Rout on Equities Market Softens

The massive sell offs on counters in the equities market softened today as the benchmark index lost 0.4% (vs 4.1% yesterday) to settle at 22,456.32points. The negative performance today was on account of price depreciations in GUINNESS (-9.6%), ETI (-5.0%) and NESTLE (-4.0%). Similarly, N32.5bn was lost by investors today as market capitalization settled at N7.7tn. However, activity level in the market strengthened as both volume and value traded grew 30.7% and 17.9% to 256.4m units and N2.0bn respectively.

Mixed Performance across Sectors
There was noticeable improvement across sectors today as 3 sectors closed in the green while 2 closed in the red. The Industrial Goods index improved 0.8% consequent on gains in WAPCO (+2.2%). Likewise, the Banking sector index was buoyed by bargain hunting of top counters in that space -- ZENITH (+6.1%) and GUARANTY (+1.6%). The Insurance index also appreciated 0.3%. On the flipside, the Consumer Goods and Oil & Gas sector indices lost 2.3% and 1.7% respectively on account of sell offs in NESTLE (-4.0%) and SEPLAT (-5.0%)

Sentiments Improve
Investor sentiments strengthened today, though still negative, market breadth improved to 0.8x (vs 0.1x yesterday) as 22 stocks advanced, while 27 stocks declined. Top on the gainers list were INTBREW (+9.4%), NEM (+8.6%) and UNITY BANK (+8.5%) while the losers chart was led by OKOMUOIL (-9.7%), GUINNESS (-9.6%) and CHAMPION (-8.6%). The improvement in market performance indicates that investors have started taking bargain hunting positions and the market might be close to the expected bottom. Nevertheless, we may still be far off from a significant rebound as sentiment still remains negative and macroeconomic risks continue to clog the horizon. Whilst we consider the current prices attractive, we continue to advise clients with a short investment horizon to stay cautious.