the negative performance, pressured by losses in CUSTODIAN (-5.6%) and NEM (-3.6%).

Investor Sentiment Weakens
The weak level of sentiment on the Bourse was reflected in the market breadth which fell from 1.6x last Thursday to 0.8x - 14 stocks advanced against 18 which decliners. FBNH (+5.0%), CILEASING (+4.7%) and DANGFLOUR (+4.3%) led the gainers while FIDELITY (-9.1%), ETI and ETERNA (-5.0% apiece) led laggards. Barring any negative earnings surprises, we expect bargain hunting to lift market performance in tomorrow’s trading session.

NASD OTC Exchange Market Activities
In the NASD OTC exchange, only AFRILAND, CSCS and WAMCO traded, with total volume and value closing at 520,861 units and N13.1m respectively.